Episode 66. I’m marrying him in 1 month—but our finances are terrifying me

Transcript

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Beth: [00:00:03] I’ve worked really hard to try to keep up, but still I’m really afraid that it still won’t be good enough. I’m worried that John would come to resent me someday. I feel bad when John has to pay for stuff because I can’t. I didn’t want to be a burden.

Ramit Sethi: [00:00:30] Is this tough to talk about?

Beth: [00:00:33] Yeah, avoidance is a huge tactic for me and has been a previous financial tactic for me for a while. John did try. We would talk about finances. I just didn’t have the ability to comprehend. A lot of times it also felt really overwhelming to be coming from a place of former scarcity to now feeling like I have to learn a bunch of new rules.

Ramit Sethi: [00:01:02] You do. 

[Narration]

Beth does have to learn new rules. She’s been in scarcity mode for years, and she and John came to me one month before their wedding day because they are not on the same page with their finances. They’re worth almost $800,000 combined. And Beth is struggling to adapt to this new reality. They’re stuck on their wedding budget. They’re stuck on getting a prenup, and they’re stuck on whether or not Beth should leave her toxic job. But as we discuss, these issues go much deeper. I’m Ramit Sethi, and this is I Will Teach You to Be Rich. 

[Interview]

Beth, can you think of a time in the last month where the two of you were not on the same financial page?

Beth: [00:01:50] Yeah, in the last 30 days, we probably had some disconnect about wedding spending.

Ramit Sethi: [00:01:56] How do you decide how much you’re going to spend on your wedding?

Beth: [00:02:00] That depends on who you ask.

Ramit Sethi: [00:02:02] Let’s start with you.

Beth: [00:02:04] I feel $20,000 is a reasonable amount to spend on the kind of wedding we’re expecting to have.

Ramit Sethi: [00:02:11] And where did you come up with that number?

Beth: [00:02:13] I looked at national averages for where we live.

Ramit Sethi: [00:02:16] Mh-hmm. Did you make a spreadsheet of this or what?

Beth: [00:02:20] No, I don’t make the spreadsheets in our household.

Ramit Sethi: [00:02:25] Oh, who does?

Beth: [00:02:26] John is our spreadsheet maker.

Ramit Sethi: [00:02:28] Okay. Interesting. And so when you looked at the average prices, just out of curiosity, do you make the average income in your area?

Beth: [00:02:39] Yes, I’d probably make a little bit above average, but I am not a big breadwinner. I don’t make a ton of money.

Ramit Sethi: [00:02:46] And what about John?

Beth: [00:02:48] John makes more than me. I think John makes more than average for our area.

Ramit Sethi: [00:02:55] Okay. Who’s paying for the wedding?

Beth: [00:02:58] It’s a combination of us, and then my parents donated. They offered to give us money, which was really surprising because they offered us a very generous amount to put towards the wedding.

Ramit Sethi: [00:03:07] How much?

Beth: [00:03:08] $20,000.

Ramit Sethi: [00:03:10] Oh, really?

Beth: [00:03:11] Yeah, they said we could have that money and we could do whatever we wanted with it.

[Narration]

Ramit Sethi: [00:03:16] Observation number one, Beth comes into this call stressed out about how they will pay for their wedding, which she’s budgeted at $20,000. That is a seemingly random number that we’re going to get to in just a second even though her parents gifted her that same amount to use on the wedding.

This is a perfect example of how your feelings about money are highly uncorrelated to the amount of money you’ve got in the bank. She budgeted $20,000. She got $20,000, but she still feels stressed out. 

[Interview]

So, John, when you started thinking about the wedding and the numbers behind it, what was your approach?

John: [00:03:57] I deferred to Beth to set the budget.

Ramit Sethi: [00:04:00] Wait a minute. You deferred the budget to her. She came back and told you $20,000, and then what happened? You said okay?

Beth: [00:04:08] Yeah. Yeah, we did have a conversation about that.

Ramit Sethi: [00:04:12] How’d that conversation go?

Beth: [00:04:14] He said, if you have a magic number, like if 37 was the magic number, I’d feel comfortable spending. I don’t know where did you come up with that number?

John: [00:04:25] I just pick numbers out of the air.

Ramit Sethi: [00:04:29] Is that a recurring theme, John?

John: [00:04:32] Somewhat. She was still pretty hesitant to go above that just because she’s stressed about the budget and I really had this $20k number in my head and that’s what we should stay under.

Beth: [00:04:50] I only make 50k. It was very much like, 20,000 is a lot, but 30, oh, my God. Now we’re talking over half of my yearly income for a one-day party.

Ramit Sethi: [00:05:05] Beth, I’m trying to understand if the 20k is actually based in any numbers or any reason, or is it just that you feel you should spend a maximum of 20k?

Beth: [00:05:18] I guess it’s really based on– it’s not like, oh, this must be it. It’s more of a feeling like we’re over the 20k mark. I guess for me it was such an escalation. It was like $20,000. And then it was like, okay, now it’s 30, where I guess I’m not looking back and being, oh yeah, we did sit down and look at how quickly expenses are adding up. And that’s when John was, “Okay, the magic number is 37. Let’s make it 37.” And I was like, “That’s so much money.” We can’t do that.” where we can. It’s not like we don’t have the money.

Ramit Sethi: [00:05:53] What is the amount that the wedding is currently budgeted at? A lot of quiet on this call. All of a sudden it got very quiet in here.

Beth: [00:06:05] We don’t know.

Ramit Sethi: [00:06:06] Whoa. You just said, “All right, it’s not 20. It’s not 37.” The hell with it. Whatever it ends up being, that’s what it’s going to be. Wow. A lot of nods around the room.

Beth: [00:06:17] Yeah.

Ramit Sethi: [00:06:17] What? How did that happen, Beth?

Beth: [00:06:21] I just didn’t have the bandwidth to worry about it anymore.

Ramit Sethi: [00:06:25] Does it feel better or worse?

Beth: [00:06:27] It feels better. I’m nervous about after and looking back, but I got to the point where people were asking, “How’s wedding planning going?” And I’m like, “This is the worst thing I’ve ever done.”

Ramit Sethi: [00:06:43] [Narration]

This is not a healthy relationship with money. First, they picked an arbitrary number for the wedding and they felt stressed. Then, even though they were gifted $20,000, they still felt guilty about money. And finally, when the stress got too much, they stopped paying attention to how much their wedding cost altogether. They actually have no idea how much they’re spending, and they feel good about ignoring it. 

This is a big red flag. A wedding is just the first of hundreds of large financial decisions you’ll make in your lifetime. Ignoring it sets a dangerous precedent for how they’ll handle future financial decisions together.

[Interview]

Beth: [00:07:26] It’s been really stressful.

Ramit Sethi: [00:07:29] Why?

Beth: [00:07:30] I was so unhappy that it was just like, I’m not enjoying this time. So by just accepting that we’re going to be okay, we’ve got the money. Well, I think we’ve got the money to do it and it’s either try to enjoy this time while I have it or be miserable and reflect back on this not being the joyous time it should be.

Ramit Sethi: [00:07:55] John, how do you feel about this wedding process in terms of finances?

John: [00:08:01] I wish the beginning was a little more easier, especially because Beth had a lot of stress and it’s me trying to pull her along into my mindset of, hey, we’re going to need these things. We need a venue. We need a caterer. We need a deejay. And as long as we don’t go too crazy over the top, it doesn’t really matter what the actual spend is. We’ve got the money. Let’s just spend it and not worry about it anymore.

Ramit Sethi: [00:08:40] I don’t think you get that to you spending more can reduce stress. But to Beth, having an undefined amount of money to spend is actually what causes the stress. To Beth, just having this 20k alone is a lot of money, as she put it. And then to be even contemplating going over, that is the bad zone for her. And so when you say, “Oh, well, we could spend more and it won’t make you stressed,” you don’t realize that spending $20,001 is actually stressful to her. 

And then in the end, both of you are going, “Ah, I don’t even want to pay attention to this. Let’s just finish this wedding and we’ll deal with this other stuff later.” When is the wedding?

John: [00:09:32] October 15th.

Ramit Sethi: [00:09:35] Less than a month away. 

Beth: [00:09:36] Oh, yeah.

John: [00:09:36] Yeah, we’re 30 days out.

Ramit Sethi: [00:09:38] [Narration]

I remember getting engaged to my wife, and I asked a lot of my married friends for advice. And some of the comments came back and there was the eye roll and going, “Oh, boy, it’s going to be a year. Oh, boy, you’re in for it.” And then I remember one of my friends said, “This is going to be the best year of your life. You can choose to have fun or you can choose to roll your eyes.” And they said, “Just choose to have a great time. You get to do this together.” And I loved it. I chose to make it the best year of my life. My wife and I had a blast planning the wedding. Yeah, sure. It was stressful some of the time, but we chose to make it a positive experience. 

The way I hear Beth and John talking is reactive, and it’s a bad precedent. It’s like spilling a bunch of orange juice and letting it sit on the floor overnight. You do it once, you wake up and you go, hey, that wasn’t so bad. Now you have sticky floors for the rest of your life. 

Notice the phrases she uses– nervous, scared, the worst thing she’s ever done. These are not the words of what should be one of the best experiences of their life. We also heard that Beth only thinks they have the money for this, now unbudgeted wedding. But John sounds very confident, even casual about it. Let’s explore that contrast.

[Interview]

Beth: [00:11:07] There was a lot of uncertainty about money, as John was saying at the start of planning. John’s like, “Whoa, I’ve got money.” And I’m like, “I don’t know where it is. I don’t know what it looks like.” I really think that I felt we were average people, so it would make sense to spend the average amount of money.

Ramit Sethi: [00:11:27] Can I ask you a question, Beth? What is your net worth? I mean, the two of you.

Beth: [00:11:32] $800,000. I normally don’t look at a number this big, so I’m double-checking where my decimal points are, honestly.

Ramit Sethi: [00:11:40] You want to look at it? I want you to feel confident about it. It’s your money.

Beth: [00:11:45] Well, it’s our combined net worth, but most of it is John’s. And so it doesn’t feel right to say that it’s my money.

Ramit Sethi: [00:11:59] We don’t have like the– I don’t know what it is in English terms. We don’t have who this is. It’s your, the two of yours together once you’re married. That’s what I’m asking, what is your combined net worth?

Beth: [00:12:17] Yeah, almost $800,000.

Ramit Sethi: [00:12:22] How’s that feel to say out loud?

Beth: [00:12:26] Surreal. Yeah, pretty surreal because that’s not a number I thought I would get to.

Ramit Sethi: [00:12:35] And, Beth, you mentioned that you make 50k. John, what’s your income?

John: [00:12:40] I’m around 80 and that fluctuates. I do have some stocks. That is part of my total compensation.

Ramit Sethi: [00:12:50] Got it. You have a considerable amount of money saved up out of roughly 800k, about 700k of it is yours. Over 700k, is that fair to say?

John: [00:13:01] Yeah.

Ramit Sethi: [00:13:01] You have $800,000 in a net worth. And how old are you both?

John: [00:13:08] Turning 40 in a couple of weeks.

Ramit Sethi: [00:13:11] Mh-hmm. Beth?

Beth: [00:13:12] I am 35.

Ramit Sethi: [00:13:14] Okay. So you’re 35 and 40. You live in the Midwest and you have $800,000 net worth. Does that sound average to you?

Beth: [00:13:24] No, but that net worth is newer to me than it has ever been for John.

Ramit Sethi: [00:13:30] I totally agree. John, you’ve been slowly accumulating this money over a long period of time. You’ve gotten used to it, you’ve lived with it, thought about it, felt it. Okay. Beth, when was the first time you discovered John had over $700,000?

Beth: [00:13:51] Monday.

Ramit Sethi: [00:13:52] Whoa. What do you think he had before?

Beth: [00:13:56] I knew that he had stock. I know that he works for a big tech company. I know that he gets RSUses. I was aware of–

Ramit Sethi: [00:14:11] Did you know the number?

Beth: [00:14:12] No.

Ramit Sethi: [00:14:13] John, man, you’re less than a month away from getting married and your fiance is just now learning you have $700,000 plus in the bank.

John: [00:14:25] I don’t know if that’s 100% accurate. I know that Beth and I have talked a lot about finances, especially when we were combining things. One of the things that I didn’t do well was expressly come to her with exact figures.

Ramit Sethi: [00:14:46] [Narration]

Lots of passive behavior here from John. He gives Beth loose guidelines for the wedding budget, which stresses her out. He doesn’t expressly come to her with exact figures about his net worth, so she only learns he has $700,000 a few days before they’re getting married. The details matter. And they also help us understand why Beth feels in the dark about money. I’m not saying this is John’s fault, but I do want to highlight the dynamics of this relationship.

[Interview]

John: [00:15:18] I told her about the different buckets about where my money was like, I have this much in savings, I’ve got this much in my retirement fund, I’ve got this much in company stock, I’ve got another brokerage account with other index fund investments.

Ramit Sethi: [00:15:39] And, John, how do you think she received that when you told her?

John: [00:15:45] I don’t think that it really connected to her and it’s something that I’ve tried to bring up and clarify for her a couple of times, but because I’m not keeping a very fine eye on it, I’ve got, oh, there’s 50k here and 20k here, and I think there might be $100,000 over here.

Ramit Sethi: [00:16:08] Okay. So listen, first of all, John, I actually empathize with you a lot because I don’t want to keep a fine level of detail eye on my own personal finances either, believe it or not. I like the broad strokes. I have a few key rules that are really important to me, like savings rate, asset allocation, etc. When I met my wife, she was like, “What are you talking about?” Look, we need to know. And I realized she’s right. First of all, it’s good for me. But it’s necessary for us. We need to get a better handle on this. 

You’ve actually done quite well, and at 40, you’ve got over $700,000 with an $80,000 salary. That’s fantastic. But it seems the root of some of these issues is Beth just has no idea about the numbers. And just going and giving her 10,000 different numbers– man, if I made 50k and I had not accumulated this kind of money, it would be very overwhelming to hear someone say 50k here, 100k there. There’s probably $20,000 in the couch. I’d be like, “What are you talking about?” Beth?

Beth: [00:17:19] John did try. Every time we make a trip across state, we would talk about finances when we were both in a position of being in the car and being together. He really did try. I just didn’t have the ability to comprehend. And I guess I could have and probably should have looked into some of the stuff that he was telling me about, but a lot of times it also felt really overwhelming to be coming from a place of former scarcity to now feeling like I have to learn a bunch of new rules.

Ramit Sethi: [00:17:59] You do. 

[Narration]

This is quite revealing. I’m glad Beth is sharing that John has tried to share details of their finances. And she’s reflecting on how she didn’t take responsibility. But she says she has this, quote, “feeling” that she has to learn a bunch of new rules. She does. She’s about to get married and step into a considerably different socioeconomic status. 

That means she’ll have to learn a different language and a different way of thinking. It’s like walking into a fine dining restaurant for the first time. Of course, the waitstaff should answer any questions you have, and ideally, they should make you feel comfortable. But it’s your responsibility to take an active role in the experience.

[Interview]

John: [00:18:44] I think that going into it and looking back on how the wedding planning has gone, I think I let Beth down in that I didn’t keep track of the details or give her enough financial direction or where the, I guess, arbitrary bar should be.

Beth: [00:19:09] That’s a pretty accurate representation of how sometimes we talk about stuff like, well, it doesn’t matter what we spend. And I’ll be like, “Well, it kind of does to me.” I can’t make an informed decision without a person giving me a second side of it. If there’s no negotiation or discussion, it’s really hard to figure out where we’re going to land as a team.

Ramit Sethi: [00:19:38] Let’s say renovating a house. I don’t know anything about it. And if I bring over some general contractor and I go, “All right. How long is it going to take to do the bathroom and the kitchen?” And they go, “Ah, no big deal. We could do a pretty fast.” What does that mean? Is that a year? Is that a day? What are we talking about here? I have no sense of scale. And so I need them to be a little bit clearer with me and to present some trade-offs. 

“Okay, look, if you want the kitchen to look like this, this’ll take a month. If you want to look like that, that’ll take three months. If you want some Italian marble and we get delayed it might take us nine months.” “Oh, now I understand the different options here and now I can choose accordingly.” Beth, how would that have felt to have had that experience during the wedding budgeting?

Beth: [00:20:35] It would have been different because there was a lot of, “Oh, I’m doing this alone.” And John was like, “I trust you.” Well, but do I trust myself?

[Narration]

Ramit Sethi: [00:20:54] Yes. John needs to adjust his strategy for when and how he’s having these conversations. But Beth needs to take responsibility for learning about money. We start to talk about how they plan their wedding, and then I discover another twist. They actually did come up with a very detailed plan for the wedding. They just didn’t follow it.

[Interview]

John: [00:21:16] I think Beth forgot about that scary pink book that she got with the wedding planning manual, with the checklists and everything. One of the first things that we sat down to do was come up with our– it was the wedding thesis or–

Beth: [00:21:36] Wedding mission statement.

Ramit Sethi: [00:21:37] Love it.

John: [00:21:38] The wedding mission statement. Together, I think it went something like we wanted our family and friends to all be there. We wanted it to be a really great time with cocktails, food, and dancing. And it was important to me that it be no stress.

Ramit Sethi: [00:22:03] Okay. Well, first of all, amazing that you two did that exercise. And what a beautiful mission statement. I’m just wondering, after going through that, when you faced the decision, like spending an extra x thousand dollars on glasses, how did that mission statement help you make that decision or did it not?

John: [00:22:25] I think it should have helped us make that decision, but it got lost in the shuffle on all of the other decisions that we were making.

Ramit Sethi: [00:22:35] Guys, you did the hard work. You came up with this beautiful mission statement and then you totally abandon it. If it were me and I had your mission statement, and we had come up with a general budget, Beth said 20k. And how much did these glasses cost?

[Narration]`

Having a few key principles helps you navigate through the thousands of financial decisions you’ll have to make. This is why I created my money rules. You can just Google for Ramit’s money rules to see what mine are. In Beth and John’s case, they actually came up with a great set of values, but when it came down to the actual financial decisions, they abandoned the values and went down into the weeds. 

If you find yourself debating the price of glasses or detergent at Target, it’s helpful to zoom back up to your conscious spending plan and your money rules. Let’s jump into their conscious spending plan. You can download your own copy at iwt.com/episode66. 

[interview]

So you currently have a net worth of $795,000. I’m describing all these terms jointly. Okay. Looks like your gross income it’s about $6,000 for John and roughly $4,000 a month for Beth. A combined gross income of about $10,000 a month, or roughly 120k a year. All that accurate?

John: [00:24:06] Mh-hmm.

Ramit Sethi: [00:24:06] Cool. Your investments, it says 8%. I don’t really believe that. I think you’re both investing a lot more than 8%. You’ve got all these RSUs and stuff like that. Is that correct?

John: [00:24:19] Yeah, I think the investment section of the spending plan, we just took the amount that was coming out of our net pay and that didn’t really factor in what we’re putting in for our 401k or any gross retirement investment.

Ramit Sethi: [00:24:37] How much is going in the ballpark per month? It’s a lot, right?

John: [00:24:43] Yeah. For my retirement, 10% of my gross is going into 401k. I’m also maxing out an HSA and contributing the max to a Roth that comes out of net. 

Ramit Sethi: [00:24:57] So how much total? It’s like many thousands of dollars, right?

John: [00:25:02] Yeah.

Ramit Sethi: [00:25:03] Okay. And what about for you, Beth?

Beth: [00:25:07] $300 a month goes into my Roth. That’s what I’m doing. My work does do 12%.

Ramit Sethi: [00:25:18] 12% what?

Beth: [00:25:18] Of my money a year.

Ramit Sethi: [00:25:24] They match it?

Beth: [00:25:26] No, they just give me 12%.

Ramit Sethi: [00:25:28] They give you 12% in retirement?

Beth: [00:25:32] Yes.

Ramit Sethi: [00:25:32] Okay. Wow. That’s great. So that’s $5,000 plus per year. It’s roughly 400 bucks a month. Okay, so you’re doing 400 a month from that plus 300 of your own.

Beth: [00:25:49] Yes. I guess I didn’t think about the money that comes from work.

Ramit Sethi: [00:25:55] Got to count it. It’s money. Got to count it. You seemed you were a bit sheepish about only doing $300 a month, which I don’t mind, but it’s actually $700 a month. That’s pretty good. What do you think about that?

Beth: [00:26:11] I guess I don’t really think about it because I have not been thinking about the work contribution at all lately because I’m considering not working there anymore. So I really don’t think about it. That’s pretty much where my net worth is, is the money I didn’t think about getting from my 403b for work.

Ramit Sethi: [00:26:35] Beth, can I just say something?

Beth: [00:26:37] Mh-hmm.

Ramit Sethi: [00:26:38] It’s time to think about it. Do you notice any patterns between the wedding planning budget and the way you are treating your retirement right now?

Beth: [00:26:49] Oh yeah. Avoidance is a huge tactic for me and has been a previous financial tactic for me for a while. It’s been only the last four years that I’ve really changed that.

Ramit Sethi: [00:27:04] Who is the one who wanted to be on this podcast?

Beth: [00:27:07] I wanted to be on the podcast.

Ramit Sethi: [00:27:09] Oh, that’s pretty cool. That’s the opposite of avoidance, to come on here and talk about this stuff. How did you get the courage to do that?

Beth: [00:27:17] As we were talking about combining finances, John is the person who recommended that I read your book x number of years ago. It became apparent that there were things that we needed to do to be successful together. So listening to you talk to other couples, it made sense that I should be applying. I’m trying not to be that way anymore.

Ramit Sethi: [00:27:46] In order for us to make sure that you don’t feel that way, we have to build your confidence, your competence, and your communication. So let’s do that. The first thing I want to say from the conference perspective is you’re investing $8,000 a year right now. That is quite good. That’s more than a lot of people making way more money than you are investing. I think that’s impressive. 

So what do I always say on the podcast? Take the win. Take the win. In fact, everybody, a round of applause for Beth. Amazing. Beth, you too. I want to see those hands. I don’t care if it’s a little cheesy and theatrical. I think you’re doing a great job investing right now, and I think you should know that. 

In terms of competence, when you start looking at this stuff, the old Beth was, I don’t look at this stuff. And whenever you put on those eyeglasses, you’re putting on the lenses of how little can I spend and I want to play defense instead of offense. Does this sound familiar, Beth? Yeah, she’s nodding. We can actually shift. We can build your competence so that you know your numbers and that you can start really owning what it’s like to use money in a productive way. 

And, Beth, I want you to be open to learning about these right now because this is your new chapter in life. You’re getting married to somebody who’s going to bring you to a different level of personal finance. And obviously, it’s a privilege and it’s a responsibility. And my dream for the two of you is that you can both accept the gift that you’ve been given and you can thrive in it. It doesn’t mean you have to spend $1,000,000 on shirts or whatever, but it does mean you need to be realistic. Financially you’re doing well.

Beth: [00:29:43] I guess I just have to get more confident with the numbers.

Ramit Sethi: [00:29:46] Yeah. You’re getting married and you’re about to walk into a relationship where the two of you jointly have almost $1,000,000. Yes. You need to get comfortable with these numbers.

Beth: [00:30:01] I know everybody brings their earnings to the table. I guess when it comes to money, it doesn’t feel equitable and I’m worried about– not that I think John would do this, but I’m worried about there being resentment.

Ramit Sethi: [00:30:16] Who would resent who?

Beth: [00:30:19] I’m worried that John would come to resent me someday.

Ramit Sethi: [00:30:25] For what?

Beth: [00:30:26] For not making as much, I don’t know, being a deadbeat. I know he doesn’t think of me that way. But like–

Ramit Sethi: [00:30:35] Why don’t we just ask him? Because sometimes we create fears that don’t even exist. But, hey, maybe he thinks you are a deadbeat. Why don’t we find out right now before you’re married? John, is your fiance and soon-to-be wife in less than 30 days a deadbeat?

John: [00:30:48] No. No, she is not.

Ramit Sethi: [00:30:51] I was like, this guy better answer pretty quick. No, right off the bat he had the answer. Okay, fantastic. So, Beth, hey, maybe it’s possible at some point in the future that feelings change. I want to be realistic. But as of today, would you agree that John does not think you’re a deadbeat and does not have any plans to think you’re a deadbeat in the future?

Beth: [00:31:15] Yeah, that’s fair.

Ramit Sethi: [00:31:17] [Narration]

My philosophy is that life is hard enough. Why create more problems than we already have? Sometimes the things we fear are just in our heads. So if we have the chance to find out if they’re actually true, why not ask? Beth worries John might think she’s a deadbeat, so ask him. Now at least you have some information. 

Will that change how she feels overnight? Of course not. But at least she can start to calibrate if her feelings are leading her astray or not. This is covered in CBT or Cognitive Behavioural Therapy a lot more. So if you struggle with catastrophizing and fears, I would recommend talking to a CBT therapist. 

[Interview]

So you have basically $800,000 in net worth now. Right now it’s his and her money. When you get married, what is the plan?

Beth: [00:32:12] So we have some shared and some split.

John: [00:32:15] Mh-hmm.

Beth: [00:32:16] And that’s normally where the shared checking account is what normally covers our fixed costs. Sometimes John covers extra fixed costs just because of where our credit card is.

Ramit Sethi: [00:32:29] John, do you contribute proportionally?

John: [00:32:32] My contribution is a little higher. I contribute about 26, 28% of my net to the joint account, and Beth puts around 20 to 23% of her net into the joint.

Ramit Sethi: [00:32:47] How did you all decide on that number?

John: [00:32:51] It just felt right at the time.

Ramit Sethi: [00:32:56] John’s vagueness is almost overwhelming, and it doesn’t help.

John: [00:33:02] That’s felt a lot of stress around, “Oh, no, I’m a deadbeat. I’m not contributing enough or as much as you are. I don’t think it is enough.”

Ramit Sethi: [00:33:10] Okay, hold on. What’s up with this deadbeat comment, Beth? You got a deadbeat in your family or something?

Beth: [00:33:17] No, no, I don’t know. But I probably have been the deadbeat in relationship. I’ve been in multiple relationships with people where one of us is the breadwinner, one of us isn’t. And in almost all of those relationships, there have been times when I’m barely making ends meet with somebody who’s much more financially well off. And as the relationship went on, they became really resentful of having to cover more costs.

Ramit Sethi: [00:33:45] So is this where the fear comes from of your soon-to-be husband, eventually thinking of you as a deadbeat? Okay. So can I ask you a couple of questions about that? I respect that that’s how you feel. I’m curious about, how have you responded to that. What kind of things have you done to prevent that from happening?

Beth: [00:34:14] Things that I have done to prevent that feeling of being a deadbeat. When we first started to see each other, John invited me on a big family vacation and I didn’t think I could afford it, and he offered to pay for me to go and I would not let him. I saved to make sure that I could cover my half because I didn’t want to feel like dead weight. I didn’t want to be a burden, so I’ve worked really hard to try to carry or try to keep up with joint expenses, joint needs, even though I know– like I feel bad when John has to pay for stuff because I can’t.

Ramit Sethi: [00:35:08] Is this tough to talk about?

Beth: [00:35:11] Yeah, it’s tough because I do feel like I’ve made a lot of progress financially, especially since knowing John. In the time that we’ve known each other, I’ve gone from having debt to being debt free and really just shifting my whole financial lens. It’s been a lot of work, but I still am really afraid that one day he’ll look at me and he’ll be like, “Oh my God, what am I doing?”

Ramit Sethi: [00:35:45] What would it take for you to not feel afraid?

Beth: [00:35:50] I don’t know yet, but maybe just feeling more aware. Me not knowing where the money has been was a big thing, which is why sitting down and doing the conscious spending plan, I felt so much better afterward because I was like, “This is what it all looks like.” So maybe just having more knowledge.

Ramit Sethi: [00:36:14] I think that’s part of it. That is that basic competence, but I think it’s more than that because in the past, John tried to explain some of the numbers, right? And you resisted it. So even though there was an attempt to share the information and even now you have the information in front of you. Is it changing your feelings?

Beth: [00:36:38] Not really. I mean–

Ramit Sethi: [00:36:40] Yeah.

Beth: [00:36:41] No.

Ramit Sethi: [00:36:42] Yeah, it’s kind of hard to admit that because we’re taught in America that if you give people the right information, then they can make an informed decision. We treat it like it’s religion that as if giving someone information is going to change their mind. Information hardly ever changes people’s minds. Information alone is not persuasive. 

[Narration]

We have a deep belief that we are rational, almost robotic in the way we think. Give people the right information and they will make an informed decision. Really? So why do most people in America eat unhealthily and save less than 5% of their income? The information is out there. 

It turns out that information alone is not very persuasive at all. That’s why my material always includes the element of psychology, which is vastly underappreciated in behavioral change. Speaking of psychology, Beth and John have been wanting to ask me about a prenup.

[Interview]

Beth: [00:37:48] We have started our process of doing a pre-nup and we are obviously reusing the sheet. We are not financially the same beginning and I guess do you have any advice for people who are trying to do the thing? Every time we talk to anybody we know, any of our peers, any of our friends, no one has done a prenup.

Ramit Sethi: [00:38:24] Why don’t we start, take it step by step? We did talk about in terms of if we separate after one year, five years, 20 years, etc. And those we discussed it and it was also discussed between lawyers. And it was easy at first and then it got pretty hard. Fortunately, it’s unlikely that two of you will die, like in the next year. It certainly should be something that you go and do. You could do it at the same time or not. But yeah, we definitely have those conversations. 

You guys are getting married in a month, so you’re probably not going to get a prenup done in that amount of time. A lot of people do a postnup. So a postnup is definitely a very strong option for you to do. Getting a prenup done in one month without even having lawyers, I don’t know. It’s possible, but it’d be very difficult. So how would both of you feel about a postnup?

Beth: [00:39:25] I mean, I assume it would not be a big– I mean, we’re both 100% we’re doing a prenup. John has a lawyer and he’s gone through the first round of writing stuff out. And I think he’s received the first draft of his stuff so far.

John: [00:39:41] Beth and I just haven’t had time to connect because she doesn’t have bandwidth to go through with me.

Ramit Sethi: [00:39:48] So I totally get that. Can I just say as the person who walked into our relationship with more money, we had discussions about having a prenup and my wife was open to it. But I think, John, one thing I would say, is a prenup important to you? Are you the one who brought it up?

John: [00:40:11] No, I think Beth initially brought it up as a good idea because there was such an inequity in our assets.

Ramit Sethi: [00:40:21] It just seems like it’s becoming more and more clear how much this job is costing you, Beth. To not be able to have this discussion is a serious issue. And to talk about having a prenup and not have the time to do it before a wedding– you have– we’re talking about $700,000. It’s pretty serious. So it seems to me that regardless of what choices have been made in the past, that you two have got to find a healthy way to talk about this stuff. 

[Narration]

Notice how Beth’s tendency to avoid difficult conversations appears in so many different places. She’s the one who asked for a prenup, but she won’t take the time to review the material even though there are only a month away from being married. She says it’s because of the stress of possibly leaving her job.

[Interview]

Beth: [00:41:13] It was like, I need to leave my job. I’m worried about us feeling not equitable, especially because we’re about to get married. And then I’m going to leave my job. So I’m really worried about that. And I know that when I come home from work, I don’t have the bandwidth to sit and help. I think I could do a lot more and address some of the issues that we’re letting slide by if I didn’t have to go to work every day. 

I don’t think it’s good for me to stay there, but I am scared that it will be a problem and you will see me as a burden. And I’m worried, too, that what I contribute around the house won’t be enough. I’m worried that helping out more won’t make up for the deficit in money.

Ramit Sethi: [00:42:15] John, are you curious what she’s scared of? She mentioned the word afraid, scared. Are you curious?

John: [00:42:24] Beth, what specifically is it that you’re scared of?

Beth: [00:42:30] I’m scared of you thinking that I don’t help enough. You are so good at doing so much. You keep the house running and you do everything so well that I’m worried that if I step up, it still won’t be good enough. I’m scared that you will not see me as an equitable partner, even though even you’ve never made it seem you have a problem with it.

John: [00:43:01] Beth, I think, given your past relationships, it’s a totally valid fear. I don’t think that it’s where we’re headed. And I certainly don’t feel like that. But what could we do to make it better so that you didn’t feel like that?

Beth: [00:43:22] I think if we were more open talking about it, if I knew– you would let me know, if I knew that you would come to me and say, “Hey, you know what? I’m feeling a little worried–” if I knew that you would come and tell me, I think I would be more reassured. I’m worried you won’t tell me, that you’ll just keep it to yourself and it will fester. And that’s where the resentment would come from.

Ramit Sethi: [00:43:55] John, can I ask you a question?

John: [00:43:57] Yeah.

Ramit Sethi: [00:43:58] Are you comfortable with Beth never working again?

John: [00:44:04] Yeah. I think so. If Beth didn’t have something that she was really passionate about and it wasn’t her thing, as long as we could make ends meet it is all right.

Ramit Sethi: [00:44:17] That’s my question. Could you make ends meet for the type of life that both of you want?

John: [00:44:26] I think probably. I know that we have a lot of travel potentially in our future, and I’m not exactly sure what those trips would cost.

Ramit Sethi: [00:44:43] Seems kind of an important question, right?

John: [00:44:47] Yeah.

Ramit Sethi: [00:44:48] Beth, where do you stand on this? Do you think that John would be okay with you never working again? I’m extending this, obviously, beyond what you think you’ll take off work. But do you think he would be okay with you never working again?

Beth: [00:45:00] No.

John: [00:45:02] How long of a break are you anticipating on needing from work?

Beth: [00:45:09] Well, I think probably at least three months. I want to look at changing careers completely. I don’t want to go back into the field that I’m in and I need some time to emotionally recuperate from what I’ve been doing. I also don’t know where I want to go next, so I think that three months, six at the high end. If I need to take time and get a part-time job, I’m more than willing to do that.

Ramit Sethi: [00:45:45] John, I want to know when you expect for her to get a job. Just because you say it doesn’t mean she has to agree. But are we talking about three years from now? Are we talking about three decades? What are we talking about here?

John: [00:45:59] Generally, I would expect Beth to have another job in a year.

Beth: [00:46:07] I would like to definitely have a job for about the year max. I am hopeful. I’m a little nervous, I’ll admit because I am looking at changing completely. But I think that if I can get my mental health under control, I could probably do it in six months.

Ramit Sethi: [00:46:30] That’s why I wanted to ask about. Sometimes I think I’ve heard a lot of stress and it almost seems we’re walking on eggshells. Or is it that you’re working so many hours?

Beth: [00:46:41] My work is very emotional. I give a lot every day. And that work is often not appreciated. And so I’m burned out, but I’m afraid to leave because I don’t want to be a burden. I’m also afraid that I might never want to go back to work, like if I actually get to feel healthy and good, why would I ever want to go back?

Ramit Sethi: [00:47:12] To that job or to any job?

Beth: [00:47:18] That job for sure. I’m starting to doubt that there’s a job that’s not going to feel like garbage.

Ramit Sethi: [00:47:28] Because you’ve only worked in bad jobs?

Beth: [00:47:32] Lately, yeah.

Ramit Sethi: [00:47:34] And how did you learn the skill of finding a job?

Beth: [00:47:41] Well, I didn’t really learn how to find a job. I came out of grad school in a recession and I just tried to pinpoint what I could do. 

Ramit Sethi: [00:47:53] And then you scrolled from one job to another.

Beth: [00:47:55] Yeah, essentially in the same field, doing the same thing. And I’m good at it. It’s nice to be good at what you do, but it’s–

Ramit Sethi: [00:48:04] Yeah, but that it’s not good for you. And the way you’re talking about it, you basically just rolled from one job to another without being intentional or active in choosing your career. So to jump to the idea that there are no jobs out there that would be good for me really reflects that you haven’t yet build the foundational skills of finding a job that’s your dream job.

Beth: [00:48:34] I tried to start but right now I’m so burned out. I was debating on telling you this or not, but I bought the dream job system a year ago and I can’t get through playbook 2 because I can’t actually think about anything I’d want to do. So I go and I look for the careers and I go on LinkedIn and I look and I search the job titles and nothing makes me feel passionate right now. And that’s why I want to take some time because I want to try to feel passionate about something again.

Ramit Sethi: [00:49:14] Well, Beth, everyone on this goal wants you to do that. So I think you should hear us all loud and clear, including yourself. There’s no reason for you to be at this job right now. If you can’t think of one job that’s exciting to you, that is a problem. 

[Narration]

Okay, listen, I need to tell you all about the dream job program that I have. If you are stuck in a toxic job or if you are being underpaid, or if you just don’t love what you do, this is where you spend eight-plus hours a day. You should be working at a dream job. 

The biggest challenge people have is what is my dream job? And most of us have never been taught the process of identifying a dream job and then landing it. We just take what’s given to us. And like Beth, we bounce from job to job. You can change this and you can learn the skill of landing a dream job. I’ve helped a lot of people do this often with five, 10, 15, even $25,000 raises. To learn more about the Find Your Dream Job program, go to iwt.com/job.

[Interview]

So can we all agree that it’s time for you to stop this job? Let’s take a vote. We’ll start with the least important person on this call, and we’ll go to the most important person. Number one, me. Least important. Yes, I think you should leave this toxic job. John, what do you think?

John: [00:50:35] John is also in agreement to leave the job.

Ramit Sethi: [00:50:38] And how about the most important person in this decision, Beth?

Beth: [00:50:41] I would feel comfortable putting in my notice when we come back from our honeymoon.

Ramit Sethi: [00:50:46] That’s two months of soul-destroying work away from now.

John: [00:50:53] Yeah, that’s too long.

Ramit Sethi: [00:50:56] Yeah. Why is it that I think your mental health is worth more than you do?

Beth: [00:51:06] I will because I put really low value on my mental health, obviously.

Ramit Sethi: [00:51:11] Yeah. And you put a lot of value on?

Beth: [00:51:15] Money.

Ramit Sethi: [00:51:16] Yeah. And the irony is that when you have a lot of money, which you do, you have $800,000, you don’t actually change the way you feel about it at all.

Beth: [00:51:31] No. No, I guess.

Ramit Sethi: [00:51:34] I see this 50 years from now as the first opportunity for the two of you to have really developed a joint vision with money. And it’s training wheels. It’s like, okay, John is over here saying, “It doesn’t really matter to me. It’s fine. We could pretty much spend anything.” Beth’s over here craving clarity and certainty and saying, “What do you mean, anything?”

So I would look at it as training wheels that really exposed some fundamental differences in how we think about money. And if you don’t solve this and make a system for it, you’re going to run into the future problem when it’s taking a vacation, buying another house, having children, and on and on and on. 

So there needs to be a deeper connection. There needs to be a lot of pre-work that’s been done about how you both see money. We’ve got to start with that confidence and competence. It just doesn’t make any sense to worry about $3 questions anymore. How does that strike you?

Beth: [00:52:40] I think what you said and how you explain it is really concise about the issue. Hearing you say it, I’m like, oh yeah, definitely this makes a lot of sense, especially in what we’ve been seeing.

Ramit Sethi: [00:52:52] Okay. John?

John: [00:52:55] Yeah, I would agree with that. It definitely sounds like we need to have clear communication and get on the same page.

Ramit Sethi: [00:53:09] Talk to me about now. What can you do differently?

Beth: [00:53:14] It would be really nice for me first and John’s second. No offense, I love you, but I’m supposed to be putting me first. Come game. I definitely I don’t want to be scared and I don’t want to be worried anymore.

Ramit Sethi: [00:53:33] You’re about to enter this joint union, which is really serious. It’s a business contract. It’s for the rest of your lives. And the fact that you’re talking to me before you get married means a lot. It really does. And I think the two of you that you’re starting to really take this seriously now. 

[Narration]

Beth finally resolves to put in her resignation notice just before the wedding so she’ll come back to finish her last two weeks on a positive note. I want to share an excerpt of the follow-up letter that Beth sent to me. I think it’s quite revealing, and I’d like to encourage you to get the link from the show notes and get both follow-up letters because they are incredibly interesting. 

Beth said, “I am surprised about how emotionally raw I felt during and after the call. I felt really alone. Even with my partner there, I felt really under the spotlight. I realized I was avoiding things because I thought they were too hard. And then I was worrying about those same things which I was avoiding. 

“I was surprised at how my avoidance showed up time and time again. Even as a child, I was conditioned to avoid difficult situations and to some extent, all women are conditioned to avoid difficult situations. So the fact that I am avoiding hard conversations with my partner and asking him to hold me accountable isn’t fair to him. I feel like I have a lot of personal work to do. 

“I’m also surprised and a bit saddened that when I asked for resources, I was rebuffed. I do sincerely want to learn and I was hoping that I could get more help. The internet is full of shitty money advice and while I obviously need to reread Chapter 7, I was hoping to get more solid references.” 

I find this letter interesting on so many levels, and there’s more to it in the show notes. First, I think it’s absolutely incredible that Beth showed up and she engaged with this conversation. That cannot have been easy. Second, I’m glad that there is a reason and inciting factor for Beth and John to talk about money because they’re getting married soon. 

I did notice that Beth’s avoidance showed up in many ways, including her last paragraph. Asking for more and more resources is simply another mode of avoidance. To put it bluntly, you don’t need ten different books. You need to reread Chapter 7. I know that Beth will continue her therapy– she mentioned that to me, and I’m very glad to hear that. I’m wishing the best for her and, of course, for John, who in his follow-up letter acknowledges that he has been a bit loose when it comes to talking about money and it’s not serving them. 

I have a lot of confidence for Beth and John. I think that they showed up today and had a difficult conversation. I think they know that what they are doing is not working. And I think they both acknowledge that this situation goes much deeper than simply the price of glasses for their wedding. I wish them all the best. And now listen to a preview of next week’s episode.

Kacey: [00:56:49] So basically he asks me on a date to go to dinner, and I’m like, “Great. We get the kids to bed. We leave a little later than we had planned. So the place that he wanted to take me was closed. So we leave the house. Doesn’t even mention the fact that he had invited me to dinner. Just drives to the store. I’m like, I thought we were going to dinner. Well, the place I was going to take you is closed. And the reason that he wanted to go to that place was because we had a buy one get one free, and he had a gift card. So he could take me to dinner and spend $0. Once that option was off the table, dinner, not a word. He didn’t even mention it. He pretended like it wasn’t even said.

Ramit Sethi: [00:57:22] And it’s been almost, what? 18 years since you’ve been married? What’s your advice for everyone listening who wants to have a long marriage? What would you tell them?

Kacey: [00:57:31] Not to ask us. We’re doing it all wrong. I don’t know.

Ramit Sethi: [00:57:37] Do you believe that?

Kacey: [00:57:39] Yes.

Ramit Sethi: [00:57:40] Really, why?

Kacey: [00:57:42] I feel like it’s been 18 years of just hanging on.

Ramit Sethi: [00:57:46] Really?

Kacey: [00:57:47] Yeah. So we’re here. We did it. We’re doing it. But–

Ramit Sethi: [00:57:51] Gosh, that’s tough to hear.

Jim: [00:57:54] If we continue on this path, in a few short months, we will get to the point where the money will be gone. We won’t have enough.

Ramit Sethi: [00:58:05] Thanks for listening to I Will Teach You to Be Rich. I’m Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven’t read, I Will Teach You to Be Rich, my book, pick up a copy. You can get it at any bookstore or any library, and it will show you the specific tactics for how to build the I Will Teach You to Be Rich system into your personal finances.