Episode 231. “Our $200k in crypto is gone. Now we live with his mom.”



Angela (31) and David (34) thought they’d built a future on $200,000 in crypto. Instead, they lost it all—and now they’re living in David’s childhood home with his mom. Angela dreams of traveling to Colombia to be with family, while David quietly panics about their finances. She sees every course and trip as a step toward freedom, but he sees their savings shrinking with no plan in sight. With only $4,000 in the bank and a 5-year-old to support, can they stop improvising and finally create a stable financial life of their own?

In this episode we uncover:

• How David blew through $200,000 in crypto
• Living rent-free with David’s mom
• The “get rich quick” approach to debt: bankruptcy talk, unrealistic timelines, and skipped planning
• Why improvising instead of planning is their default financial strategy
• A $3,000 retreat vs. moving out: how conflicting priorities reveal deeper issues
• The moment they see the truth in their spending
• How David’s mom ended up in credit card debt from supporting them
• Angela’s scarcity and rescue narratives from childhood
• Why David avoids stress and Angela absorbs it
• The cost of being “Dreamers” (big visions with no real plan)
• Signs their daughter is already noticing financial stress

Chapters:

(00:00:00) “We have no space to breathe”

(00:25:05) Ramit breaks down their numbers

(00:35:12) “Our vision isn’t aligned to our actions”

(00:52:42) “Like mother, like daughter”

(01:03:09) “Do you want major changes or minor changes?”

(01:15:26) “We’ve never created a plan”

(01:36:53) Where are they now? Angela and David’s follow-ups

Links Mentioned In This Episode:

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Transcript 

Download the full transcript PDF 

[00:00:00] David: I went through $200,000 of cryptocurrency, and I treated it as income instead of going out and finding a job because my head was in the clouds.

[00:00:09] Angela: There’s no coherence between what we say we want and what we’re actually doing.

[00:00:14] David: For the entirety of last year, my mother was paying all of our expenses. She’s supported us so much to the point where she’s put herself in a financially difficult position.

[00:00:23] Ramit: You don’t think it’s interesting to have a mechanical engineering degree and be living with your mom who is now in $90,000 of credit card debt from supporting you?

[00:00:31] David: No, I don’t.

[00:00:33] Angela: These things feel like we’re failing, like I can’t do what I want to do.

[00:00:38] Ramit: I don’t think you’re setting the expectations for yourself high enough because there are minimum wage jobs that could pay you more than you are making right now.

[00:00:45] Angela: We’re improvising everything. We don’t know anything. We’re just improvising.

[Narration]

[00:00:54] Ramit: Today I’m talking to Angela and David, a couple in their early 30s with a five-year-old daughter, living in a two-bedroom house with David’s mom. That’s three adults, one child, one house, and the plan is to save for a down payment on a house of their own. That was the plan almost a year ago.

[00:01:12] Unfortunately, despite the free rent, despite living with grandma, despite as they put it, “Trying to get their [Bleep] together,” they are still broke and still wondering why nothing is changing. And that is why they’re here, to figure out where all their money’s going, and why that money keeps slipping through their fingers.

[00:01:31] Angela laid it out in their application, and I have to tell you, this is one of the most brutally honest things that I’ve read. In it, she writes, “We have faced many challenges over the course of seven years together. David had investments when I met him, and at some point he had up to $100,000.

[00:01:48] “However, instead of being extra smart about it, we had a kid, refused to get jobs or got jobs that paid too little and quit, lived a Rich Life as if we were actually rich, but only with investments. And well, obviously, we blew all the investments out. We live with David’s mom, and even like that, it doesn’t seem like we are saving enough or doing well enough with our money.”

[00:02:12] If you’ve ever looked back at your last five years and thought, how did we end up here? This episode is for you. Let’s check out their numbers. I’m going to pull up their conscious spending plan right now, which tells me how much they make, how much they spend, and what their four key numbers are. If you want to run the numbers the same way I do, download your free conscious spending plan at iwt.com/csp.

[00:02:33] Here we go. Assets, $4,000. Investments, $761. Savings, $4,242. Debt, $34,632. For a total net worth of negative $25,629. Fixed costs, 55%, which seems outstanding, but then you have to remember, they do not pay rent. Investments, 10%. Savings, 17%. Guilt-free spending, 24%.

[00:03:03] Okay, well, they’re doing some of the right things, but candidly, their dream of buying a home is not a reality. I look through their numbers, and I have a lot of questions, like, how did you blow through your money? How did you decide to live with your mom? And living with your mom, not paying rent, where’s the money going? So let’s get into it with Angela and David.

[Interview]

[00:03:25] Ramit: What’s it like day to day? You have a two-bedroom place, 5-year-old daughter, and your mom is there.

[00:03:30] Angela: It always feels stressful. That’s the biggest thing. It’s always stressful because it’s small space. There is obviously no space for anybody to do their own thing. We’re all always together in a way. Our daughter sleeps with us because of the lack of space. So that affects my sleep too, because I’m having her next to me moving all night and being literally on me.

[00:03:55] And then my mother-in-law gets upset because we obviously are in a completely different stage of life than she is. She’s 60 something. She’s retired, so she has a completely different schedule, and she wants to take a nap at noon, and we are here at noon doing things. And then we get up early to bring our daughter to school, and she’s still sleeping in. And then we’re making noise while we’re cooking breakfast.

[00:04:21] And she’s upset because she’s tired and wants to sleep, and we don’t let her, technically. It’s a very disruptive dynamic for everybody. There’s no space for anybody. It’s very stressful.

[00:04:34] Ramit: Okay. All right. David, what’s it like for you? Because it’s your mom, her place. What is it like for you from a dynamics perspective?

[00:04:43] David: I feel defensive many times because I see how Angela reacts. I see the anxiety that she feels, so I feel defensive toward her. And I find myself at times projecting that onto my mother. When my mother says something, let’s say if she makes a comment and I sense that Angela gets angry or it bothers her, I’ll say something. And I don’t necessarily need to always say something. Instead, I could remain quiet and I could keep the peace.

[00:05:12] Ramit: Are you the peacekeeper?

[00:05:13] David: I try to be. I try to be as grounded as possible, but more than anything, I’d see what it’s doing to Angela, how she wants her own space. So I feel this pressure, this anxiety at work to constantly perform. And it’s exhausting.

[00:05:30] Ramit: You’ve been living in this house for roughly nine months or so. Is that correct?

[00:05:36] David: Correct.

[00:05:36] Angela: Yes.

[00:05:37] Ramit: What’s the stress level 1 to 10? 10 is the highest.

[00:05:40] Angela: 10 for me.

[00:05:41] David: Two or three for me.

[00:05:43] Ramit: Whoa. Angela says 10. David says two.

[00:05:49] David: Yeah.

[00:05:49] Ramit: That’s quite shocking. Can you explain that?

[00:05:51] David: I try to be neutral about most things. I don’t see any purpose in stressing myself out about everything.

[00:05:59] Ramit: All right. And Angela?

[00:06:00] Angela: I think for me it’s a combination of many things. If it was my mom, maybe I’d feel different and I wouldn’t be so stressed out. But it’s not my mom, and I can see that she’s very stressed. She’s very tense with us being here. I don’t know why he says two or three, because they butt heads all the time. They argue a lot, and I argue with her. And there’s a lot of tension, and I don’t know how it can be less than a 10.

[00:06:24] Ramit: Am I going to get a chance to talk to the mom today?

[00:06:26] David: Definitely not.

[00:06:27] Ramit: That would be so awesome. Ah, the first time ever. Bring her out. All right. Hey, by the way, for everyone listening, not watching, when I ask that question, they both shook their head vigorously, like, that’s never going to happen. How did you end up living with your mom?

[00:06:44] David: I lost a job. We moved to Columbia. Angela had a few, or a couple rather grandparents that passed the previous years. So she wanted to be close to family.

[00:06:55] Ramit: And what about living in your mom’s place?

[00:06:57] David: I moved back first last October. Angela and my daughter moved back last December. I came back specifically to focus on work and to save, to invest, while they stayed there for a couple of more months.

[00:07:10] Ramit: Did you talk about this between the two of you? Like, here’s why we are moving back into David’s mom’s place. Here’s the plan. Here’s what we’re going to do. What was that conversation like?

[00:07:20] Angela: We came back with a specific plan in mind. When we left Colorado, which is definitely the place where we wanted to be, David lost his job. We went to Columbia, and we spent a few months there. And then everything was just like, we don’t know what we’re doing next.

[00:07:40] All our stuff is still in Colorado, and we didn’t know what we wanted to do. So David came back to stay with his mom. And while he was here, in my head, it was very clear that I did not want to come back to Massachusetts. But that was where his mom was, and it’s the place that he could save until he at least had a job and had some income.

[00:08:02] So the conversation initially had been that we were going to build a house in her land. And David had that conversation with her while I was in Columbia with our daughter. So he presented that idea or that option to me, and he’s like, “Hey, my mom said this. I think it’s the best bet for us. We can just build something here, and that’s it.”

[00:08:28] So I started to wrap my head around it and warm up to the idea and then we got here in December, and she changed everything within a week. And she was like, “Actually, you can’t build here for this and that.” And so that upset me because it was like, that was literally the only reason why we came here. I could have still been in Columbia. I would’ve rather done that if I had known that plans were going to change so drastically.

[00:08:59] Ramit: So that brings you to where you are today.

[00:09:01] Angela: Yes.

[00:09:01] Ramit: Do you pay rent?

[00:09:03] David: No.

[00:09:04] Ramit: Wow. Okay. That’s generous of your mom.

[00:09:06] David: Yeah, it is.

[00:09:07] Ramit: Okay. I think I understand the issue of being in your mom or your in-law’s house. What’s the plan to move out?

[00:09:15] David: That’s the thing. We don’t really have a lot of structure around that. And I think that’s what’s stressing Angela in particular out more than it is me. I feel the pressure because you feel that anxiety, but right now there is no plan necessarily. It’s to be out of here by June of next year, but right now we’re talking about moving out of the state back to Colorado, and I’m just trying to figure out how to do that, to have a job set up before I get over there.

[00:09:43] Ramit: There’s no plan. That’s what I’m hearing.

[00:09:44] David: There’s no plan.

[00:09:46] Ramit: Angela, would you agree?

[00:09:47] Angela: Yeah, absolutely.

[00:09:48] Ramit: Okay. It sounds like there’s a wish, but not a plan.

[00:09:52] David: Yes, correct.

[00:09:53] Angela: So the reason why it’s June, first of all, is because we sat down based on what David’s income was. We were like, “Okay, if we save this amount of money per month, we will save whatever amount of dollars in a year and a half.” So by then we’ll have the down payment. We will have this blah, blah, blah, and we will just buy a house, and that’s it.

[00:10:15] So it was way simpler in our head. And then we hadn’t addressed the debt that we had. We had $40,000 in debt, and in our head, it was like, okay, we’re saving for the down payment. And then–

[00:10:29] David: We’ll just file for breaking bankruptcy. That was the plan.

[00:10:32] Ramit: What? Who taught you that?

[00:10:33] David: Yeah, nobody taught us that. That was just a silly idea. I thought it was a way of just getting out of that debt. So instead of doing that, I had settled.

[00:10:44] Ramit: So you had a plan of, we’re going to move in with my mom. We’re going to save this much for this amount of time. That will give us a down payment. That part is admirable. I wish more people did that, if they go live with their parents. That’s very forward looking. You forgot about the debt. You had a, what you call a silly idea of just declare bankruptcy. It’ll be wiped off. And then we can go over to Colorado and buy the house. Which of course, didn’t work.

[00:11:09] Angela: Mm-hmm. We did meet with an attorney to discuss the bankruptcy.

[00:11:13] Ramit: And he told you what I just said, right?

[00:11:14] Angela: And he was the one that was like, “Why would you do that? It doesn’t sound like you need to do that. You just pay your debt basically.”

[00:11:21] Ramit: And what was your reaction when he was, “You’re not going to declare bankruptcy– you’re going to pay your [Bleep] debt?” What’d you both say to him?

[00:11:27] David: To be fair, it wasn’t just bankruptcy that we were considering. It was debt consolidation. It was debt settlement, and–

[00:11:35] Ramit: People who are in debt will do everything except pay their debt. Literally, they’ll do every [Bleep] thing on the planet. A 0% card, rate chase, debt consolidation, all kinds of stuff with their mortgage. Everything except pay the debt. Now, there are times where a debt consolidation makes sense. Sure, that can work. Negotiation, yes. Always for medical bills. Fine.

[00:11:58] But how about setting up a debt payoff plan and then automating your payments every single month? They’re like, “Oh, no, no, no. I wouldn’t do that. That’s [Bleep] crazy, Ramit. It’s the get-rich-quick approach to debt. And whenever somebody tells me this, there’s always clues of that same approach in other parts of their finances. Is that true for you?

[00:12:18] Angela: Yeah, absolutely.

[00:12:20] Ramit: Let me understand a little bit more about money in your relationship. How often do you talk about money?

[00:12:25] David: Now, very often.

[00:12:27] Ramit: Now means what? Like in the last month.

[00:12:30] David: No, it’s almost every day.

[00:12:32] Ramit: Every day? Is that true?

[00:12:34] David: Yeah, it is. We’re trying to change our perspective and our conversation around money. We’re trying to have more positive conversation around money.

[00:12:41] Ramit: What’s an example of, in the past, what you would used to do?

[00:12:46] David: It was always stress in the past. I went through $200,000 of cryptocurrency, and I treated it as income instead of going out and finding a job because my head was in the clouds. That’s an experience that I really beat myself up about.

[00:13:01] Ramit: What happened?

[00:13:01] David: Prior to meeting Angela, I made investments, and those investments did very well, and it was in cryptocurrency. We moved to Colorado in 2021 for a year. And over the course of that year that crypto dropped from its peak of 4,800 to around 1,300. And yeah, we spent it. We treated it as incomes.

[00:13:24] Ramit: What’d you spend it on?

[00:13:25] David: Living expenses, rent. We paid six months of our rent upfront.

[00:13:31] Ramit: What do you think about this, Angela?

[00:13:33] Angela: Obviously, yes, there were a lot of mistakes on both our ends. We were very irresponsible. As David said, we did treat it as income.

[00:13:43] Ramit: What does it mean, we treated our investments like income? What does that mean?

[00:13:47] Angela: That we didn’t have any income, so everything we were spending was from the investments.

[00:13:51] David: I just kept pulling it out of Ethereum, out of the wallet. We would go out to eat way too often. We were very irresponsible with that.

[Narration]

[00:14:01] Ramit: Let me break down the things we’ve learned in the last few minutes. David cashed out over $200,000 in crypto and treated it like income, using it to pay rent and eat out and live as if they had a steady paycheck. Now they are broke, living in a two-bedroom house with David’s mom, their five-year-old daughter, and they have zero financial stability. Yet they keep saying they had plans. Moving to Columbia, moving to Colorado, moving in with David’s mom and hoping to build a house on her land. I don’t know if those are plans.

[00:14:32] I think they might just be desires. Like, I want to move to Thailand. Is that a plan? Of course not. Especially if I have kids and bills and debt. So now, they’re packed into one room, stressed out, still with no clear plan to move forward. If you have found yourself in a situation where you are trying to figure things out, my question is, how? What is your specific plan?

[00:14:56] I think a lot of us need to take the time to admit sometimes, I don’t know how to make a plan to get out of this one. So if that sounds familiar, like you’ve been reacting instead of planning, you’ve been bouncing from idea to idea without any real structure, this is exactly the kind of thing that I cover in a deep way in my money coaching program.

[00:15:16] I’ll show you how to build a real plan and then I will help you actually stick to it. You can sign up right now at iwt.com/moneycoaching. Now, here’s what I want to know. How do they earn income when they’re not cashing out their crypto? We’re going to get into that right after this.

[Interview]

[00:15:35] Ramit: What do you both do for a living?

[00:15:36] David: Car sales, short answer.

[00:15:38] Ramit: Angela?

[00:15:40] Angela: I’m a birth doula.

[00:15:41] Ramit: Okay. Are you independent? Like you run your own business?

[00:15:44] Angela: I do.

[00:15:45] Ramit: Great. And how supportive are you of each other’s careers?

[00:15:49] David: Very.

[00:15:50] Angela: Yeah.

[00:15:52] Ramit: Okay, cool. Can you think of a time in the last six or so months where you were not on the same financial page?

[00:15:58] Angela: For us it’s almost always related to my– I always want to learn a lot of stuff, and I take a lot of courses that sometimes I end up not applying. And it happened days ago actually. I’m a birth doula and a postpartum doula, and I want to take a retreat that is in person. It’s six days.

[00:16:21] And I said to David, hey, I want to do this. I’ve been postponing this for years. It’s next year, so I have a year to figure out how I’m going to do it, but I’m going to do it. And then we had a conversation about our living situation. And he was like, “I think you can agree that if we’re moving out, then you’re not doing that retreat.” I don’t think we actually had a whole conversation about it, but in my head it was like, but I am doing the retreat. We are moving out, and I’m doing the retreat, basically.

[00:16:54] Ramit: How did the conversation end?

[00:16:56] Angela: We didn’t get to an agreement. I just said I was going to do it.

[00:16:59] Ramit: Is that a common dynamic where you’ll discuss, debate, argue, but not make a decision?

[00:17:05] Angela: Yes. Or, like I said, I make the decision without really, I don’t know, talking about it much, I guess.

[00:17:13] Ramit: Okay. David, what was your perspective on that exact conversation?

[00:17:16] David: I felt frustrated for sure. I’m always going to be supportive of Angela, and I do encourage her, and I love that she’s always on this journey of learning, but I do feel like we have a direction that we want to steer ourselves in, and putting money into that right now seems, I don’t want to say unnecessary, but in a way, I guess, to me it feels unnecessary.

[00:17:38] Ramit: Why don’t you want to say unnecessary?

[00:17:41] David: Because I don’t want to feel unsupportive. I know that she’s going to find a way no matter what to do that retreat. I’d rather see the money go into investments or to savings or to something for us as a family, or to our daughter.

[00:17:55] Ramit: How much does the retreat cost?

[00:17:57] Angela: $3,000.

[00:17:58] Ramit: And do you have money set aside right now?

[00:18:02] Angela: Not right now. No.

[00:18:03] Ramit: Okay. So it’s not a question of like, we have $50,000 sitting around. Let’s discuss how you see putting it and how I see putting it. The discussion is, we don’t have that money right now.

[00:18:17] Angela: Mm-hmm.

[00:18:18] Ramit: If I were not here and we were not talking, what would happen a year from now regarding this retreat?

[00:18:25] David: We would most likely put money each month into this retreat. I would be setting money aside towards that.

[00:18:31] Ramit: Okay. And then, what, she would go?

[00:18:35] David: She would go, yeah.

[00:18:36] Ramit: Okay. So what’s the problem?

[00:18:39] Angela: Yeah, I think the retreat situation specifically could go one of two ways. One is, and it’s happened in the past, where I ended up putting money towards a retreat that I wanted to take. And then I realized we couldn’t afford it because I would have to travel to Columbia, and that would require tickets and all the things.

[00:19:00] And we just could not do it at the moment. So I ended up asking for that deposit back and just not going to the retreat. But that was extremely frustrating for me. These things feel like we’re failing, like I can’t do what I want to do, basically.

[00:19:16] Ramit: Let me just pause you right there. I can’t stop you from feeling frustrated that you can’t afford things. In fact, I don’t actually think you should be stopped. I think frustration is a natural feeling. I’ll show you an example. Watch this. Hello, everybody. I’m Ramit Sethi, and I would like to buy a rocket ship to fly to the moon five times a year. I want to do it. Oops, I looked at the price and I can’t do that. Now I feel frustrated. It seems a bit absurd, right?

[00:19:46] Angela: Mm-hmm.

[00:19:47] David: Can I say something? Last year was probably the hardest year of our lives. I had lost a job. We were $40,000 in debt. I’m sure if we could even pay for our groceries, and I never want feel that again.

[00:20:02] Ramit: That was last year, and this year you’re talking about a 3,000-dollar retreat.

[00:20:07] David: Yes.

[00:20:07] Angela: Mm-hmm.

[00:20:09] Ramit: How’s that strike you?

[00:20:10] David: I want to take a step back and I want to focus on what’s important. What’s important to me is taking control of our finances, making sure that we have those cushions.

[00:20:19] Ramit: Okay. Angela, what about for you?

[00:20:21] Angela: For me that part is also important because it’s a whole skillset that I’ve been wanting to add to what I do. So it feels like I’ve been getting a lot out of it and I would like to find a way to do it, regardless of still finding a way to invest what we want to invest and save what we want to save. And that feels like a priority to me too.

[00:20:44] Ramit: In your application, you wrote your biggest goal is to buy a house. Can you tell me a little bit about why that’s your primary goal right now?

[00:20:54] David: For our daughter. I grew up in a home. I always had financial security, and like Angela said, in a way we feel like we’re failing. And for me, in my heart, I feel like a home, our own space, something that we own, something that’s ours– or we can go out, build a garden, I feel like that’s success in my heart.

[00:21:15] Ramit: Okay. Angela?

[00:21:16] Angela: Yeah, I agree. I think the biggest thing is having something for our daughter that is ours, something that she can come back in the future if she needs to. And she always has that place if she needed it.

[00:21:30] Ramit: Okay. All right. Let’s talk about it.

[00:21:32] Can we take a look at your numbers?

[00:21:34] Angela: Yes.

[00:21:35] David: Yes, [Inaudible].

[00:21:35] Ramit: Angela, if you can read the word in bold and then the number in full next to it for this entire net worth box, please.

[00:21:43] Angela: Sure. The first one is assets, 4,000. Investments, 761. Savings, 4,500. Debt, 34,632. Total net worth, negative 25,629.

[00:22:02] Ramit: Okay. What do you think about those numbers?

[00:22:05] David: I wish they were positive.

[00:22:06] Angela: Yeah.

[00:22:07] Ramit: Okay. What else?

[00:22:09] David: I’d like to see our investments much higher. That’s our focus, is to increase those numbers.

[00:22:15] Ramit: Okay. Angela.

[00:22:16] Angela: That’s our desire. I wouldn’t say it has been our focus because we haven’t done it. So it is our desire to have that number much higher and invest a lot more, and save a lot more too. But we haven’t done it, so it’s not been our focus.

[00:22:33] Ramit: Okay. Interesting. Let’s continue. This time we’re going to look at the income. David, I’m going to ask you to read off your combined gross monthly income, please.

[00:22:44] David: That’s $9,854?

[00:22:47] Ramit: Okay. So as a household, the two of you combined make $118,000 per year. Did you know that number? Hands up if you did.

[00:22:57] David: Yes, because this is the first time in our lives that we’re actually both working.

[00:23:01] Ramit: Okay. So David says yes and Angela says no.

[00:23:05] Angela: No, no. In my head, it was 100,000.

[00:23:10] Ramit: Oh, then this should be great news. You’re making 18% more than you thought.

[00:23:14] Angela: Yes.

[00:23:14] Ramit: Do you feel better?

[00:23:16] Angela: Not really, because in David’s head, it was around 150.

[00:23:24] Ramit: What? David thought that you were making 150 together. Turns out it’s 118, so he’s depressed. Angela thought you were 100. Now you’re making 118. She has no affect change, no emotional change. Nobody feels good. What a beautiful example of Ramit’s principle.

[00:23:41] The way you feel about money is highly uncorrelated with the amount in your bank account. Round of applause for Ramit Sethi. Since no one else is giving it to me, I’ll take myself. I’m my own biggest fan. Damn. All right. So what do you think about 118k as a salary?

[00:23:59] Angela: I think it’s great. I do think it’s good.

[00:24:02] Ramit: David?

[00:24:03] David: I don’t think it’s that great.

[00:24:06] Ramit: Okay, so Angela says it’s good. David says, no. Let’s keep going down the numbers to make a little sense of it. All right. Fixed costs are at 55%. Now, normally if somebody’s on this show with a 55% fixed cost, I just start clapping. But we do need to recognize that you have no housing costs. If you did pay housing cost, that number would explode.

[00:24:28] Moving down, investments at 10%. Okay, we’re coming back to that because all of that 10%, which is $761 is going into cryptocurrency. All right. Savings are at 17%. That’s $1,300 a month going towards a joint savings account. And then finally, guilt free spending is at 17% or $1,312. Is that number true?

[00:24:51] David: That’s pretty accurate. Yeah.

[00:24:54] Ramit: Angela, do you agree?

[00:24:55] Angela: I would have no idea, honestly.

[00:24:57] Ramit: Oh, that’s revealing. Okay, so David, do you track the finances in the family?

[00:25:02] David: Short answer, no.

[00:25:04] Ramit: Oh, nobody tracks it. Then how are you certain that $1,312 is accurate?

[00:25:08] David: I can calculate it in my head. I know what I spend on average per day.

[00:25:12] Ramit: Hmm. I don’t believe the guilt free spending number because if you don’t track it, it’s wildly off. It’s usually wildly higher. So let’s stipulate that you’re probably spending, if I had to guess, maybe double that. What do you make of the numbers on the conscious spending plan?

[00:25:31] Angela: That we are spending way too much, not investing enough, obviously. And yeah, that’s the biggest thing.

[00:25:40] Ramit: David?

[00:25:41] David: Right now we have no way of physically paying for a house, for a mortgage, or for rent, or whatever it is that we decide to do.

[00:25:49] Ramit: I think that is correct. That’s probably the first thing I would flag, which is, we’re at 55% fixed costs now, which is admirable. That’s right in the pocket, right between 50 to 60%, which I love to see. But if you add housing costs, we’re talking 75, 85%. You essentially cannot do it. That’s the problem. But we have some other things that I would like to dive into on your fixed costs. Can we take a look?

[00:26:13] Angela: Mm-hmm.

[00:26:13] David: Yeah.

[00:26:14] Ramit: You have a daughter’s school, $1,050 per month? That’s significant. How do you feel about keeping her in that school? You feel like this is a must?

[00:26:22] Angela: Yes.

[00:26:23] Ramit: Great. All right. So you both are very resolute about that. Okay. And we have a car payment of 600 bucks a month. Is that one car?

[00:26:34] Angela: Mm-hmm. Yeah.

[00:26:35] Ramit: And includes gas?

[00:26:37] David: No.

[00:26:37] Ramit: Oh, where’s the gas?

[00:26:38] David: Not in there. So about $400 a month.

[00:26:42] Ramit: Why is it not in the CSP?

[00:26:44] David: Should be.

[00:26:45] Ramit: 400 bucks. Watch what happens to that fixed cost? 55% number. What happened?

[00:26:51] Angela: Mm-hmm.

[00:26:51] David: Went 5%

[00:26:52] Ramit: So already we’re at 60%, no housing costs. Now you turn me into interrogator Sethi. All right. Now I got to ask a few pointed questions. Are you down for me to do that?

[00:27:01] David: Please. Yeah.

[00:27:01] Angela: Yeah.

[00:27:01] Ramit: Okay. Where’s the retreats?

[00:27:04] Angela: I haven’t taken one, so it’s not there. The only retreat I’ve taken was in 2023.

[00:27:10] Ramit: Okay. Two years ago. How much was that retreat or retreats?

[00:27:14] Angela: For the retreat itself, it was, I believe, 2.5 million pesos, Colombian pesos.

[00:27:21] Ramit: Okay. And then transportation and all that stuff. Okay. Let me show you. Let’s just assume that it was $2,400. So let’s take a look at how this actually affects certain things. So let’s assume, for example, that we put it in fixed costs. Let’s just say fixed costs. I’m going to add $200 extra per month. Okay?

[00:27:42] Angela: Mm-hmm.

[00:27:43] Ramit: Watch what happens to your fixed costs. It jumps from 60 to 63%. So imagine how many other places in your finances that’s probably happening. 3% here, 5% there. It actually adds up to a lot with multiple thousands of dollars of added purchases. Do y’all see it?

[00:28:03] Angela: Yeah.

[00:28:04] Ramit: Okay, cool. I am going to leave that off of the CSP for now, although I think we have a discussion to have about this retreat, because where is the $300 a month coming from?

[00:28:16] Angela: Well, I haven’t signed up for it.

[00:28:18] Ramit: I don’t think that’s the point, Angela. I think the point is you told David you want to go to this. David, you said, “Okay, I don’t want her to be unhappy, so okay, we’ll put money aside.” Where’s the money coming from? Do you see how this is a different way of thinking about money than the way you’ve been thinking about it?

[00:28:36] Angela: Yeah.

[00:28:36] David: Yeah.

[00:28:37] Ramit: What is the difference?

[00:28:38] David: Be conscious of how we’re spending.

[00:28:41] Ramit: Yes. What else?

[00:28:42] Angela: We’re improvising everything. We don’t know anything. We’re just improvising.

[00:28:47] David: Yeah. We have to know how we’re allocating our money.

[00:28:50] Ramit: Yes, I agree with those. And I’ll also point out, I didn’t use the word feel once. My feelings are not really relevant sometimes. And I heard feelings a lot. Guys, I love feelings, but sometimes we need to run the [Bleep] numbers, and the feelings need to be not a part of this conversation. Numbers are numbers. Math is math. It’s black and white.

[00:29:09] We have a finite amount of money, and you have things that you claim you want to do. You want to keep your daughter in a certain school. You want to move, buy a house. Cool. We can talk about the possibilities, but we have to be very intellectually honest. We have to be like, “These are the numbers. What are we going to do with it?” All right. Moving back to the CSP. $761 a month, which is 100% of your investment money is going towards cryptocurrency.

[00:29:36] David: It’s been $761 for the past six, seven months. And that’s the totality of it, not investing 761 a month.

[00:29:46] Ramit: What do you mean? It says you’re investing $761 a month from the CSP.

[00:29:49] David: I guess filled that out incorrectly.

[00:29:53] Ramit: How much are you putting towards crypto?

[00:29:54] David: The last time that I put in was about a month ago when I put in 400.

[00:29:59] Ramit: Okay. And you have a total of $761 in crypto?

[00:30:03] David: Correct.

[00:30:04] Ramit: Out of curiosity, why put $400 towards crypto when you have $34,000 of debt

[00:30:09] David: To compound that money, I guess, is my thought. I see the vision behind it.

[00:30:15] Ramit: I think the word improvise is a good example. There’s no real method to how the money is being allocated. It’s just like, ah, I got a few extra 100 bucks. Let me throw it into crypto. There’s no thesis. There’s no plan. Where should the next $100 go?

[00:30:32] David: I agree.

[00:30:32] Ramit: Same thing with retreats. I want to go on a retreat. I don’t know about that. Ah, I’ll go on the retreat.

[00:30:37] Angela: Mm-hmm.

[00:30:38] Ramit: A lot of improvisation. The thing is, you can improvise for a while, but you can never improvise your way to a Rich Life. Nobody trips and falls, owns a house in Colorado with this household income and a five-year-old daughter. It doesn’t happen.

[Narration]

[00:30:53] Ramit: When you hear me critiquing Angela and David about their improvising, I’m referring to when improvisation makes sense. Like, if you save $10,000 for a trip, you’ve earned the right to improvise. “Hey, do we want to fly business class? Do we want to stay an extra couple of days?” That’s freedom. You earned that right.

[00:31:13] If your guilt-free spending is dialed in, improvise. “Hey, this weekend, should we go to dinner at our favorite Thai restaurant? Should we see a concert?” You earn that flexibility. But Angela and David don’t have even a basic financial structure. They’re basically improvising with no foundation. There’s a sophistication to really improvising, but it requires a mastery of the basics first.

[00:31:37] Like a jazz saxophonist can improvise, but first they have to understand how jazz music works. With money, you need to understand the foundational stuff first. Know your numbers. Align your goals. Stick to a system. Now let’s see if we can get Angela and David and their CSP on a solid path.

[Interview]

[00:31:57] Ramit: Your joint savings is at 4,200 bucks, so about one month’s worth of savings. It’s pretty low for a couple with a daughter. Pretty risky. And then to talk about the income here, who’s the person earning $6,822 a month gross?

[00:32:11] David: I am.

[00:32:12] Ramit: That’s David. Angela, you’re making 3,032 gross, or 2,000 net per month.

[00:32:17] Angela: Mm-hmm.

[00:32:18] Ramit: What do you think about that income?

[00:32:19] Angela: I want to make more.

[00:32:21] Ramit: Can you?

[00:32:23] Angela: Yes, absolutely.

[00:32:24] Ramit: How?

[00:32:25] Angela: Instead of focusing on the insurance clients, I would have to start taking private clients. That’s the biggest thing.

[00:32:32] Ramit: All right, fine. Now David, back to the crypto. You currently have $761 in there, but you mentioned previously you had six figures of crypto. What do you think about the decisions you made with that six figures of crypto?

[00:32:45] David: I don’t like that we’re in this position, but I don’t regret it because it’s allowed me to see a greater perspective.

[00:32:52] Ramit: Which perspective?

[00:32:53] David: I can see where I went wrong and what I need to do differently now.

[00:32:58] Ramit: So what’s different?

[00:32:59] David: We’re actually working and creating income. We’re not relying on my mother. For the entirety of last year, my mother was paying all of our expenses. For the first time we’re actually providing for ourselves.

[00:33:11] Ramit: Okay, what are you doing differently now? Tell me.

[00:33:14] David: We’re not going out to eat four times a week.

[00:33:17] Ramit: How often are you going out to eat?

[00:33:18] David: Once. That’s not true, because together, probably once a week. I still get lunch almost every day at work.

[00:33:27] Ramit: So five times a week you’re eating out, at least, plus one time. Angela, how many times are you eating out?

[00:33:34] Angela: The highest would probably be four.

[00:33:36] Ramit: Four times a week for you. Five times a week for David. That’s nine plus one joint. 10. And what about your daughter?

[00:33:41] David: Once every two weeks.

[00:33:43] Ramit: Okay, we’ll count that as once a week just for simplicity. So that’s 11 times a week. It went from, what was it, one or two times a week to 11 times a week. In what other ways are you lying to yourselves right now? Because I appreciate, David, that you just caught yourself in that self-lie, and we corrected that. That’s awesome. I want to figure out what other parts of your life you are not telling yourselves the truth.

[00:34:03] A lot of people, they don’t tell themselves the truth about what they claim they want versus where they actually spend. They don’t tell themselves the truth about how they want something, but they don’t actually make a plan for it. They definitely don’t tell themselves the truth about their savings amount, like, do we actually have enough savings right now for our family?

[00:34:23] Are we investing enough to be okay in the future? They don’t tell themselves the truth about that because they don’t pay attention to it. And then the biggest lie of all is eating out, which we’ve already addressed.

[00:34:31] David: Yeah, I guess we’re being dishonest with how we’re allocating our money. Our vision is not aligned to our actions.

[00:34:37] Ramit: Angela, you agree?

[00:34:39] Angela: Yeah, absolutely. I think that’s the biggest thing. There’s no coherence between what we say we want and what we’re actually doing.

[00:34:46] Ramit: And what about you specifically, Angela? In what ways do you think you might not be telling the truth about spending?

[00:34:52] Angela: I think the biggest one is definitely the classes, the conferences, because I will always say, I’m only going to do this one, and then there’s always going to be another one that’s going to come up that’s going to feel like it’s the one that I want to take.

[00:35:08] Ramit: You tell yourself, “I need to take this class, this conference, and it’s going to be the last one I take.” But it’s never the last one.

[00:35:17] Angela: Yes.

[00:35:18] Ramit: How much do you think you’ve spent in the last five years on classes, conferences, courses, events?

[00:35:24] Angela: I think it’s like 15,000.

[00:35:27] Ramit: And what have they gotten you?

[00:35:29] Angela: I don’t know. I feel like I have gotten new skills, but I’m not actually using them.

[Narration]

[00:35:36] Ramit: Angela just admitted she spent $15,000 and has nothing to show for it. And that’s money that could have contributed to a down payment, or investing, or helping David’s mom. Instead, it disappeared into another round of investing in herself, retreats, conferences, endless workshops, none of which actually resulted in anything measurable.

[00:35:59] This is a pattern, and it’s not unique to her. Angela and David are classic dreamers. They may be smart, they may be well-intentioned, they may have a lot of ideas, but ultimately, what do they have to show for? Angela keeps chasing clarity, but every dollar spent, every weekend reset, just pushes the goalpost further away.

[00:36:20] It is expensive procrastination disguised as self-development. And I say that as someone who teaches self-development. There’s a time and a place where you should think about joining programs and courses. I offer them myself. But there’s a time where you look and you say, “I can’t afford this.”

[00:36:37] David, meanwhile, is telling me what he thinks I want to hear. “Oh, we eat out once or twice a week,” he says. It’s actually 11 times. Dreamers are forever optimistic, but they will almost never look at real numbers, and that is the cost of being a dreamer. Time slips by. Nothing really changes. Angela and David still haven’t created a Rich Life vision. They’re not even looking at the numbers, quite honestly.

[00:36:59] So if you have been investing in yourself, but your finances haven’t changed, maybe it’s time to get honest about your numbers. After this break, we’re going to go deeper into where Angela and David’s money is actually going and what needs to change if they want an honestly different outcome.

[Interview]

[00:37:17] Ramit: I want to understand a couple more things about your spending– the debt. We have $34,632 of debt. Can you break that number down for me?

[00:37:26] David: It is just the car.

[00:37:27] Ramit: That’s it?

[00:37:28] David: Yeah.

[00:37:29] Ramit: Oh. What kind of car?

[00:37:31] David: Subaru Crosstrek.

[00:37:33] Ramit: How much did the car cost total?

[00:37:34] David: 35.6 was with the warranty.

[00:37:38] Ramit: Can I ask you guys a question? When are you planning to get a new car?

[00:37:42] David: Not for a long time.

[00:37:43] Ramit: Okay, great. Thank God.

[00:37:44] David: 10 years.

[00:37:46] Ramit: 10? That’s not a long time. 10 [Bleep] years? That’s right when you start to get the savings. Pay that thing off, ride it into the ground. 10 years is great. This is just my own personal opinion. A lot of people are going to get mad at me because freaks in America love to talk about your godforsaken cars. Every additional year you hold your car with no car payment is like the golden era.

[00:38:06] It’s literally just, essentially, driving it for close to free. And you take all that money you would’ve put, like 5, 6, 700 bucks a month into some freaking payment and bank it. Oh, I wish more Americans got a big old [Bleep] for the golden era, but they don’t. They go ho, ho, the upholstery. There’s a hole in it. We need a new [Bleep] car. No, you don’t.

[00:38:29] You need to put $700 a month into your investments or even guilt-free spending a little bit. The other thing I want to understand is your guilt-free spending, which whatever the number is, that’s higher than on this CSP. What are y’all spending money on? Do you track it, anybody?

[00:38:43] Angela: So I start the month with the intention of tracking it, but I just forget and don’t do it.

[00:38:50] Ramit: Okay, where do you spend your money? Is it on a credit card?

[00:38:54] David: No.

[00:38:55] Ramit: What the [Bleep]? Where do you spend your money? How?

[00:38:58] David: With a debit card?

[00:38:59] Ramit: Why debit?

[00:39:01] David: Because with what we went through last year with how we overuse credit cards, I don’t want to rely on them as much. I want to restructure my thinking. I want to make sure that I actually have that money to pay them off and to pay off the balance at the end of the month. And that I’m not just racking up money and debt.

[00:39:19] Ramit: Okay. That’s a pretty good answer. It’s like, hey, I don’t trust myself right now. I want to build the skills of using a debit card, making sure. You’re basically using training wheels. I respect that. The problem is you don’t know how much you’re spending. You’re wildly off. It’s off by 500, 800, $1,000 a month. So where’s the skill coming from?

[00:39:40] David: Developing it.

[00:39:41] Ramit: No, you’re not. You’re lying to yourself. And I don’t mind you lie to me. People lie to me every day on this podcast. But you’re lying to yourself. You’re not developing the skill. Just using a debit card, but not knowing where the money’s going is not developing a skill. You actually have to track it for a month. You have to be talking about your spending.

[00:39:59] Most importantly, it’s not just tracking it. That’s just a budget. That’s pointless. It’s actually deciding, this is how much money we have in guilt-free spending. How do we want to allocate that? We want to eat out once a week? Great. This is how much we’re going to spend when we eat out, and you are going to be in charge of that number. That’s how you manage a number.

[00:40:17] David: Okay.

[00:40:18] Ramit: You’ve been in debt multiple times. What makes this time different?

[00:40:23] David: The impact that it had on our lives. Leaving the country, going to Columbia last year wasn’t just to be with our family. It was to escape the reality of this rat race and work and bills. I needed to step aside for a month or two to recalibrate and to actually develop a plan. So that’s when we started talking about moving back here, where I would start working, saving. That’s what got us to that point.

[00:40:48] Ramit: Do you agree with that, Angela?

[00:40:50] Angela: Yeah. For me, what’s different is just our daughter is the biggest thing, honestly. Before she was little, it didn’t really even feel like she was part of the conversation or like she was picking up on things or anything like that. But she’s obviously at a point where not only she’s extra aware of every conversation. She’s extra aware of our behaviors and how we use money, how we view it, what we do with it.

[00:41:17] Ramit: What does she notice about the two of you with money?

[00:41:20] Angela: I think what she’s seen so far is the lack of awareness. I don’t know obviously how much or how a 5-year-old is perceiving things, but yeah, I think definitely notices me stressed about it. There’s been moments where whatever reason she says she wants something and then she asked like, “Oh. Why? Because we don’t have money,” or stuff like that. It’s not something she says consistently, but she has said it.

[00:41:46] David: But I think that’s also influenced by my mother.

[00:41:48] Angela: Yeah.

[00:41:49] David: Being around her.

[00:41:50] Angela: For sure.

[00:41:51] Ramit: What does your mom say?

[00:41:52] David: My mother has a very limited perspective around money. My dad passed in 2016. I grew up in a very secure, stable, financially-abundant households. Both of my parents worked. Both of them did very well. I always had everything that I wanted.

[00:42:08] And I never really heard any negative conversation around money, but since he passed, it’s just been her, and she’s supported us so much to the point where she’s put herself in a financially difficult position.

[00:42:20] Ramit: What do you mean by that?

[00:42:21] David: That she’s racked up $90,000 of credit card debt. She’s taken out a second mortgage on her home.

[00:42:28] Ramit: What the [Bleep]?

[00:42:29] David: And I don’t know if that’s entirely just because of us. My brother probably has some sort of influence on that, but also her perspective around money has a lot to do with that.

[00:42:39] Ramit: Let me understand this correctly. David, you grew up financially secure. Sounds like your family had money.

[00:42:45] David: Yeah.

[00:42:46] Ramit: You didn’t want for anything. They were supportive of you. Did they ever say anything about money when you were young? Any phrases you remember them saying?

[00:42:55] David: They never really talked about it.

[00:42:56] Ramit: So were your parents both working? Were they both professionals?

[00:43:00] David: They were, yeah. My mother, registered nurse, and my father was in engineering.

[00:43:04] Ramit: Okay. And then when your dad passed away, how did that affect your mom financially speaking?

[00:43:10] David: Started overspending, but the thing is she’s always overspent. And I think a lot of it has to do with how she grew up. She grew up with no money, with sharing one can of tuna fish between her and her five siblings, going days without food, having to go to work as a teenager to provide for her young brothers and sisters.

[00:43:29] Ramit: So do you think that your dad had an impact on her behavior?

[00:43:33] David: Absolutely.

[00:43:34] Ramit: How would you describe what role he played financially speaking relative to your mom?

[00:43:39] David: He was a grounding force. He was stable.

[00:43:43] Ramit: He was stable because without him she would, what?

[00:43:46] David: She’d go out and spend chaotically.

[00:43:49] Ramit: Okay. All right. So when your dad passed away, is that indeed what happened with your mom? What did she end up spending on?

[00:43:57] David: One of the first things that he gave to me was $25,000. I was still in school for engineering. I was moving out that summer, and she gave me $25,000. I said that I want to start investing. So I started investing in the stock market. I started researching. And a lot of that money was for a year of living.

[00:44:17] It was for rent. It was for food. And then about six months after, the following year, we both went out and we got brand new vehicles. That’s when she got the Jeep. She bought it. It’s $31,000. And then I was walking around later that afternoon in the parking lot looking at a Jeep Wrangler. It was my dream vehicle for 10 years. She bought it. So she spent collectively that day, over $60,000.

[00:44:44] Ramit: Did you know if she had the money to be able to do that or not?

[00:44:48] David: She did. I knew she had the money.

[00:44:50] Ramit: You knew that your dad had left her financially secure and she herself was also financially secure?

[00:44:55] David: Yeah.

[00:44:55] Ramit: All right. So she spent 60 grand in a day. Okay. If she can afford it, great. What happened to bring her into $90,000 of credit card debt?

[00:45:03] David: Supporting us for years. Long story short, Angela was deported from the country in 2018, and I had left everything here. I’d moved there while we had both gone through the immigration process. We were together there for almost three years. Our daughter was born there, and throughout those years, she supported us.

[00:45:23] Ramit: Hold on. She supported you while you were in Columbia.

[00:45:26] David: Yes.

[00:45:27] Ramit: Because you couldn’t work.

[00:45:28] David: I was teaching English, but it wasn’t enough for our living expenses.

[00:45:33] Ramit: And Angela, what about you at that time?

[00:45:35] Angela: I had just graduated law school, and I worked for a little bit, and then had an issue with the person I was working with and didn’t work anymore. And so we were both at home.

[00:45:47] Ramit: Hold on. This is very fascinating. So Angela, you have a law degree?

[00:45:52] Angela: In Columbia, yes.

[00:45:53] Ramit: In Columbia. And does that transfer at all to the United States or no.

[00:45:56] Angela: I would have to basically go to school all over again pretty much.

[00:46:01] Ramit: All right. And then David, you have an engineering degree.

[00:46:04] David: Yeah, a mechanical engineering degree.

[00:46:06] Ramit: Okay. I did not expect this. All right. It’s quite interesting, don’t you think?

[00:46:12] David: No, I don’t.

[00:46:14] Ramit: You don’t think it’s interesting to have a mechanical engineering degree and be living with your mom who is now in $90,000 of credit card debt from supporting you?

[00:46:22] David: I can make more in car sales, which starting off in engineering, I was 55, $60,000.

[00:46:30] Ramit: What about if you had stayed with it. What would you be making now?

[00:46:33] David: Maybe 90,000.

[00:46:35] Ramit: All right. You know your career better than I do, so I respect that. I’ll tell you why I’m surprised. Here I am talking to a couple that has been in waves of debt, does not pay rent. I just found out your mom is in serious financial trouble. Especially as an older person with that amount of debt, it’s like very difficult. There’s no easy answers for that. Then I find out I have a lawyer and a mechanical engineer at least trained that I’m speaking to. So I’m like quite taken aback.

[00:47:06] David: it’s not that I didn’t try to find a work in mechanical engineering, but being out of it for three years, I came back and it seemed like all I could get was sales positions.

[00:47:14] Ramit: Yeah. Angela, can you tell me about your childhood? What do you remember your family seeing about money when you were young?

[00:47:22] Angela: It was very different than David’s. My mom was always the one providing for us financially. My dad worked, but up to this point, I don’t know what he does with his money. I have no idea where it goes. We never knew where the money went. So my mom is a dentist, and she had to step up. We also had a lot of support from my grandmother who we lived with her for a long time because my dad was always in trouble.

[00:47:52] He got them in a lot of trouble. And we had to move in with my grandparents. One of the things that I remember is like my mom getting really upset because she wanted to specialize when she was graduated and whatever. And my grandmother said something to her about like, “How are you going to do that? You’re poor.”

[00:48:15] And my mom freaked out, and she was like, “Don’t call me that. I’m not poor.” I don’t remember hearing much from my mom or my dad. It was more like seeing the arguments and my mom freaking out on him for taking stuff from us, his kids, to get money.

[00:48:32] And I remember being in second grade and getting fold out of the classroom because he was not paying for school. So yeah, there’s not a lot of words that I remember, just that kind of scene basically.

[00:48:47] Ramit: How do you feel about money today?

[00:48:48] Angela: Stress, very stressed.

[00:48:52] Ramit: Do you like money?

[00:48:54] Angela: I say I do, but I don’t think I’m being genuine when I say I do.

[00:48:58] Ramit: As both of you reflect back on your childhood with money, I’m curious, what patterns do you notice about how you were raised with money that you may now be re-experiencing?

[00:49:10] Angela: The lack of awareness. My dad would always– I don’t know how to describe it, but basically we went on a trip, for example, and he was supposed to have the money for the amount of days that we were staying there. And then three days into the trip he’s like, “Okay, we ran out of money.”

[00:49:28] And my mom was like, “What do you mean we ran out of money? We have two more days, and we have three children here. What does that even mean?” He was like, “Yeah, we already used it all, “or something like that. So my grandmother had to come back to the rescue, so to speak, and help us and pay for the two days that were left. So that pattern of having someone else, in this case, it has been David’s mom rescuing us, so to speak.

[00:49:57] Ramit: Grandmother rescued you. Now your mother-in-law has  rescued you.

[00:50:00] Angela: Mm-hmm.

[00:50:01] Ramit: When David invested in crypto, do you understand what it is?

[00:50:03] Angela: No.

[00:50:06] Ramit: Did your mom understand what your dad was doing with the money?

[00:50:09] Angela: No.

[00:50:09] Ramit: Hmm.

[00:50:10] Angela: No. Definitely not.

[00:50:12] Ramit: The fact that you got pulled out of school in second grade because your dad didn’t pay, what if you were to have to not send your daughter to private school? How would that feel to you?

[00:50:21] Angela: I hate even thinking about it. It feels like the biggest failure to me. It stresses me out. It gives me anxiety. It makes me feel like I’m not a good enough mom because I’m not providing her with what I feel is best for her.

[00:50:38] Ramit: Do you see the connection there at all?

[00:50:39] Angela: Mm-hmm.

[00:50:41] Ramit: Is it upsetting to think about how you were raised with money?

[00:50:46] Angela: Yes.

[00:50:47] Ramit: What is upsetting you?

[00:50:49] Angela: The way I learned to view money is upsetting to me. I learned that it is something stressful. My mom always tried to make it seem– like she’s a very positive person and she tries to always make everything seem fine. And then she would be smoking a cigarette because she was so stressed out that she didn’t know what to do with herself.

[00:51:11] Ramit: When you talk to your daughter about money, what do you tell her?

[00:51:13] Angela: That it’s abundant and that there is always more money to be made.

[00:51:18] Ramit: You are crying talking about money, but she’s not in the room. Is she?

[00:51:24] Angela: No.

[00:51:27] Ramit: Like mother, like daughter. I see it all the time.

[Narration]

[00:51:30] Ramit: One of the most revealing parts of this podcast is hearing someone’s full financial history. Not just their numbers, but how they built their relationship with money. Angela and David are what I call dreamers, and I write about this in my new book, Money for Couples. Dreamers believe that something like a new gig, a big break, the universe is going to magically solve their problems.

[00:51:53] But dreamers can only afford to think this way because they are almost always supported by someone else. And that’s exactly what we find here. Angela’s grandmother stepped in when her dad blew up the family finances. And now David’s mom has been bankrolling their lifestyle for years.

[00:52:10] At some point, the free ride ends. With dreamers, I got to tell you, lecturing them does not work. Begging does not work. Crying doesn’t work. None of it works. The only way to even have a chance at changing a dreamer’s mentality is to stop covering for them and let them face real consequences. Do you think that they would be willing to face actual consequences? Well, we’re going to get into that right after the break.

[Interview]

[00:52:38] Ramit: Just because you had a model with money that was confusing messages– we’re going to be okay, but actually you’re getting pulled out of school. We’re fine. It’s great. But your mom is smoking a cigarette out of stress. That doesn’t mean that is you. Doesn’t mean you’re predestined for that. But it does mean that that was the model you saw growing up.

[00:52:57] And in so many ways, we just went through, what, five? There’s probably 10 more. You are either recreating or allowing some of the same things that happened to be recreated, and it’s upsetting. I think that’s part of the reason most of us don’t think about the connections with money.

[00:53:13] To us, money is, I want to eat out. I want to go on a retreat. Where is this credit card bill from? That’s the extent of how we think about money. It’s literally what’s in front of us. And what I try to do when I speak to you is to zoom out. Sometimes zoom out so much that we’re looking at your entire life. Your future is not written for you, but you have to acknowledge where you came from. Then you have to decide if you want to keep operating on those same principles. Do you?

[00:53:42] Angela: No.

[00:53:43] David: No.

[00:53:43] Ramit: I believe you. I think we can change some of those. David, in what ways are you recreating or allowing the messages that you grew up with to recreate today’s relationship with money?

[00:53:53] David: It’s funny, as you were talking, actually, I saw myself as Angela’s mother in that role, in the way that I would self-soothe myself. I would tell her at some points that everything was fine. I would mask what I was feeling.

[00:54:07] Ramit: What role did your dad play with your mom?

[00:54:10] David: He was the grinding force.

[00:54:12] Ramit: The grounder. Because if I don’t ground her, if I don’t catch her, like a helium balloon she’s going to spin off into the horizon and just sprinkle money across the earth. Basically, that’s how a lot of men think. Would you agree?

[00:54:26] David: Yeah, to a degree. Yeah.

[00:54:28] Ramit: What is the opposite of grounding?

[00:54:30] David: Ungrounded.

[00:54:31] Ramit: Yeah, ungrounded. Floats away.

[00:54:33] David: In the clouds.

[00:54:34] Ramit: Exactly. If you approach your financial relationship, your intimate relationship by saying, my job is to ground her, you have already set yourself up for not great partnership life together because you will always be fighting.

[00:54:50] That’s why when Angela comes to you with this idea of like, I want to go to a retreat, which you may or may not be able to afford, David, your job as you see it, is to first question her. Why would you do that? What about the last one, etc.? And you try to ground her, “Oh, don’t fly off into the clouds and go to yet another conference.”

[00:55:07] But then you actually do not have the vocabulary or the partnership or the shared knowledge to say, “Look, this isn’t about you or me, or what I want. This is about our plan together as a family.” You don’t have that. And so you end up often either squashing the dream or more commonly just being like, “All right. Fine. We’ll figure it out later.”

[00:55:27] The problem is not the retreat; the problem is the roles that you set years ago. And Angela, you are allowing yourself to be put into this parent-child dynamic. “Please, can I go? I want to go.” It’s not healthy. What would it look like in a healthy dynamic with money?

[00:55:41] Angela: For one, I would actually know what our finances look like. I’ve always told myself the story that I can’t stand numbers. So I’ve stepped into that, of, I don’t want to deal with it, and you tell me if we can or not, basically. So a healthy way of doing it would be, I would be aware of it. I would know. And we would make the decision together based on both of us knowing where we’re at and where we’re going.

[00:56:08] Ramit: Great. I agree. David, what would a healthy dynamic with money look like?

[00:56:11] David: I like numbers. I guess that’s why I went for engineering. I really want to know, down to the specifics, how we’re allocating the money. I want to be able to actually set aside a certain amount of money per month, let’s say if it’s for groceries, and actually use that set amount of money for groceries

[00:56:29] Ramit: Great, love it. You both said you want to buy a house within a year. How much is it going to cost?

[00:56:35] David: We’ve actually revisited the idea of renting in Colorado.

[00:56:39] Ramit: All right, so how much are you going to pay for rent?

[00:56:41] David: Gosh, it’s most likely 2,500, is what the average is going to be.

[00:56:46] Ramit: 2,500. What is that? A two-bedroom?

[00:56:49] David: Two, three-bedroom. Yes.

[00:56:50] Angela: Yeah.

[00:56:51] Ramit: All right. How do make a decision on what type of place you would get to rent in Colorado?

[00:56:57] David: In the past, it’s been, well, we need something a little bigger because family is coming from Massachusetts.

[00:57:02] Angela: That’s his perspective though. For me, mostly it’s about having a safe space. If it’s in a good area that feels safe, I don’t really care.

[00:57:13] Ramit: Hold on. Sorry, I’m looking. Is there anyone in this room who uses numbers when they decide on the biggest rental expense of their life? Anybody?

[00:57:23] David: We’re aware of that now.

[00:57:25] Ramit: How much can you afford on housing?

[00:57:27] David: I don’t even know if– I do not know.

[00:57:31] Ramit: Listen, I’m not giving up on you two. I’m down to help you learn how to treat money differently. I’m happy to hear that you are not married to the idea of having to buy a house because candidly, you can’t afford it. It would put you in an extremely precarious financial situation.

[00:57:50] So the fact that you have both talked about it and are open to renting is outstanding. That’s a really promising sign for me. I think that the way that you have both treated money is both of you have functioned as dreamers. Meaning, you don’t track numbers. It’s always about the next gig, the next deal. If we just get this one thing, if we declare bankruptcy, we’ll be fine.

[00:58:10] And you did that only because you were subsidized by somebody else, mom. But we have two problems. First of all, mom cannot subsidize you anymore. She’s told you it’s time to get out. And second of all, you’ve put mom in a serious financially-compromised position at her age. Not okay.

[00:58:29] So in my opinion, you have major, major changes to make. And if you do, I think there’s a possibility that you could do quite well. If you do the half route, let’s do a little bit of this and a little bit of that, you are [Bleep]. So you tell me. What do you think? Do you want to make major changes or minor changes? Because I’m interested in major only.

[00:58:49] David: Yeah, major changes.

[00:58:51] Angela: I agree.

[00:58:52] Ramit: All right. Let’s take a look at your CSP, and I would like to figure out what to do about your actual numbers. So I want to simulate what happens when you move out because it’s coming. And if you were to move out today, how much would you pay for rent?

[00:59:06] Angela: Around 2,500.

[00:59:08] Ramit: 2,500. Watch this number go from 53%. What did it just change to?

[00:59:13] David: 86.

[00:59:13] Ramit: 86. You’re broke. That’s it. It’s over. Game over. And you have a five or a 6-year-old daughter. So that doesn’t work. But we’re going to zero that out and we’re going to start getting real with your finances. The goal here is to create a future where you can sustainably have a nice life without random lottery winnings and some huge bonus.

[00:59:40] We’re not ever depending on that, ever. We build a life where we have a normal month to month, it’s consistent, and that allows us to succeed. So before we jump into the numbers, how do you both want to show up in this conversation?

[00:59:53] Angela: I want to show up with curiosity about how can I be better? What can I do differently? I want to show up being the responsible adult and mother that I am and want to be for myself and for my daughters.

[01:00:08] Ramit: Great. Love that. Awesome. David.

[01:00:10] David: I want to have a heightened state of awareness around money. I want to have clarity. I want to know how we’re using our money. I want consistency.

[01:00:17] Ramit: All right. Let’s do it. Your goal is to get your fixed costs to roughly 60% with housing built in. How do you want to do it?

[01:00:28] David: What I have in mind is, one of our incomes goes towards paying expenses and the other income goes towards paying off the car. And maybe exploring the idea of not necessarily a public school system, but something that is aligned to all of us.

[01:00:44] Ramit: Okay, I need numbers.

[01:00:46] David: So reducing the daughter’s school expense.

[01:00:50] Ramit: To what?

[01:00:51] David: Ideally, I would love it to be zero.

[01:00:53] Ramit: Angela?

[01:00:54] Angela: It would be negotiable if we could find a charter school that felt good.

[01:01:01] Ramit: Wait, charter school costs how much?

[01:01:03] Angela: Nothing.

[01:01:05] Ramit: All right.

[01:01:05] Angela: Because it works as a public school.

[01:01:08] Ramit: All right. $0 for the school. Okay, cool. We got agreement on that. Great. We’re down to 39% on fixed costs. That’s great. Oops, we forgot something. Housing. I’m changing daughter’s school to housing. How much are you going to pay for housing?

[01:01:22] David: 25.

[01:01:23] Ramit: 2,500. All right.

[01:01:25] David: I have the number 15 to 1,800 in mind, but there’s–

[01:01:29] Angela: And it is doable.

[01:01:31] David: It is? Like with what? An apartment?

[01:01:33] Angela: Yes.

[01:01:34] David: Okay. Then I’m open to that.

[01:01:37] Ramit: Let me just understand, did we go from a 2,500-dollar three-bedroom house rental to a 1,500-dollar two-bedroom apartment rental?

[01:01:46] David: Yes. I’m open to it. Like I said, I’m open to major decisions and changes in our lifestyle.

[01:01:52] Ramit: Great. Angela, are you open to that?

[01:01:54] Angela: Yes, absolutely.

[01:01:54] Ramit: Wow. And are there indeed in the place that you would go live in two-bedroom apartments for 1,500 that you would find acceptable?

[01:02:02] Angela: I don’t know that’s 1,500, but definitely within the 1,800 range. Yes.

[01:02:06] Ramit: Let’s put 1,800.

[01:02:07] Angela: Yeah.

[01:02:08] Ramit: Guys, this is pretty [Bleep] big. That’s actually quite amazing. I want to take a second to acknowledge this. In America, people hate the things that poor people do. They hate them. That’s why they don’t just say, “Oh, I don’t want to take the bus.” They say, “Ew, public bus. Ew.” They also often talk about living in apartments like that. They don’t just say, “Ooh, I’m not sure I prefer an apartment.” They say, “Ugh, disgusting. I don’t want to hear my neighbors.”

[01:02:38] They don’t even realize that they are doing it, and they certainly do not realize why. But in America, we are taught to hate what the poor do. Now, many people who live in apartments live there because they have to, but they also, in certain cities like New York, they live there because that is what is available and that is what they choose to live in. You get better amenities, etc.

[01:02:57] I love that you are flexible enough to say, “Hey, we have a daughter. We can live in an apartment.” Freaking billions of people across the world live in apartments. Perfectly fine. In Colorado, great. So I applaud the fact that you are flexible on what is probably your biggest expense per month. Outstanding. Let’s put it in. Let’s see what happens

[01:03:18] So at $2,500, you’re at 72% fixed costs. At 1,800, you’re at 63%. It’s a massive difference, massive. Utilities are at zero. That’s not going to be the case. I don’t know what they’re going to be in Colorado. Does anybody know?

[01:03:33] David: Probably 400 a month is what they average.

[01:03:36] Ramit: Oops. You’re at 68% now. Okay, it’s getting pretty high. Insurance at 378.

[01:03:42] David: I don’t actually know what it costs.

[01:03:44] Ramit: Let’s leave it as it is now.

[01:03:46] David: Okay.

[01:03:46] Ramit: Car payment, still at 998? Are you going to be driving as much?

[01:03:50] David: Yeah.

[01:03:51] Angela: Probably a little less driving if we move to the city where we want to be.

[01:03:56] Ramit: Let’s say 300. We’ll drop it down a bit. All right. We’ll drop the gas down to 300, from 400. All right, we’re at 67%. Debt payments, you’re currently paying $262 a month. That’s for the car, right?

[01:04:06] David: No. So September is the last of that 262.

[01:04:09] Ramit: All right. Fine. So let’s adjust that. So 262 is going to become zero. That’s good. We’re down to 63%. Clothes at $120 a month. I don’t think so. I’m putting 20 bucks a month on clothes, and that’s it. Cool.

[01:04:22] Angela: Yeah.

[01:04:23] Ramit: $87 a month on phone. That’s fine. Subscriptions at 250. Not in this world. No [Bleep] way. Tell me.

[01:04:31] Angela: I would love to have it at 100, if possible.

[01:04:35] David: Yeah, I would agree.

[01:04:37] Ramit: 100. All right. Fine. I’ll do that. What’s this insurance for, $378?

[01:04:42] David: Health insurance.

[01:04:43] Ramit: Okay, fine. So watch this. I’m dropping your subscriptions down from 250 to 100 bucks. You’re down at exactly 60%. Wow. That’s interesting. That’s pretty cool. Before we move on, how do you feel about your fixed costs?

[01:04:56] David: I feel good about it. I think we could even actually reduce groceries a little bit.

[01:05:01] Ramit: They’re at 800. Who does the grocery shopping?

[01:05:04] David: I do.

[01:05:04] Ramit: Ooh. I love hearing from a grocery shopper who says that they can cut their spending. I [Bleep] love it. How much you think you can cut it down?

[01:05:14] David: Probably 15%, I’d say.

[01:05:16] Ramit: You’re telling me you can cut $100 a month off of groceries.

[01:05:19] David: Yeah, I really think I can.

[01:05:21] Ramit: All right. I love that. I believe you. I’m going to put it up there. And the $100 actually goes a long ways. So groceries go from 800 to 700. We’re down to 58%, guys. That’s outstanding. That is really good. Now I want to offer you a caution. This $1,800 a month on housing, this is it. That is the absolute uppermost boundary.

[01:05:43] In fact, you probably need to have your number lower than that. Your rent actually probably needs to be 1,600 in order to hit that 1,800 number. Because there will be other phantom expenses when it comes to renting. I’m teaching you a way to think now, which is not to take this number and make it a minimum. No, it’s actually take that number and go 10, 15% lower because you will have unexpected expenses. Okay?

[01:06:13] Angela: Mm-hmm.

[01:06:14] Ramit: Totally radically different way to think about it. There are two ways you can account for that. One is you can take each expense, the ones where you have a choice, and you can just go lower. If I were you, I would only look for apartments that are 1,600 a month, even though your number here is 1,800.

[01:06:30] The next way that we do it in the CSP is often we will include 10 to 15% of miscellaneous spend under fixed costs. That accounts for things that you forget. So you can do it either way. I prefer the one-time, 10 to 15% miscellaneous costs. And then if you are in debt or financial trouble, you really pay attention to the miscellaneous because you don’t want 10 to 15%. You want like maybe 100 bucks a month of unexpected fixed costs.

[01:06:58] Let’s move on to investments. First of all, why the [Bleep] are you investing in crypto? That makes no sense at all. You have no investments. No diversification, no portfolio, no nothing. It makes no sense. If you want to invest in crypto after you have a well-diversified portfolio and you’re like, “Hey, I want to put 5% of my money in some fun stuff, crypto, a friend’s bar, whatever, I don’t care.” Be my guest.

[01:07:21] But most people who I talk to who are in crypto, they laugh at diversification. They go, “Why would I diversify when I can make so much more [Bleep] money investing in Bitcoin?” It works until it doesn’t. And that is why diversification is so important. There’s so many people have lost so much money. We want stable growth for the next 50 years, and it will turn into more money than you can possibly imagine.

[01:07:42] So let’s go on over here. You’re in your 30s. Let’s put 800 bucks. That’s a fine place to start. You can increase it later. Savings are at 17%. That’s 1,300 bucks a month. I can see you guys just started doing that. I’m fine with that. And then guilt-free spending is 14% or $1,020 a month. That’s high.

[Narration]

[01:08:03] Ramit: One of the simplest and most powerful fixes for couples like Angela and David is to put structure around their guilt-free spending. The fix can be really simple. Four buckets. One for Angela, one for David, one for the relationship, and one for the family. Here’s why this matters. Angela needs clear boundaries. If she has her own spending bucket, she knows exactly how much she can use for retreats, courses, whatever she wants. There’s no debates, no guilt. And David gets the same thing.

[01:08:32] The shared bucket covers the things they want to do together, and the family bucket makes sure that their daughter’s needs get addressed. Suddenly, instead of arguing over every dollar, they’re actually created a system that makes spending boring. People who live in chaos often hate boring.

[01:08:52] The truth is many people would rather be chaotic and poor than wealthy and boring. That’s up to them. I can’t change that viewpoint. Listen as I encourage David to consider taking accountability for the burden that his mom has taken on to help support his family.

[Interview]

[01:09:09] Ramit: The fact that your mom is in serious financial trouble is a big, big problem. David, have you thought at all about what is to become of her financially speaking?

[01:09:19] David: Talked to her many times, and I’ve tried to explore options with her, but she doesn’t want to address it. Her course of action is just paying it off. So in her mind, on paper, she’s always working it out. In the next two years, she’s going to have all those credit cards paid off.

[01:09:37] Ramit: She’s going to have $90,000 of credit cards paid off in two years?

[01:09:40] David: It’s probably closer to 70. But her numbers are always varying. I don’t know the actual number.

[01:09:46] Ramit: Wow. That sounds very familiar.

[01:09:48] David: I know.

[01:09:49] Ramit: Like mother like son. Always giving ranges. Slightly evasive. Not quite sure what the actual answer is. David, do you see this pattern?

[01:10:00] David: Yeah, I’m aware of the pattern.

[01:10:02] Ramit: So you don’t really know how much she has. Maybe it’s 70k. Who can pay off 70k in two years? What’s her income?

[01:10:08] David: She was retired and then she went back to work as a registered nurse to manage this debt. She can earn up to 80,000. 90,000 with everything.

[01:10:19] Ramit: She owns her house?

[01:10:21] David: Yeah, she owns the house.

[01:10:22] Ramit: Because she has helped you so much, if I were in your position, I would be proactively saying, “You’ve helped us so much. When we move out, this is our plan. We want to send you $200 a month. We know that it can never equal all the help that you have done. We want to show you how much we appreciate you, and we want to send this money to you because it will make us feel good and we want to take care of you in the way that we can. How would you feel about that?”

[01:10:46] David: It provides her with some additional stability. It grounds that chaotic energy that– she literally does not sleep at nighttime because she’s always thinking. Yeah, I know it would make her feel good. And I would do it in a heartbeat.

[01:11:02] Angela: I agree. Obviously that’s always been something we’ve talked about, but we’ve never created a plan.

[01:11:10] Ramit: That’s why I think this changes the dynamic. Right now she’s very generous to allow you to live there. I think it’s awesome. But you’ve been there for years. When was the last time you proactively said, “We want to help you, and here is what we are going to do?”

[01:11:23] David: Never with an actual plan.

[01:11:26] Ramit: Exactly. You’ve never done it to your mom. You’ve never done it to yourselves. You’ve never said, “We are going to help ourselves. This is how much we are putting in savings. This is how much we’re investing. This is what we are and are not doing with our spending.” Never. So what an opportunity to start being able to do it right now. In fact, before you leave, would be even greater.

[01:11:49] So could experience her getting the money. Now, the $200 a month or whatever the number is, is not going to make a material difference for her. But it’s a very, very powerful gesture. And part of, in my opinion, living a Rich Life is being generous when you can, especially for someone who’s helped you so much. Speaking of expenses, let’s talk about them.

[01:12:08] Angela, we began today’s discussion talking about the conferences that you have gone to and came to David recently and said, “I want to go to this conference.” In light of our conversation today, how do you think that conversation would go about this upcoming conference if you were to have it right now?

[01:12:26] Angela: I think David would say what he said that day and be like, “Maybe you would agree that you can’t do that right now.” And the difference is that I do agree. I was supposed to have a conversation with the woman tomorrow, and I’m going to just email her about it and be honest about it.

[01:12:44] Ramit: What are going to say?

[01:12:45] Angela: I’m not going to take that class.

[01:12:47] Ramit: I agree. That’s cool. That’s awesome. Round of applause. That’s really cool. That takes a total rethinking of the way that you’re approaching these decisions. I love that. What do you think has been going on as you go to these conferences over the last few years?

[01:13:02] Angela: I think one of the biggest things for me has been avoiding actually having a stable income. It’s a way of self-sabotaging. Yeah, this is the one. I’m going to learn X, Y, Z, and then I’m going to start working. So it’s been mostly that. I think I’ve been trying to find a way to self-sabotage my career.

[01:13:25] Ramit: Hmm. And when you say self-sabotage, you mean look for the next big thing. Keep consuming, but not actually change what you are doing, reflecting in your income.

[01:13:38] Angela: Yes, absolutely.

[01:13:41] Ramit: That’s pretty honest. Wow. Angela, what do you think you could right now if you wanted to increase your income?

[01:13:48] Angela: I took a training to start teaching childbirth education classes. I paid for that training, and I haven’t done that. So start teaching the childbirth classes would be the first thing. And then start attracting private clients.

[01:14:04] Ramit: When I look at your income, you are making $36,000 a year. What do you think about that income?

[01:14:11] Angela: I don’t like it, obviously. I want it to be a lot higher.

[01:14:14] Ramit: Do you work full-time?

[01:14:16] Angela: Yes.

[01:14:17] Ramit: To me, if we’re being very honest, that income for somebody who’s working full-time and is in a situation where they have about one month’s worth of savings, it’s just not acceptable. You have to be elevating to a higher level. To make $3,000 a month, there are many ways you could do that, working at a much easier job.

[01:14:39] And if the two of you had had a decision about one person staying home, et cetera, that would be another conversation. But to be putting all this time and money and only be making $3,000 a month, that tells me that you are allowing this because there is no pressure for you to increase. Not from David and not from yourself. So what is the number that you want to make?

[01:15:01] Angela: Honestly, 80,000.

[01:15:03] Ramit: 80,000 a year. What is the number that you realistically can make?

[01:15:07] Angela: I have no idea.

[01:15:09] David: She can increase the number of private clients. If she does three births a month, that’s $4,500.

[01:15:15] Angela: If I did three births a month or more than that, that would require someone to pick up our daughter from school, be with her after school, and being available for whenever I get called in for birth, basically. And that’s, at the moment, not the case.

[01:15:35] So I don’t think I could realistically do three births a month with our current situation. What I could do would be the child birth classes, if I charged around 300, 350 per class for the maximum amount of people, that would be like the big difference I could make right now.

[01:15:55] Ramit: I respect what you just said, Angela. You know your career better than anybody else, but did you notice the dynamic of what just happened? What did David just say?

[01:16:04] Angela: He said, “I think you can realistically make that.

[01:16:07] Ramit: Okay. So what was his role when he said that?

[01:16:09] Angela: Encouraging me.

[01:16:10] Ramit: And he’s telling you, as far as I can see, I think you can do this. You can do more than you are doing right now. And then what was your response to him?

[01:16:20] Angela: That I don’t think so.

[01:16:21] Ramit: Correct. And then you proceeded to list off what?

[01:16:24] Angela: The reasons why I can’t.

[01:16:26] Ramit: Mm-hmm. And so here you are stuck again. How often do you think that that happens?

[01:16:32] Angela: Probably every day.

[01:16:34] Ramit: So for years you have been saying basically like, “I can’t do that. Here are all the reasons, and therefore I’ve come 360 degrees, and I’m back here again.” Do you see why you are stuck?

[01:16:46] Angela: Mm-hmm.

[01:16:47] Ramit: Okay. Do you want to change that? What roles could we change in those conversations? For example, I don’t want to be in a conversation with my wife where she’s encouraging me to do something and my responses are like, 20 reasons why I can’t do it. role would you want to change to?

[01:17:00] Angela: I don’t know, more proactive about it.

[01:17:04] Ramit: Getting proactive, coming up with answers. Okay. David, in one sentence, give us the encouragement.

[01:17:09] David: I believe that you can do it.

[01:17:11] Ramit: Angela, take it from there.

[01:17:13] Angela: It’s really hard for me to see that.

[01:17:18] Ramit: So what if it’s hard? The most valuable things in life are supposed to be hard. Did your daughter learn how to walk?

[01:17:25] Angela: Yes.

[01:17:26] Ramit: That must have been hard.

[01:17:28] Angela: Yeah.

[01:17:28] Ramit: Did you tell her, “Oh, it’s hard. It’s fine. Just lie down. It’s fine?” No.

[01:17:33] David: Never.

[01:17:36] Ramit: Never. Exactly. It’s supposed to be hard. Angela, when you see something hard, you run away. You go to buy another course or an event because that is going to feel good for the moment. It’s hard. I don’t want to deal with it. Money’s hard. I don’t want to deal with it. You deal with it. It’s fine.

[01:17:53] The change that has to happen is so deep that you actually have to reconfigure the way you think about things that are difficult and run towards it and say, “I am smart enough to be able to figure this out. Millions of other people have, I can do it myself.” And when you do that, your daughter is going to see you doing that. Go ahead. Respond to the encouragement David gave.

[01:18:14] Angela: I literally don’t know how. I can’t see a way. I don’t know other doulas that have kids that are little and that are making that income or are going to three, four births a month. I don’t feel like we have a support system where I could rely on like, okay, I’m going to be attending this amount of birth. So I can’t. I can’t see it.

[01:18:39] Ramit: Right now what’s happening is you’re jumping to being perfect, and you’re saying, “I can’t be perfect. How can I do four births?” But why don’t we start at one?

[01:18:51] Angela: I am doing one a month.

[01:18:52] Ramit: Okay, let’s jump to two.

[01:18:54] Angela: Yeah.

[01:18:54] Ramit: If you don’t have a support system, then maybe that’s the next step. How can you build that support system? Who could you tap? What would it take? I don’t know. Explore with me.

[01:19:03] Angela: If we moved to Colorado again, that’s where we have more people that I can trust. We have friends, and I would just be reaching out for them for support. It’s finding people that can be available for those gaps. Our daughter’s teacher is very supportive, so she has a community. So I would probably be tapping into that community.

[01:19:27] Ramit: I love that. I feel Colorado’s going to be a great change. What about before then?

[01:19:32] Angela: I will have to continue to make connections here. I’ve connected with a lot of doulas. I will reach out to them, see how they’re doing it, because there are some of them that have kids.

[01:19:42] Ramit: Amazing. How many doulas do you think you know?

[01:19:45] Angela: Probably 20.

[01:19:46] Ramit: Amazing. Let’s just say half of them have young children, and let’s say half of those answer you. That’s five people right there who could give you answers, maybe references, maybe how they did it, who they know, who you could talk to. Amazing. I feel like you could get some pretty good answers there. What else could you do? If you’re stuck, ask David.

[01:20:04] Angela: What do you think I could do, honey?

[01:20:06] David: You hold yourself lower than what you actually are. I think you can still raise your prices. Stop comparing yourself to other people. Stop figuring out if somebody else has done it. I believe you can do it.

[01:20:22] Ramit: What do you hear when he says that?

[01:20:24] Angela: That I’m not valuing myself enough.

[01:20:27] Ramit: And how does that make you feel?

[01:20:29] Angela: The first thing that I feel is frustration because jumping into this market that is super competitive and just suddenly charging more than these people that have been doing it for over 10, 20 years, it doesn’t feel right to me.

[01:20:43] Ramit: What I noticed is that both of you are just in your own corners of the ring, just arguing. You see it differently. What I don’t notice is actually a conscious spending plan, or numbers, or Rich Life vision in the conversation. It’s just the two of you with your boxing gloves up.

[01:21:01] Now, a different way to approach it would be, “Hey, as a family, we need to hit our number of 60%. We need to be sending this much money to mom. We need to be investing this much. Right now, we are not doing it. Here’s what I think I can do. What about you?” And then each person takes on the responsibility proactively of saying how they are going to contribute to the family’s vision.

[01:21:24] Now, sometimes one person can earn more. In this case, Angela, you can definitely earn more. I don’t think you’re setting the expectations for yourself high enough because there are minimum wage jobs that could pay you more than you are making right now. How do you have the kind of life that you want when you are accepting the pay right now?

[01:21:43] And the dynamic problem is that David is trying to encourage you, but the way he’s doing is like, “Just charge more.” And you are resisting. That’s because neither of you have a vision. The vision is, look, here’s what we want to do. Here’s what we need to get. We need to be making this much money. Here’s how much I’m making at my job. I can take on a couple of extra shifts. How can you contribute?

[01:22:01] And each person, as a partner, needs to speak to what they can do. If it’s childcare, childcare. If it’s earning more, it’s earning more. There’s many ways to contribute. It’s not all money. But right now both of you have got to be speaking up about your vision. How does that strike you, Angela?

[01:22:18] Angela: I think you’re right. We haven’t done that for sure.

[01:22:22] Ramit: Do you want to do it right now?

[01:22:23] Angela: Yeah, absolutely.

[01:22:26] Ramit: Go ahead. Who wants to take the lead?

[01:22:28] David: I’ll take the lead. So you said that you can charge 350 per person and up to six people. Right?

[01:22:34] Angela: Mm-hmm.

[01:22:35] David: Okay, so that’s what? That’s $2,100 a month that we can add?

[01:22:40] Angela: Mm-hmm.

[01:22:41] David: How do you connect to those people?

[01:22:42] Angela: Reaching out to the other doulas. I do know that not a lot of people offered that particular class. In fact, I mentioned it to another doula and she was like, “Oh, exciting. We haven’t actually had one of those locally.”

[01:22:55] Ramit: Can I pause right here?

[01:22:56] Angela: Yeah.

[01:22:57] Ramit: What’s happening in this dynamic right now? I love it. It’s a very positive conversation. Great. But what’s happening in this dynamic? Who’s leading?

[01:23:03] Angela: David.

[01:23:05] Ramit: David is leading Angela, which means Angela is simply responding to questions. Not the way this needs to go. Angela, your job is to be proactive. So I’m going to gently suggest that Angela actually lead this part of the conversation. And I’m going to suggest that you both start by talking about your vision before you jump into how many people are going to be at the doula thing.

[01:23:29] Angela: So the main thing would be to move out of the house.

[01:23:33] Ramit: Great. So when is that going to happen, and what do you need in order for that to happen?

[01:23:38] Angela: The timeline that we discussed was June. And what I need to do to make sure that can happen is increase my income.

[01:23:46] Ramit: How much do you need to increase it to?

[01:23:49] Angela: I don’t know how much I need to increase it to specifically.

[01:23:53] Ramit: David?

[01:23:54] David: I’d like to see at least 5,000 a month, so 60,000 annually.

[01:23:59] Ramit: I love that you have identified that the biggest burning thing you want to accomplish is being able to move out by next June. That is what we are working towards. Everything we are doing in this family financially is to be able to do that. Now, what does it mean to be able to move out in June?

[01:24:18] Well, we need to have thousands of dollars in savings because moves are expensive. There’s going to be stuff. Maybe you need to truck it over there, or maybe you’re going to have to buy stuff. Who knows? But you do not want to go into debt moving. So how do we have thousands of dollars more?

[01:24:35] Well, we’re going to cut some of our expenses, and we’re going to redirect some of that towards a savings account. But in addition, Angela’s said, “I want to increase my income, and I’m going to target–” Sounds like the two of you have maybe talked around 60k per year, annually.

[01:24:50] The point is, it needs to happen now. Not nine months from now. No, it’s now. And we’re taking the extra money, and we’re going to put at least most of it into a savings account that is going to provide our emergency fund. And if we need to tap into it, a moving fund. You see how crisp that is?

[01:25:07] David: Mm-hmm.

[01:25:07] Angela: Absolutely.

[01:25:08] Ramit: There’s no questions. We know the date. We know how much. We will even get specific. I want six months of our fixed costs in an emergency fund. That’s $24,000. Boom. And I want a moving fund of $5,000. The emergency fund can take a while to build up. We don’t need it tomorrow, but we need that moving fund ready before June. Simple as that. So then the question becomes, how are we going to do it? Angela, go ahead. Take the lead. How are you going to increase your income?

[01:25:39] Angela: I am going to reach out to the doula community, and I’m going to start offering the childbirth classes. That’s something I can literally start doing now. The other thing would be, instead of doing one birth per month, I could do two births per month.

[01:25:54] Ramit: What would you need in order for that to be successful?

[01:25:57] Angela: So for the extra birth, it would be just making sure that I have that coverage for those gaps.

[01:26:03] Ramit: That sounds awesome. Sounds like you can make those things happen soon. And David, what about you? How are you going to contribute to helping get that $5,000 moving fund as well as your emergency funds start to get filled up?

[01:26:16] David: I would work on the side. I could build tables. I could build whatever types of furniture that I see. And I could market those. I’ve done well in the past. 2,000 additional dollars a month adds up.

[01:26:27] Ramit: You can make 2,000 extra dollars a month?

[01:26:30] David: Yeah, I did it. I did it with garden beds in March and April.

[01:26:33] Ramit: How come you don’t do it right now, just out of curiosity?

[01:26:35] David: Time. I’m exhausted when I get home from work, emotionally, mentally.

[01:26:40] Ramit: Well, that’s pretty honest. What would make you magically change and not be exhausted?

[01:26:45] David: More than anything, it’s my attitude and adjusting my attitude. I always try to show up to everything with a good attitude, but sometimes in car sales, you leave exhausted. So I just want to come home and I just want to decompress, and I don’t necessarily want to go work out right away.

[01:27:00] I just want to spend time with Angela and our daughter. I want to be with my family, but I could have a set schedule to when I wood work every night, regardless of how I feel. I just have to do it.

[01:27:12] Ramit: That’s real. That reminds me of my parents. I’m sure they felt frustrated and overwhelmed a lot, and yet they still had to do. I think that sounds like a lot of parents in America. But I’ll leave it to you. You are the ones living it. If you’re telling me you can make an extra $2,000 or $1,000 a month, that’s still a lot of money.

[01:27:31] I also think that eating out thing is an easy fix. 11 times a week, not in my world. So the question then becomes, what does it take in order for us to save literally hundreds of dollars a week and put that into a savings account? Probably requires the two of you to meal prep together.

[01:27:47] Probably requires some type of system so the groceries are there, etc. But you could solve that. If the desire is strong enough to move out by June with a $5,000 moving fund. Or you can just see what happens.

[01:28:02] David: Yeah, I’ll take the first part.

[01:28:04] Ramit: I would too. Before we wrap up, I want to ask you a few questions, and I want to tell you how much I appreciate you being honest. This is hard stuff. What stood out from today’s conversation?

[01:28:17] Angela: We hadn’t thought about the roles. David does describe himself all the time about the provider and the grounder and all those things that he said, but I guess we hadn’t really observed the picture of what that looks like and how that plays out and how I’ve allowed myself to become evasive and not face those things because he is grounded. He’s providing. He is doing this and that.

[01:28:44] And so I can just pretend that it’s not there and not face those hard things, but now being able to understand where I’m coming from and also what you asked me, like, how do you want to start showing up or how do you want to show up now? I think that’s probably the biggest part and what’s going to keep me very focused and grounded. I don’t want to be in the same dynamic. I don’t want to be in the same patterns. I want to show up as that person. And yeah, that’s what stands out to me.

[01:29:15] Ramit: Great. David?

[01:29:17] David: One of my big intentions going into this was just to break these old patterns. I see my parents. I see the patterns that we’ve lived. I want to do things differently. I’m optimistic about this. I know we can do it. I’m always confident that we can do this. We just got to figure out how. We have to talk about it and having clarity and a clear course of action. You don’t accomplish anything unless you take action.

[01:29:40] Angela: I feel scared because I’ve allowed myself to be in this position for so long that I’m scared of maybe disappointing myself.

[01:29:48] Ramit: I really love that answer because it tells me that you are seriously considering making changes. If somebody’s in your position sat here and said, “I feel fine,” I would say, “Oh, she’s not going to change a thing.” But the fact that you are scared is a great sign. It means that you are already envisioning what will happen.

[01:30:04] And the way you put it, I want to give you a slight reframe. You said, “I’m afraid I might fail.” You’re going to fail. That is life. When you are starting something for the first time, you will fail. Trying to avoid failure is like trying to avoid getting wet in the ocean. You will fail. Accept it, plan for it.

[01:30:23] The first time you run a class, probably nobody’s going to come. Cool. What are you doing on the second class? And what you will quickly discover is these things which seem so existential the first time you try them, pretty soon they just became a speed bump in the rear-view mirror.

[01:30:37] They are nothing when you get enough strength and perspective. So Angela, don’t be so afraid of failure. It’s coming. And that actually is ultimately the most reassuring thing at all. I know failure is coming my way, and I know that I’m strong enough to handle it.

[Narration]

[01:30:53] Ramit: Big thank you to Angela and David for joining me today. When we started, the two of them were dreamers who thought that they could go from moving out of David’s mom’s house to buying a house in Colorado. It was unrealistic. But today, at least in this conversation, they stopped imagining and started actually planning.

[01:31:12] Instead of chasing a house they can’t afford, they’re focused on a realistic next step, which is a sensible rental apartment. That is amazing. That’s exactly how lasting change begins. One step, one decision, one honest conversation at a time.

[01:31:28] So now, let’s hear how they’re doing up. First is Angela, who emailed me a thoughtful update. She writes, “For the first time since we’ve been together, it feels like we are finally not improvising every single move in our financial lives, but actually taking coherent steps towards the lives we want to live.”

[01:31:46] “As far as moving out of David’s mom’s house,” Angela shares, “we hit our 5k moving fund and are now working towards the emergency funds.” They’ve been able to do this by getting their spending under control. She says, “We went from eating out 11, if not more times a week, to eating out twice a week, and sometimes not even that.”

[01:32:09] Angela’s also making progress in her career as a doula. Here’s what she wrote. “I planned my first childbirth education series and will be launching it this week. I had two consultations with private clients who both ended up working with different doulas, but hey, I’m getting myself out there and targeting more private clients. I’m also really focused on growing my connections so that I can have more people to rely on and have a really good support system in place to feel at peace to do my work.”

[01:32:39] As for David, he decided not to share an update, which is disappointing. I spend a lot of time with my guests, and I want an update not only for my own knowledge, but so that my guests hold themselves accountable. Sometimes neither partner will send an update. Sometimes only one partner does, like today. It always makes me wonder what it means when one partner sends an update, but the other does not. I’m sending Angela and David my best wishes.

[01:33:09] Thanks for watching. For more real stories with real numbers from behind closed doors, click above for another episode of Money for Couples.