Episode 235. “Can we pay off this debt faster?” (Part 2)

Imani (52) and Michael (65) return for Part 2—and this time, Ramit pushes them to find out how fast they can turn things around. 

After years of miscommunication, mounting debt, and emotional exhaustion, they’ve finally started tackling their finances together. But when Facet’s retirement scenarios reveal how long their money will really last, they’re forced to confront new tradeoffs: spend less now, retire later, or change their lifestyle entirely. Can Michael step up and lead? Can Imani release control and start dreaming again? Or will their old habits slow their progress before it even begins?

A special thanks to Facet for sponsoring this episode. Right now, Facet is waiving their $250 enrollment fee for new annual members. And if you invest and maintain $5,000 within your first 90 days, they’ll add $300 to your brokerage account. Head to facet.com/ramit to see which membership—Core, Plus, or Complete—is right for you.

(Ramit is not a member of Facet, and he has an incentive to endorse Facet as he has an ongoing fee based contract for cash compensation based on this endorsement. All opinions are his own and not a guarantee of a similar outcome.)

In this episode we uncover:

• Why Michael finally decides to take ownership after decades of financial avoidance
• The moment Imani says she’s “tapping out” if things don’t change
• How they discover Michael’s electronics obsession is more than clutter—it’s avoidance
• The shocking realization that their debt payments eat up one-third of their take-home pay
• How selling off $7,000 of electronics became the turning point for their marriage
• What it felt like for Imani to finally let go of control and let Michael lead
• Why teamwork and a clear plan helped them pay off $6,000 in just four weeks
• How both partners confront what “enough” really means
• The couple’s new shared dream: retiring abroad and living a simpler, freer life

Chapters:

(00:00:03) “I’m angry at Michael, I’m angry at myself”

(00:18:03) “I’ve lost the ability to dream”

(00:34:45) “It’s gotta work”

(00:40:17) “I got the fever to start selling stuff”

(00:51:47) “I could see the cloud starting to separate”

(01:06:29) “I feel excited, inspired, energized”

(01:22:39) Where are they now? Imani and Michael’s follow-ups

This episode is brought to you by:

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Shopify | Sign up for a $1 per month trial period at https://shopify.com/ramit

Links Mentioned In This Episode:

If you want help with your finances, join my Money Coaching program at https://iwt.com/moneycoaching

Transcript 

Download the full transcript PDF 

[00:00:00] Ramit: Previously on Money for Couples.

[00:00:02] What do you think about this debt?

[00:00:03] Imani: I’m angry at Michael. I’m angry at myself. Michael has 10, 12 laptops.

[00:00:12] Ramit: What the [Bleep]? 12 laptops?

[00:00:15] Imani: Yeah. He’s at the point now where he should be able to retire, but he can’t.

[00:00:19] Michael: This is my vision or my goal, someone to manage the money and make sure that it goes in the right places. I don’t have that knowledge to do that.

[00:00:29] Ramit: If this doesn’t work, what does it mean for you?

[00:00:32] Imani: To be honest, I’m tapping out. I can’t keep doing this.

[00:00:39] Michael: To be truthful, after our conversation, I got [Bleep] off. I got the fever to start selling stuff.

[00:00:46] Imani: How do we wipe the debt out so that our net worth continues to rise?

[00:00:49] Ramit: How much debt have you paid off since we last talked?

[00:00:54] Imani: 6,000.

[00:00:55] Ramit: $6,000 since we last talked?

[00:00:57] Imani: If we had no debt, if we had just the mortgage, we’d be well over a million today.

[Narration]

[00:01:03] Ramit: When couples have a lot of debt, one of the most common phrases they say is, “We’re just going to die with this debt.” But virtually none of them has ever run a simple debt payoff calculation. They’ve basically just given up. When will their debts be paid off? What happens if they pay more or pay less? What levers can they pull to speed things up?

[00:01:25] They don’t ask these questions because it’s uncomfortable, and people don’t like to feel stupid about money. No wonder they feel so bad about debt. They’ve never even taken five minutes to figure out a plan to get rid of it. But that’s exactly what we do here on Money for Couples.

[00:01:42] Today we’re back with Imani and Michael. They’re 52 and 65 years old, and after 20 years of marriage, they finally combined their finances just four years ago, and everything fell apart. Last week, we left off with Imani in tears because their Rich Life visions are so different.

[00:01:59] Imani dreams of a life full of travel and experiences. Meanwhile, Michael says he wants to just declutter and sit with a book. She wants bigger. He wants smaller. And honestly, when your Rich Life vision is that small, it’s no surprise that Michael has not thought about retirement. When the bar is set so low and you’re carrying over $600,000 in debt, retirement just feels like a fantasy.

[00:02:25] That is why I called in our partners at Facet to help us today. Michael is 65 years old, but with high debt and a high income. Their financial picture is fascinating and complex. Facet has provided real scenarios today to show exactly what Michael needs to do to retire. You can learn more about how Facet can help you at facet.com/ramit.

[00:02:47] Can Imani and Michael bridge their worldviews and come around to a shared Rich Life vision? Can they repair the wedge that has been driven into their relationship? I recommend you go back and watch or listen to part 1 for all of the important background on this fascinating story.

[00:03:04] Now let’s do a quick recap of their conscious spending plan, the same tool that I use in every episode to go through their actual numbers. Assets, $603,000. Investments, $770,000. Remember, Michael is 65 years old. Savings, $8,500. Debt, $601,000, including over 100k of high interest consumer debt. Net worth, $780,000. Annual income, $268,000. Let’s see if we can help Imani and Michael rewrite their story and their future.

[00:03:40] Facet is an RIA with the SEC. The Facet provided scenarios discussed are based on inputs provided by Imani and Michael and are based on industry-standard assumptions. This information is my opinion, is for illustrative and educational purposes only. Investing involves serious risks and past performance is not a guarantee of future performance or success.

[00:03:58] I’m not a member of Facet. I have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation based on this endorsement.

[Interview]

[00:04:11] Ramit: So your Rich Life is to declutter.

[00:04:15] Michael: Declutter, get rid of this debt.

[00:04:21] Ramit: Okay.

[00:04:22] Michael: And just have a simplified life. Just really have a simple life. I have more than I deserve.

[00:04:30] Ramit: Okay. I’m going to help you come up with an even more powerful vision of a Rich Life. Imani, I see you nodding over there. How come?

[00:04:43] Imani: Because I feel like everything that he says, I don’t know if it’s because he’s looking at the effect of things on me. I want Michael to have a vision of his Rich Life. You talked about I want to travel and all that, and he didn’t say that. And so for me, it feels like he’s like, “Oh, I’ve lived my life and I’ve traveled the world. You go do that by yourself.”

[00:05:07] And I don’t want to do life by myself. If I want to do life by myself, then I’ll just go do life by myself. I wouldn’t have wrote into this program. I would’ve just said, you know what? I’m over it. I’d have cashed out of my 401(k), paid off my debt, take my children, and just go. And then he says he has more stuff than he deserves. So what are you not deserving of? Of a Rich Life? To me, that’s an issue. I deserve the best of everything.

[00:05:41] Ramit: Keep going.

[00:05:41] Imani: And I’ll be damn if I won’t go get it.

[00:05:44] Ramit: Say more.

[00:05:46] Imani: I feel like I work hard. I give, I give, I give. My family probably wants to smack me. I’m always somewhere volunteering and giving and giving and giving. I feel like that is my mission, like I’ve been put on this earth to serve. But I also deserve to live that Rich Life, to travel, to do all the things that God put in my heart to do. And for him to say he doesn’t deserve that, I’m like, “God.” So there’s a disconnect there.

[00:06:20] Ramit: Yeah. Are you too religious?

[00:06:24] Imani: Absolutely.

[00:06:25] Michael: Yes.

[00:06:25] Ramit: Both are. Okay. I have more than I deserve. Familiar phrase. Michael, where’d you pick that phrase up?

[00:06:36] Michael: I just look around me when I’m in the house and that’s like, I got this piece of equipment. I got this. It’s just too much.

[00:06:49] Ramit: Hold on. Finish the sentence. I have this. I have that. And?

[00:06:58] Michael: So if I have 10 computers and I have 15 computers, I can only be on one computer at a time. Why do I need 14 other computers?

[00:07:05] Ramit: But yet, you just bought an SSD, another one.

[00:07:09] Michael: Yeah.

[00:07:10] Ramit: And you had a very good reason to explain it to Imani.

[00:07:13] Michael: Yeah.

[00:07:14] Ramit: So in a way you’re saying, “I have more than I deserve, and why do I have all this?” But then you just buy another one. Explain it.

[00:07:22] Michael: Yeah. It is just, I would say, a bad pattern of doing that.

[00:07:30] Ramit: What do you feel when you go to the website or the store and you pick that thing up? What do you feel?

[00:07:37] Michael: The first thing I say is, “Okay, I’m looking at something. I really don’t need it, but I would like to have it.”

[00:07:42] Ramit: Mm-hmm. What do you feel?

[00:07:47] Michael: I just feel like, hey, I should not be on this website looking at this.

[00:07:54] Ramit: No.

[00:07:54] Michael: Because I don’t need it.

[00:07:55] Ramit: It’s not what you feel. You’re lying to yourself right now, and you’re lying to me. I get lied to a lot. I love it. But I could tell. I think when you go to that website or that store, you see the little computer or the tech gadget, and you feel excited. I think you go, “Ooh, that’s going to be good. I got a reason. I know I have this one, but I actually need this one because it has this feature.”

[00:08:24] Michael: Mm-hmm.

[00:08:25] Ramit: True or false?

[00:08:27] Michael: True.

[00:08:28] Ramit: Okay. I don’t think you’re trying to lie to me on purpose. I don’t think that at all. I think we all lie in different ways. Somebody say, “Do I look good in this shirt?” Whatever. I don’t mind that stuff. But I’m wondering, do you have access to your own feelings inside? Do you know why you do certain things?

[00:08:50] Michael: Sometimes I don’t.

[00:08:52] Ramit: Great. Very honest answer. I appreciate that. Okay. And again, not that I think you are lying intentionally to me. You’re here. I know you’re here out of good faith. You both want help. I get that. I believe that.

[00:09:06] Michael: Right.

[00:09:07] Ramit: But when I ask you, what’s your Rich Life? Your answer is, I want to minimize. But there’s no real evidence of minimizing. When I ask you, like, what would you want to do? She could travel, and like Imani’s crying over there saying like, “I don’t want to do it alone. I want to do it together.” We’re not in the same universe right now.

[00:09:27] Michael: Mm-hmm.

[00:09:28] Ramit: Imani, what do you think it would take for you to get on the same page about money?

[00:09:31] Imani: I think it would take a real effort on Michael’s part– a real, concerted, consistent effort. Not a, yes, we got off the podcast and now we have this thing. For two months everything’s great, and then all of a sudden we’re back in the same pattern.

[00:09:48] Ramit: But what if it doesn’t work? What if it’s, you worked at this other money coach and you got the pack of budgets and this and that, nothing really changes after a couple of months. What happens then?

[00:10:02] Imani: To be honest, I’m tapping out. I want out.

[00:10:09] Ramit: Hmm.

[00:10:11] Imani: I want out. It’s got to work. I don’t have the energy and the intestinal fortitude, the desire. Michael has got to show up because I’m tired.

[00:10:29] Ramit: Okay.

[00:10:30] Michael: It’s got to work. I don’t have any more solutions. I don’t.

[00:10:38] Ramit: Mm-hmm.

[00:10:39] Michael: It’s got to work.

[00:10:41] Ramit: Okay. I’m going to help you come up with an even more powerful vision of a Rich Life.

[00:10:51] Michael: And I think it will work because I don’t think the proactivity has been there on my part.

[00:10:57] Ramit: Mm-hmm. Can you say that again in a way that is taking ownership?

[00:11:03] Michael: I don’t think I’ve been proactive. And by me being proactive is me pushing the agenda as far as finances.

[00:11:11] Ramit: Nice.

[00:11:12] Michael: Not always Imani pushing the agenda, to the point where she says, “Okay, I don’t want talk about the finances anymore. I want you to manage it.”

[00:11:20] Ramit: Whoa. I like that.

[00:11:23] Michael: Right. So then that will take some stress off of her, and she can focus on some other things that will enhance what we’re trying to do from a relationship standpoint. Yeah. So I believe everybody has a– you know who Doug Flutie is?

[00:11:42] Ramit: No.

[00:11:43] Michael: So Doug Flutie was a football player, and he played for Boston College. The time he was out in the game, and he had one pass-to-mate to win the game. He threw the pass and the receiver caught the ball, and Boston College won the game. This is my Doug Flutie moment.

[00:12:05] Ramit: Wow. What does it mean to you?

[00:12:08] Michael: A lot.

[00:12:11] Ramit: Mm-hmm. Tell me. Take your time. We got no rush.

[00:12:30] Michael: It’s time to stop.

[00:12:32] Ramit: Mm-hmm. Time to stop spending?

[00:12:38] Michael: Yes.

[00:12:38] Ramit: Okay. And tell me when you want to start.

[00:12:46] Michael: As soon as I can.

[00:12:47] Ramit: Mm-hmm. What do you want to start doing instead?

[00:12:53] Michael: Just getting rid of stuff.

[00:12:56] Ramit: Mm-hmm, mm-hmm. Okay. And once you get rid of those things– we can make it happen– what then?

[00:13:07] Michael: Have a plan. Have a discipline and rigor to stick to the plan.

[00:13:11] Ramit: Yeah.

[Narration]

[00:13:12] Ramit: I’m struck by the way Michael talks about his Rich Life. Do you notice how he keeps circling back to the same idea? Stop spending, declutter. It’s all just so small. I think Michael has truly lost the ability to dream, maybe partially because of the generation he grew up in, but I suspect the larger reason is that he’s an avoider. He’s avoided the issue of money for so long that dreaming simply feels foreign to him.

[00:13:39] And when you avoid money, you don’t just avoid spreadsheets or debt. You actually avoid the bigger questions about what you want out of life. So instead of imagining a Rich Life filled with meaning and connection, Michael has shrunk his vision down to arbitrary commodity purchases– a keyboard, a computer– because that feels manageable and safe.

[00:14:02] Guys, listen up. Your Rich Life is not buying random commodities. I can tell you that right now. Not a single person I have ever talked to has answered my question, what is your Rich Life, with keyboards or detergent at Target, or even sweaters, which I personally love. Now if you love those things and you can afford them, get them. But we both know that is not the totality of what matters to you in your Rich Life.

[00:14:29] When Imani talks about her dreams like traveling to Martha’s Vineyard, she’s trying to create a more powerful vision. It’s not really about Martha’s Vineyard. The traveling represents new experiences, being expansive, seeing new places. It’s about living bigger, not smaller.

[00:14:45] I can guarantee you that a keyboard or a freaking coffee mug is probably not your Rich Life in totality. I think he’s finally starting to realize the severity of the situation now. So I want to keep pushing. Listen, as I challenge Michael to stop retreating.

[Interview]

[00:15:06] Ramit: I think that when I ask what’s your Rich Life, what I’m looking for is the ability to dream, is the ability to think beyond a daily problem or a monthly problem, or even a spreadsheet. I’m looking to see if one or both partners have the ability to think bigger. And I typically find that most people have such a bad relationship with money that they’ve lost the ability to dream.

[00:15:35] Michael: Mm-hmm.

[00:15:36] Ramit: And Michael, you got a lot of life left in you, and what Imani is saying is like, “Hey, I’m young. I’m not even close to being done with this life, and I’m trying to do this with a partner.” And that I think is part of what is upsetting when your answer is, “I went when I was in the military. So if she wants to do that, she should do that.” You see how the two answers are not meeting?

[00:16:03] Michael: Yeah.

[00:16:03] Ramit: All right. Can we try it again, actually? Because I think this is so important. I think this is one of those moments that the two of you’re going to remember for a long time. Michael, specifically, I’m going to ask you, what is your Rich Life in just a minute. So go ahead and just think about it.

[00:16:20] Michael: All right.

[00:16:20] Ramit: Think about it. You don’t have to answer me yet. Just give it some thought. Before you answer, maybe we can set up a North Star. I’ll give you a couple of examples. A North Star helps elevate us out of the day-to-day and all this debt that you have. Yeah, there’s debt. There’s a problem. We’ll try to fix it.

[00:16:41] But when my wife and I think about our North Stars, we have a few. We both want to laugh a lot. We both put relationships first. So if we ever have the opportunity, if we can be at somebody’s birthday party or something, we’re going to be there. You know what I mean? We’ll use money to spend more time with relationship. We want to travel a lot. We like fitness and stuff like that, so we’ll pay money for that.

[00:17:11] Michael: Mm-hmm.

[00:17:11] Ramit: What would be some examples of North Stars for you? Let’s go back and forth, starting with Michael. What’s important in your relationship?

[00:17:22] Michael: Through being in a financial situation where I can take the Imani to see places that I’ve seen, like the Grand Canyon.

[00:17:34] Ramit: Great. All right. Imani?

[00:17:36] Imani: To be able to take huge family vacations with multiple sides of our family where we pay for it. Like go to Jamaica, rent a house, take 10 people with us.

[00:17:49] Ramit: Great. Let’s do it again. And this time, no money.

[00:17:53] Michael: No money.

[00:17:54] Ramit: Just important to the two of you. Michael?

[00:17:59] Michael: I would say what’s most important right now is that we keep each other in check, that I take readily take on more responsibility for the finances.

[00:18:13] Ramit: What? Didn’t I just say no money?

[00:18:15] Michael: Oh, no money. I would say to be able to go to places like wine and sips. She likes going to wine and sip. To be able to go to wine and sips and just hang out.

[00:18:27] Ramit: Oh, I like that.

[00:18:29] Michael: Yeah.

[00:18:30] Ramit: All right. So to be able to go there regularly. What do you say? How often is that?

[00:18:33] Michael: I would say to be in a situation where we can go, say, once a month and it’s no big deal.

[00:18:39] Ramit: Love it. Okay, cool. Imani?

[00:18:42] Imani: To be able to go with Michael to try new foods. Thai food is one of our favorites. To be able to try different Thai restaurants all over the state where we live.

[00:18:53] Ramit: Beautiful. Okay. Now, Michael, can we come back?

[00:18:58] Michael: Sure.

[00:19:00] Ramit: I want to ask you the same question again. What is your Rich Life?

[00:19:06] Michael: I would say to be the man that she married 24 years ago.

[00:19:14] Ramit: Tell me what that means.

[00:19:17] Michael: I think we were more connected. I think we were more on the same page as far as being a family. We communicated more, even though we both had careers going on. That it still was that bond there that, hey, we’re in this together.

[00:19:39] Ramit: Yeah.

[00:19:40] Michael: Right.

[00:19:42] Ramit: What do you say, Imani?

[00:19:44] Imani: I think that’s great because I think a lot of life has happened. And we aren’t those damn people. I think a lot of frustration, a lot of disappointment has happened in 24 years. And an erosion of the trust, to be honest. Because financially, if you can’t trust someone and you feel like you’re in it on your own, and that’s how I feel sometimes– I feel like, again, like I said earlier, if I don’t do it, it doesn’t happen.

[00:20:19] And that’s a huge burden to take on. And so I would love for Michael to be the man that I married 24 years ago because I went into this thinking that. I know that we all carry baggage from our childhood. We all carry baggage from other relationships and marriages and things like that. So I get it. But I think we all have to take responsibility and accountability for where we are and our part in it.

[00:20:56] Ramit: Can I ask you, Michael?

[00:20:58] Michael: Sure.

[00:20:59] Ramit: I’m sorry to cut you off, Imani. Michael, I was really struck by what you said about reconnecting and getting that bond back that you had with Imani when you first met each other. What did it feel like when you had that bond?

[00:21:16] Michael: It felt great. I think I know our lives were a lot less complicated then, even though we both had careers. And as we grew older, we got more complicated with just life lifing.

[00:21:36] Ramit: Mm-hmm. How did it feel? You said great. Tell me more.

[00:21:43] Michael: We went out a lot. When we initially met, when the kids came along, I don’t think we stopped going out. We found somewhere to go out. So, I think the bond was stronger.

[00:22:00] Ramit: Hmm.

[00:22:03] Michael: As we grew in our careers, our sons are now adults now. We’re still in our careers, but I think what we’re doing in our careers probably vibrates more than what we do in our relationship, and especially around finances.

[00:22:22] Ramit: Yeah. Sometimes finances are just the surface level reflection of what’s going on at a deeper level. Not always. Sometimes it’s adjacent, orthogonal, whatever. But yeah, sometimes it’s easy to focus on work instead of a relationship. We all know that. Every one of us in a relationship has experienced that. I’m struck by the honesty, Michael. I feel like we’re really– we’re talking now about the real stuff.

[00:22:58] Michael: Mm-hmm.

[00:22:58] Ramit: The computers is not the real stuff. We’ll deal with that. But this is the real stuff. And to be able to talk about it in relation to money, that’s specifically what I do. So I want to try to get us to make some changes to the finances because I think it will influence the relationship, and I think the relationship will influence the numbers. It’s this beautiful cycle. It feeds on itself.

[00:23:28] It can be an upward spiral where things are going well and the money’s going well. And like, even if you have debt, still, you got a plan. Or it can be a negative spiral. We’re disconnected. We’re just going to spend a bunch of money, go into debt, not talk about it. Get in a fight every so often, and then repeat.

[00:23:43] Michael: Okay.

[00:23:45] Ramit: So I’d like to create a positive cycle.

[00:23:47] Michael: Okay.

[00:23:47] Ramit: I would like to quickly reflect on what I see in your conscious spending plan. In your 50s and 60s, if you two were earning far less, I would say, at least from a assets and investment perspective, it’s not bad. And if you were to tell me we have a pension as well, I would say, “Wow, that actually makes things even better.”

[00:24:16] But the fact that you earn $268,000 makes the numbers here not acceptable. The debt is unsustainable. Candidly, it’s out of control. First of all, there’s just so many sources of debt, and for what? Like for what? What do you have to show for it? Again, we have student loans. Okay. That I totally understand. And that is what is responsible for the higher income. That’s great. We have a home equity line of credit.

[00:24:52] We have a 401(k) loan. We have credit card debt, consumer debt, cars. It’s just a lot. It shows that it has not been organized, that there’s not been care and attention paid towards this. If we go down to fixed costs, 83% is way too high.

[00:25:11] I would like to see it lower, but it’s hard to change that. Look at these debt payments. $5,291 a month. Outrageous. Outrageous. You’re basically spending a third of your take home pay on debt. For what? All this hard work you’ve done, and it’s just going right into interest and a bunch of debt you racked up.

[00:25:39] Investments are at 1%. There’s basically nothing going there. Savings at 7%. It’s okay. We’d like to get that number higher. And then we know that the guilt free spending number is not accurate. You’re spending much more than you have noted here, which means you’re just going into more debt.

[00:25:57] Michael: Mm-hmm.

[00:25:59] Ramit: Big changes need to be made.

[00:26:02] Michael: I think that’s spot on. I agree that we need to make big changes. I’m not going to say it’s going to be drastic because I’m at the point now where they have to be made.

[00:26:19] Ramit: Great. It has to happen. I agree.

[00:26:21] Michael: Yeah, it has to happen. And I’m be honest with you, I’m not going to miss the things that I got to get rid of.

[00:26:28] Ramit: Great.

[00:26:28] Michael: I’m not.

[00:26:29] Ramit: That’s the way to approach it. Your job is to bring your fixed costs to 60%. But I would like for each of you, and I would like for Michael to start, because from now on Michael is taking a leadership role here. Play around. Tell me what you’d like me to do. Remember, I can always undo it. But we got the fixed costs, are at 83% or $12,000 a month, and we need to bring that number down.

[00:26:56] Michael: The two numbers that really stick out for me is the debt payments and groceries. In regard to the debt payments, getting rid of some things and just selling things could put a big dent in that.

[00:27:15] Ramit: Great. Talk to me about that.

[00:27:17] Michael: So, synthesizers, I’m going to say 7,000.

[00:27:25] Ramit: How many of those do you have?

[00:27:28] Michael: About seven of those, but they vary in prices.

[00:27:32] Ramit: Are you a hoarder?

[00:27:34] Michael: Imani said that I am.

[00:27:37] Ramit: Oh, [Bleep]. All jokes aside. If you look in the house, is it difficult to walk in?

[00:27:45] Michael: Yes.

[00:27:47] Ramit: Wow.

[00:27:47] Michael: In my electronics room, it is.

[00:27:50] Ramit: Okay, okay.

[00:27:51] Imani: Yes. His stuff has to be in a certain place. It migrates out, but I put it back. It’s like fighting the blob.

[00:27:58] Ramit: Has anyone else in your life ever joked about you being a hoarder? The reason I’m asking–

[00:28:05] Michael: My sons will quip every now and then.

[00:28:07] Ramit: What will they say?

[00:28:10] Michael: My oldest son always say, “You need to get rid of some of this stuff.”

[00:28:14] Ramit: And do you ever?

[00:28:18] Michael: Imani is saying no, but I recently took a trip home, and I took a couple of computers and gave them to my nieces and nephew.

[00:28:26] Ramit: I’m puzzled because these synthesizers appear to be quite large. You tell me, you don’t just have 1, 2, 3. You have seven. And then you tell me it’s difficult to walk around. It’s certainly caused hardship financially. We’re in a lot of debt here. But at the same time, you’re like, “I’m ready to get rid of it all.”

[00:28:46] Michael: Mm-hmm.

[00:28:47] Ramit: So I’m like, “Okay. That’s interesting.” I take you at face value. I believe you are ready to get rid of them. We’re going to make a plan for it to. I would like to encourage you to see a mental healthcare specialist.

[00:29:01] Michael: Mm-hmm.

[00:29:02] Ramit: And just talk to them about it. Worst case, you spend an hour of your time. Best case, it might actually unlock some serious insights. Would you be down for that?

[00:29:11] Michael: Yeah. And a lot of what I get rid of, absolutely nothing that I have in my possession that I will miss.

[Narration]

[00:29:22] Ramit:   I want you to notice the layers that we’re uncovering. It’s like an onion. Every time we peel a layer, a new one is revealed. And what strikes me about this collection of electronics, 15 laptops, seven synthesizers, a room so cluttered that he has trouble moving around, is how unreasonable it all is. It’s not just the sheer volume of stuff.

[00:29:42] It is the way he has fixated on these small things while completely ignoring the bigger, more pressing financial issues in his life. His wife has said she might leave. How many synthesizers is that worth? I also find it interesting how proud he is of these gadgets. There is no urgency or emotion, not even anger, when it comes to over $600,000 of debt. Instead, his focus has been what new toy he can purchase at Best Buy.

[00:30:12] Remember, when your life feels out of control, you often shrink it down to the most controllable item there is. We’ve seen it many times on this show. We have a couple whose finances are totally out of control, and what do we see? Often the wife micro fixated on a budget while their debt is simply snowballing out of control.

[00:30:35] We see the equivalent thing happening right here. Now, I told Michael, I’m not qualified to diagnose what’s behind this behavior, but I did suggest he speak to a professional. I admire that Michael wants to clean this room of gadgets, and getting help would make that a lot easier. Let’s keep going.

[Interview]

[00:30:54] Ramit: Seven of these synthesizers at roughly 800 bucks. We’re already at 5,000 bucks. So it seems to me with that plus 10 computers, we’re at, I don’t know, 10,000 bucks, ballpark.

[00:31:05] Michael: It’s got to be at least 15 grand.

[00:31:09] Ramit: Okay, great. Let’s say 15. That will bring your payments down a little bit. Not much. So Michael, there’s two numbers you said. Debt, payments and groceries. Why don’t we talk about groceries? Who does the grocery shopping?

[00:31:22] Michael: Imani does.

[00:31:24] Ramit: Oh, let’s ask her.

[00:31:25] Imani: We probably can take groceries from 1,500 down to 1,000. I can make work.

[00:31:34] Ramit: Yeah. Are you sure? I’m not pressuring you? You tell me. You do the shopping.

[00:31:40] Imani: Yeah. I think we can because we don’t eat the food that we bring in the house. We eat out a lot.

[00:31:47] Ramit: If I were you, Imani, I would assign that to somebody else. Because why are you taking that on? You got three grown adults besides you in the house. Here’s the number you need to hit every month. Good luck. That’s it.

[00:32:02] Imani: Okay.

[00:32:03] Ramit: Are you prepared to do that?

[00:32:06] Imani: Yes.

[00:32:06] Ramit: Tell me if you’re not. It’s okay. This is a hard transition.

[00:32:12] Imani: You know what, if I don’t then it won’t change. So I just have to.

[00:32:17] Ramit: I am so happy you just said that. All right. Damn. Well, let me just tell you, we just brought that number down by changing it from 1,500 to 1,000. We brought it down to 79%. Phone at 346. Why?

[00:32:35] Imani: Michael, tell him why. Why is the phone bill at [Inaudible].

[00:32:39] Michael: There’s two additional lines and phones on there.

[00:32:41] Ramit: Why? Does it even matter?

[00:32:46] Michael: No.

[00:32:47] Ramit: Okay. What number should it be?

[00:32:50] Michael: Everybody in the house has a separate line. I would say that it should be 250.

[00:32:57] Ramit: 250. All right. Moving along, subscriptions at 170. Can we just bring this down?

[00:33:07] Imani: Yeah.

[00:33:07] Ramit: What number?

[00:33:08] Imani: Let’s go to 100.

[00:33:10] Ramit: Great. All right. We’re down to 78%. We’re moving in the right direction. It’s really the debt that we need to talk about. Do you know when your debt will be paid off? Yes or no?

[00:33:23] Michael: No.

[00:33:24] Ramit: Okay. Imani?

[00:33:27] Imani: Some of it. Not all of it, no.

[00:33:33] Ramit: Everyone’s just like, “This sucks, and I’ve gotten used to it, and I’m going to instead focus on other things like Best Buy purchases instead of this thing, which is really the thing that matters.” What I want to do is I’d like to speak to you again.

[00:33:48] Michael: Mm-hmm.

[00:33:49] Ramit: I think we need to breathe. I want to allow you both to have some time. So I will speak to you again if you will do the following. A true debt payoff plan, selling your electronics and putting that money towards the debt. Ideally the principle, but any of it will be good. And then sitting down together, creating a Rich Life vision, and redoing your CSP.

[00:34:21] Michael: Okay.

[00:34:21] Ramit: On all of these things, I want Michael to take the lead, but Imani will be right there, hand in hand. She’ll just not be the first one mentioning it, scheduling it, leading it, but she’ll be there.

[00:34:34] Michael: All right.

[00:34:35] Ramit: How’s that sound?

[00:34:36] Michael: Sounds good. I got it wrote down.

[00:34:39] Ramit: Okay.

[00:34:40] Imani: It makes total sense, and it’s a rational way because I have a scientific, rational brain. So that helps me to think about, okay, I need to be thoughtful in how I approach it and put it back on him. I am not his parent.

[00:34:54] Ramit: I’d like to give you four weeks to make these changes.

[00:34:59] Michael: Okay.

[00:34:59] Ramit: Fast, but doable. That’s it. And that really forces like, hey, we got to sell this stuff. We got to get this thing paid off. We got to do this. We got to do that.

[00:35:09] Michael: Right.

[00:35:09] Ramit: But I know you can move. I know you can.

[00:35:11] Imani: I feel like we’ve talked to one another in a way today that has been a long time coming. Gives me hope. I feel like I saw something change in Michael, and so I’m hopeful. I’m cautiously optimistic.

[00:35:30] Ramit: Michael, anything I can answer for you?

[00:35:33] Michael: I know the work that I have to do. It’s going to be painful. It is.

[00:35:42] Ramit: Yeah.

[00:35:43] Michael: But I’m at that point now where I’m good and I believe Imani will be good.

[Narration]

[00:35:49] Ramit: I rarely invite guests back for a second session, but I wanted to, and I thought it was really important for a few reasons. Sometimes I can see the changes that they have to make are very large, and I can tell that if we end after one call, I don’t have the confidence that those changes would be meaningful. I also want accountability.

[00:36:07] Yes, Michael has a ton of work to do, especially as someone who, as he told me, hasn’t ever had a plan in his life. Having a deadline is going to hold him accountable. But Imani also needs to be held accountable as well. She has a lot of work to do on her own money psychology and her spending habit

[00:36:24] Next, Imani literally said she would consider leaving Michael if things don’t change. The stakes are high. I want to give them the best chance at success. And if you are in any sort of coaching, counseling, or therapy, you know that multiple sessions are very important to succeeding.

[00:36:41] Finally, we haven’t even had the opportunity to talk about retirement yet. We have a lot more work to do, and I want to share their financial information with our partners at Facet to get some real data in front of Imani and Michael on what is possible. Now I’ve given them a ton of work to do and only four weeks to accomplish it all. This change is not going to be easy, especially since they have spent 25 years cementing their roles. But let’s get back into it with Imani and Michael.

[Interview]

[00:37:08] Ramit: I’m so excited to see you again. I’ve been thinking about our conversation, so I was pumped when I saw that we get a chance to speak again today. First off, just in general, if you had to describe how you’re feeling right now before we get into all of it, what would you say. Imani, in one or two words, how do you feel right now?

[00:37:30] Imani: Excited.

[00:37:31] Ramit: Great. Michael?

[00:37:33] Michael:  Ecstatic.

[00:37:34] Ramit: Ecstatic. Whoa. All right. I like it. I don’t hear that word on this show too often. I’m excited to find out what’s going on. During our last conversation, Michael, you told me that you wanted someone to tell you what your options are.

[00:37:51] So we’re going to do some of that today. And I have some options from our friends at Facet. But before we get into that, did you complete the homework? Let’s go through them line by line. Let’s start with the debt payoff plan. Did you do a debt payoff plan?

[00:38:09] Michael: Yes, we did.

[00:38:11] Ramit: Who was the one who set up the conversation about the debt payoff plan?

[00:38:16] Michael: I understood the assignment, that I was supposed to take lead. So I think maybe a couple of days after that I said, “Okay, I got to make sure that I’m taking the lead. But we were all in agreement what we had and what our goals were.

[00:38:27] Ramit: Okay. Very good.

[00:38:29] Michael: The debt reduction plan was good.

[00:38:30] Imani: Michael took the lead more. He brought the big chart with all of our numbers. He brought it over to me and was like, “Okay, let’s go.” And so seeing him actually take the lead, and the conversation was non-confrontational, I was so proud of him. Seeing Him motivated, kept me motivated as opposed to me pulling him.

[00:38:54] I felt like we were going the path together as opposed to me getting upset and slamming stuff and sitting down and threatening him, and why can’t you do this? It was more of a conversation that we look forward to having because we have a plan that gets him to retirement.

[00:39:13] Ramit: Okay, fantastic. I got to give a round of applause. This is great. I love it. I love the progress. I love the attitude. The change in the conversational style and the intentionality, it’s like two thumbs up from me. I love it. Okay. With your current amount of debt, how long will it take for you to pay off the debt?

[00:39:38] Michael: So it’s projected to be paid off in 2030. I feel that we can accelerate that because some of the factors that we didn’t include in the debt reduction plan was like annual bonuses.

[00:39:51] Ramit: Uh-huh.

[00:39:53] Michael: So that’s not included in the bonus. They can average anywhere from 6 to 8% of my salary, which is substantial. But we didn’t. So we didn’t factor that in. And then other opportunities to bring cash in, i.e., sell electronics. So I think that would accelerate things a lot.

[00:40:13] Ramit: I love this. I love your strategy with your conservative estimates. Out of curiosity, can I take a look at that debt payoff plan?

[00:40:21] Michael: Sure.

[00:40:23] Ramit: Here’s what I’m looking at now. This is the actual plan. So at the top, they essentially had all the debts list listed out. So we’re now looking at how long it’s going to take to pay off the debt. And we have four months to pay off this first amount of debt.

[00:40:39] Imani: Mm-hmm.

[00:40:40] Ramit: Six months for the next one.

[00:40:42] Michael: Mm-hmm, mm-hmm.

[00:40:42] Ramit: All the way up to five years to pay off the 87,000-dollar debt.

[00:40:50] Michael: Right.

[00:40:50] Ramit: Okay. All right. I’m down with this. Total interest paid, $46,000. What does that feel like when you see that number?

[00:40:58] Imani: It’s a lot.

[00:40:58] Michael: That’s a lot.

[00:41:00] Imani: We want to get that paid off fast.

[00:41:02] Ramit: Yeah.

[00:41:02] Imani: I don’t want to pay $46,000 in extra–

[00:41:04] Ramit: I like when people hate interest. You should. But also, to me, it’s a reminder like, “Hey, we made some decisions, and we’re going to have to pay– we’re actually going to pay $46,000, maybe a little less if we accelerate things for our past decisions. But we can also get out of it.” Guys. I am incredibly impressed at that debt payoff plan. I got to give you a round of applause. That’s very impressive.

[00:41:26] Imani: We actually had to buy a dryer the other day, and normally we would panic, and it was like, “No, dryer’s not working. Let’s go get a dryer.” And we had money set aside to do that.

[00:41:38] Ramit: Wow. 

[00:41:39] Imani: So we went and bought a dryer, and now we’re getting back into the plan.

[00:41:42] Ramit: To me, I look at it in the way I feel, is every time you check one of those things off, you’re winning. So instead of losing all day and feeling horrible, you now get to win month after month after month. That is amazing.

[00:41:55] Michael: Yeah.

[00:41:55] Ramit: How much debt have you paid off since we last talked?

[00:42:01] Imani: It’s about six or so.

[00:42:03] Ramit: Six what?

[00:42:04] Imani: Thousand.

[00:42:04] Michael: 6,000.

[00:42:05] Ramit: $6,000 since we last talked?

[00:42:07] Imani: Mm-hmm.

[00:42:08] Michael: Yeah.

[00:42:10] Ramit: Damn.

[00:42:10] Imani: We’ve been focused.

[00:42:12] Ramit: Michael, how did it feel to be in charge of the debt payoff plan after years of letting Imani take the lead on the family finances?

[00:42:22] Michael: It felt good. I could see the change in her attitude. It’s like, yeah, we got this big cloud over us, but I can see it separating and spreading out a little bit and see a path through the cloud. So that was very enlightening, enjoyable to see.

[00:42:43] Ramit: Imani, what did it feel like for you to step back as Michael created the debt payoff plan?

[00:42:51] Imani: It’s hard. I’m a control freak. But it shows that I trust what he’s doing, and I trust the work that he’s putting in, and I appreciate it. So you have to let go and let people, right? They say, “Let go and let people show you.”

[00:43:12] Ramit: Yeah.

[00:43:13] Imani: And so that is his opportunity to show me. And so now I trust, okay, now we can do this. Now I will say that there’s sometimes when he’s looking at the account, he’s like, “What’s that?” I’m like, “Don’t ask me what I spent–“

[00:43:25] Ramit: Mm-hmm.

[00:43:25] Imani: But I’m like, “I get it.”

[00:43:28] Ramit: What do you tell yourself? What do you tell yourself at that moment, and what did you tell yourself when you were trying to give up a little bit of control in order for Michael to take the lead?

[00:43:37] Imani: Let go. Let go.

[00:43:39] Ramit: That’s what you said?

[00:43:40] Imani: You don’t have to. Yeah. I literally said, okay, he’s got it. I got to let him have it. Michael’s got to step up. That was the assignment. And if he’s willing to do that, then I need to let him do that.

[00:43:52] Ramit: I like that. I hope everybody listening can see and can hear from the two of you how quickly you can make life-altering changes. It doesn’t have to take 10 years. It doesn’t. It could be literally a week, and you could change your life completely. Michael, what happened with the electronics? Where are you in the process of selling those things?

[00:44:16] Michael: Last week I think I made $3,000 off of selling electronics. This week, as of yesterday, camera equipment, I got a quote for $4,000.

[00:44:30] Ramit: What? Are you serious?

[00:44:32] Michael: Yeah.

[00:44:32] Ramit: Whoa.

[00:44:33] Michael: That’s going to ship on Saturday. We’re going to ship that out–

[00:44:36] Ramit: Wait, this is awesome. I don’t think anyone in America has ever seen me smile before. This is the first time I’ve ever been publicly photographed smiling. I can’t believe it.

[00:44:47] Imani: He’s paid off. That’s how we got rid of the buy now, pay later debt. It was almost 4,000. And we’re going to the next biggest that we need to get some wiggle room in our CSP. So we’re going to tackle that with that 4,000. That’s going to wipe out something big on here.

[00:45:08] Ramit: Honestly, phenomenal. Phenomenal. What you just said, I especially love it, the way that you took what we talked about and you adapted it for your own needs. Michael, when we talked, you dropped how many laptops you have and cameras and all this stuff. I’d never heard anybody have that much electronic stuff. What got you to look at those things in a different way and decide, I’m going to sell them?

[00:45:35] Michael: To be truthful, after our conversation, I got pissed off.

[00:45:42] Ramit: Yeah?

[00:45:43] Michael: Yeah.

[00:45:44] Ramit: Tell me.

[00:45:44] Michael: I’m like, “This ridiculous.”

[00:45:47] Well, this is the first phase of what’s going to be sold, first phase.

[00:46:02] I got the fever to start selling stuff. So now I can’t stop.

[00:46:06] Ramit: Wow. It’s amazing. What was it, 10 laptops, something like that?

[00:46:13] Michael: Yeah, it was 10 laptops. And I still got plenty of head room to sell more.

[00:46:16] Ramit: How many do you have?

[00:46:18] Michael: I probably got about another 10 or 15,000 to sell?

[00:46:21] Ramit: What? What are going to do with the money?

[00:46:24] Michael: Oh, we’re going to pay off debt.

[00:46:29] Ramit: This is amazing.

[00:46:30] Imani: Yeah, I’m just super proud of Michael.

[Narration]  

[00:46:33] Ramit: This is one of my favorite parts of my job. It is incredible and also rare to get to talk to someone after they have made massive life changes. You have to understand how hard it is to actually make a major change in life. When someone cuts their grocery spending by $300 a month, I don’t just see a number. I see someone recalibrating their role, reassessing their very identity, and making decisions in a way they have never made before.

[00:47:04] Michael did this and more, this guy spent 20 years buying computers, filling up rooms with gadgets and building an identity around them. Four weeks ago, he said, “I can get rid of stuff.” I thought, all right. I’ll take you at your word, but let’s see if you actually follow through. Not only did he follow through, he actually found joy in the process. He turned what was once a weakness into a strength. That is advanced level thinking.

[00:47:31] If you have help to make a major life change, you will be shocked at the results you can get. You can literally change your life in less than three months. That’s exactly what we do in our money coaching program. If you are ready to take control of your money, pay off debt, start investing, make sure your money is going where you want it to go, join my money coaching program at iwt.com/moneycoaching.

[Interview]

[00:47:54] Ramit: Okay. Is there anything else left to sell that we have not yet talked about?

[00:47:58] Imani: The only thing now for me to look at is do I have too many clothes in my closet, and do I need to set up a Poshmark store? So that’s what I’m going to look at.

[00:48:07] Ramit: You want me to tell you the answer? It’s a yes or no. I’ll tell you in five seconds.

[00:48:10] Imani: Tell me.

[00:48:10] Ramit: Just show me the camera. Take it in the closet. We’ll decide right now.

[00:48:14] Imani: Oh God. The closet isn’t– you mean like go in my bedroom?

[00:48:18] Ramit: Yeah.

[00:48:19] Imani: Okay.

[00:48:19] Ramit: Take the camera. Whoa. Is this a big old walk-in closet?

[00:48:23] Imani: It is

[00:48:24] Michael: Yeah. it is.

[00:48:24] Ramit: Oh.

[00:48:25] Michael: And it’s full.

[00:48:25] Ramit: Let me describe what I’m looking at please. Just very slowly. Very slowly. So we have a large walk-in closet with two rows of clothes. They are full, absolutely full. She just panned down and I’m seeing the number of shoes here. All right, we got damn near 35 pairs of shoes. She was very careful not to go up. Oh. God, I love my life. Okay, I see some bags up there, lots of colors. I see blue, red. I see a green blazer on the rack. I see a leopard print.

[00:49:03] Imani: I don’t know if I want the answer.

[00:49:08] Ramit: Well, my wife is a personal stylist, and she’s done this for hundreds and hundreds of clients, including many successful women. So I’m not going to speak for her. I’ll just speak for myself. I would say probably yes. What if, just as a thought experiment, and we can just hang for just one more second. What if you got rid of 50% of your clothes?

[00:49:28] Imani: Oh, that would be so traumatic because I’ve done that before. I had a stylist come in, and I got rid of–

[00:49:33] Ramit: And then?

[00:49:34] Imani: I got rid of 75% of my clothes.

[00:49:36] Ramit: Okay, I love it.

[00:49:37] Imani: What happened?

[00:49:38] Ramit: Oh, you bought it back. All right. You could take us back to the other room. Thank you very much. And a big round of applause for showing us that closet. That was cool. It actually tells me so much, and I really appreciate it. All right. So Imani, you said something interesting. You said, that would be traumatic if I had to sell 50% of my clothes. It’s interesting because Michael has 10 laptops and he’s probably going to end up selling, how many of them, Michael?

[00:50:02] Michael: So we definitely would get down to two.

[00:50:04] Imani: I seriously did that. I have pictures of my closet when we did that.

[00:50:08] Ramit: Yeah.

[00:50:08] Imani: So maybe. Maybe I’ll try again. What is off limits are the Converse sneakers. I’m not selling any of those.

[00:50:16] Ramit: I saw quite a few of those. How many would you say you have?

[00:50:19] Imani: 20 pair. 20 pair.

[00:50:21] Ramit: All right.

[00:50:22] Imani: Yeah. That’s my thing. It’s my thing.

[00:50:23] Ramit: All right. This a remarkable parallel between Michael’s computers and Imani’s shoes, although the price is a little different. Michael, you want to say anything right now or no?

[00:50:38] Michael: No, I’m giving her role. I’m sure she’s going to make the right decision, what she can live and can’t live with.

[00:50:47] Ramit: All right. I respect it. Cool. Well, listen, you don’t have to sell. Nobody has to do anything. Very interesting. Go ahead.

[00:50:55] Imani: The other thing for me is looking around and how we did so much with less as we were growing up. And society will tell you, and social media will tell you that you have to have the newest, brightest, shiniest thing. And through this process, I’m realizing that that’s not the stuff that makes me happy.

[00:51:15] Ramit: Last time that we spoke, we talked about your visions of a Rich Life, and there were two different visions that emerged from our conversation. Michael, you wanted simplicity and decluttering. Imani, you wanted travel and shared expenses.

[00:51:32] So as part of the homework, I asked you to come up each with a detailed vision of your Rich Life and then speak about them together. First just checking in, did you complete the exercise? Imani first, then Michael?

[00:51:48] Imani: We did. We arrived at a shared vision of owning a place outside of America like Panama. We actually talked about Panama because Michael lived in Panama when he was in the military. So we have actively been talking to friends that live and that have condos in other places. And so that’s a part of our Rich Life. It is decluttering, getting things sold, like he’s doing.

[00:52:16] Ramit: Mm-hmm.

[00:52:17] Imani: Getting things cleaned out. And when he retires and I’m location independent, we’re going to look at putting that plan into action. So as we pay off debt, look at how do we get to the point where we can buy a place in a location like a Panama or a Costa Rica or a Cartagena, somewhere in that area of the world in order to live.

[00:52:42] Michael: It’s a shared vision. Definitely decluttering, selling, and again, living abroad and not have to worry about, well, I have a house full of stuff here that I got to worry about.

[00:52:59] Ramit: Great. Love it. Okay, wow. This is quite a bit of a shared vision, different than when we talked last time, which I love. Decluttering fits in because you can’t make it happen unless you declutter a bunch of stuff. Decluttering also helps get you there faster.

[00:53:15] Michael: Mm-hmm.

[00:53:16] Imani: I really think the last conversation, after we had the conversation, thinking about the time where I said I’m going to tap out, I think that affected him a lot. I didn’t mean to come off that way, but I think for Michael, he’s one of those people that you have to find something that moves him emotionally.

[00:53:38] And for me, I was just exhausted. I felt like he wasn’t hearing me. And I think after our conversation, I’m like, “Oh, he’s starting to hear me. He understands what’s at stake here.” Because I don’t want to do this anymore. I’m tired of doing this. Because you ask what’s going to change? And I see the change.

[00:53:59] And it’s been sustainable. He’s like, “Can you mail this for me? Can you get a box?” And I’m running around trying to find boxes to mail stuff. And as much as I’m like, uh, I’m like, but it’s good. Keep doing it. Let’s keep this up. Let’s keep this up. So I’m excited that we are moving toward a vision.

[00:54:21] Ramit: Michael, what did you learn about Imani’s dreams through this process and through our last conversation?

[00:54:29] Michael: She wants to explore. She wants to go out and see some more of the world.

[00:54:34] Ramit: Michael, when we talked last, you had trouble coming up with your own dreams. If I were to ask you today, what are some of your dreams, what would you say?

[00:54:48] Michael: My dream, stress-free life.

[00:54:51] Ramit: Mm-hmm.

[00:54:52] Michael: Not being surrounded by clutter, and to get into a position financially where I can reach out and help others.

[00:55:07] Ramit: What does that mean?

[00:55:09] Michael: I have nieces and nephews and other family members that haven’t had some of the opportunities and money. And myself I’ve had. So it’d be pretty neat to pay for them to go on a trip to somewhere like the Grand Canyon. Or maybe take a trip to Jamaica.

[00:55:34] Ramit: Mm-hmm.

[00:55:36] Michael: Because financially they’re not in a position to do that. So I think that would be pretty cool.

[00:55:40] Ramit: Hmm. My mind is turning right now. I love the vision between the two of you. Starting to create a dream together. This vacation home that you may have. Traveling abroad. It’s just getting my wheels turning, that Michael, I love your vision.

[00:55:59] And what a beautiful cherry on top that when the debt is paid off, perhaps after the two of you have gone on a couple of international trips, just the two of you– look at Imani’s face. Look at that smile. Then and only then do you perhaps say, we’d like to invite a couple of our nephews and nieces with us. You two could be the cool travel relatives. That would be [Bleep] awesome. But y’all come first. Can we take a look at your revised conscious spending plan?

[00:56:34] Imani: Sure.

[00:56:34] Michael: Sure.

[00:56:35] Ramit: All right. You sent this over. I’ve been very interested to take a look at this. This is the one that you changed based on our conversations. All right. So I assume your net worth has not changed much. Maybe you dropped the debt a little bit. Correct?

[00:56:55] Imani: It’s actually changed quite a bit.

[00:56:56] Ramit: Oh, tell me.

[00:56:58] Imani: Because our investments went up quite a bit.

[00:57:01] Ramit: Okay. We got to take it from the top then. Read me off the word in bold and the number in full next to it, please.

[00:57:07] Imani: Okay. Assets 603,315, which is car, home property, and business. Investments, $795,005. Savings, 8,523. That’s a little low, but we’re working on it.

[00:57:23] Ramit: Mm-hmm.

[00:57:24] Imani: And our debt’s 590,486. I think that’s changed by about– because it was over 600 before.

[00:57:31] Ramit: Whoa. So with a total net worth of $816,000, what does that feel like to you?

[00:57:40] Imani: Amazing. Look, we are going to be at a million and once we pay this debt down– if we had no debt, If we had just the mortgage, we’d be well over a million today.

[00:57:50] Michael: Yeah.

[00:57:51] Imani: And what I’m looking at– I look at a lot of financial calculators and things like that, and they say the longest time is to make the 100,000 and then after that it compounds. So I’m like, the compounding of the numbers is what I’m going after. I opened up a little Roth thing on the side since our last conversation that I’m putting a little bit of money in, a little bit stock.

[00:58:14] Ramit: Great.

[00:58:16] Imani: I’m excited seeing that those values change. So looking at how do we wipe the debt out so that our net worth continues to rise?

[00:58:27] Michael: Right, right.

[00:58:28] Ramit: Your net worth since we last spoke four weeks ago has increased by $28,000.

[00:58:35] Michael: Wow.

[00:58:36] Ramit: Can we give a round of applause here? That is amazing. So basically on the net worth side, investments went up. Debt went down. Fantastic. All right. Well done. Let’s continue moving along. Your fixed costs, 79%.

[00:58:58] Imani: It’s down a little.

[00:58:59] Ramit: Yeah. I believe it was 83% last time.

[00:59:02] Michael: Yeah, I think so. Yeah.

[00:59:04] Ramit: So 79% is still pretty high, but we’re going in the right direction.

[00:59:10] Imani: Mm-hmm.

[00:59:10] Ramit: Looking at your fixed cost changes, I notice a couple of other things. You’re paying a little bit more towards your debt, which makes sense. You have cut your grocery spend by $500 a month. Exactly to your point, Imani. We’re being more economical. We’re actually using what we buy. Great. You cut your clothes spend by 200 bucks a month. So what is that? No more clothes for a while?

[00:59:35] Imani: Do I need them?

[00:59:36] Ramit: Exactly. Well done. Love that. You cut your subscriptions by 30. What’d you cut for 30 bucks?

[00:59:42] Imani: It was some podcast thing that I was subscribing to to learn how to be a reseller. I already learned enough.

[00:59:49] Ramit: Exactly, enough. I was like, “Wait, do we have a premium membership, and my own guest just canceled our own membership? It’s going to happen one day.

[00:59:57] Michael: Yeah.

[00:59:57] Ramit: So you brought your fixed cost down by $621 a month, which brought you from 83 to 79%. Not bad. Not bad. Going in the right direction. What is remarkable is how easy it is to reduce grocery spend. And again, most people don’t shop to a number. When they finally do, they can cut it by off in hundreds of dollars. Okay, great. Investments went up to 3%. From 1% to 3%. Okay. Not bad. Total investments went up by about 300 bucks a month. Okay, fine. Savings went up by $300 a month. How’d you do that?

[01:00:36] Imani: We just reallocated some of the grocery money and we said, “We need to be putting things aside for savings.” Things like the dryer, right?

[01:00:44] Ramit: Nice.

[01:00:45] Michael: Yeah.

[01:00:45] Imani: So I don’t have to put that on a credit card so that the debt goes up.

[01:00:48] Michael: Instead of me taking $100, me taking only 60 or $70 less.

[01:00:54] Ramit: Great.

[01:00:54] Michael: That’s $120 a month right there.

[01:00:56] Ramit: Mm-hmm. It really does add up. Especially my favorite word of all that was we just reallocated. That’s exactly what it is. Some of this stuff should be so simple. It’s like flipping a switch. That’s basically money. Once you set your infrastructure up, I flipped this. I flipped that. Oh, I added an extra $675,000 to my net worth by the time I’m 72 years old. How? I flipped a switch. That’s the approach we are getting to. Okay, great.

[01:01:21] Imani: Mm-hmm.

[01:01:23] Ramit: You are paying a total of $5,400 a month towards debt.

[01:01:29] Michael: Yeah.

[01:01:31] Ramit: Pretty aggressive. And you’ve made your plan. You know you’re debt-free by 2030.

[01:01:37] Michael: Mm-hmm.

[01:01:38] Ramit: How do you feel about it?

[01:01:40] Imani: Great.

[01:01:40] Michael: I think it’s great.

[01:01:42] Imani: Again, that’s the conservative, right?

[01:01:44] Ramit: Mm-hmm.

[01:01:44] Imani: There’s some levers in there. There’s an investment that I have. It’ll come back, and it’ll be $30,000. And so things like that, plus the electronics, plus the Poshmark sale of clothes, that kind of stuff will start to accelerate that 2030. I want to get that to like 2028.

[01:02:04] Ramit: I think it’s possible. I think it’s very possible. When you really are both partners dialed in, it’s like you’re both rowing a boat together, you can go faster further than you ever thought possible. Things like bonuses, selling things, it becomes this upward spiral. It’s just awesome. Okay, love it. I’d actually like to give you some options today.

[01:02:28] Michael: Okay, cool.

[01:02:28] Ramit: These options are from our partners at Facet, and Facet created three retirement scenarios for you.

[01:02:37] Michael: Okay, great.

[Narration]

[01:02:38] Ramit: I want to jump in quickly, give a little context on the information that we shared with Facet so you can understand how a financial advisor can craft these scenarios. Because I think it’s helpful to understand what you are about to see. We asked Imani and Michael to provide a list of their investment accounts and balances, a breakdown of their debt by type, amount, and interest rate, their desired retirement ages– which 62 for Imani, 67 for Michael– and their expected pension and Social Security amounts.

[01:03:07] This is basically what any financial advisor would ask you to share if you are considering working with them. We also shared Imani and Michael’s original CSP so that Facet could get an idea of their monthly spending. Now, let’s check out these scenarios.[Interview]

[01:03:21] Ramit: To your credit, you have created a debt payoff plan. So you know that your fixed costs are artificially high because you’re paying so aggressively towards your debt. But I’d like to give you three scenarios now that Facet prepared for you. Tell me which scenario sounds interesting to you.

[01:03:40] Michael: Sure.

[01:03:41] Ramit: Scenario one, we’ll call this the baseline scenario. Imani, in this scenario, you retire at age 62. Michael retires at age 67. Your spending stays the same as it was on your original conscious spending plan. So far so good. The problem is your assets are depleted by 2059 when Imani is aged 85 and Michael is age 98.

[01:04:13] In other words, you run out of money in retirement. How do y’all feel about that? And Michael says like, “What do I care? I’m gone.” Meanwhile, Imani’s over here shaking her head, not for me.

[01:04:26] Michael: Yeah, I think Ramit reads minds. Yeah.

[01:04:32] Ramit: I’m going to take that as a no.

[01:04:34] Michael: No, no, no.

[01:04:36] Ramit: But I just want to point out that that’s the baseline that you would have been. You would’ve run out of money. And in fact, without changes, it’s possible you could still run out of money. So I want you to be aware of this.

[01:04:48]  Scenario 2. We delay Michael’s retirement by one year and we reduce spending now. Let me walk you through the details. In scenario 2, Imani retires at 62. Michael retires at age 68. He’s delayed by one year for retirement. Your 401(k) contributions are reduced to the minimum just to get the match.

[01:05:16] And if a match is available, take it for now. That spare cash is redirected to an emergency fund and then high-interest debt. You reduce your guilt-free spending to $800 per month. You reduce your joint spending by $500 a month. You’ve actually already done that in the new CSP.

[01:05:48] Facet recommended something that I wanted to bring to your attention. They said if the son’s expenses, like food, utilities, and subscriptions are included, they can and should start participating in household expenses as they are 21 and 25 years old. If you followed these suggestions, your assets will last through Imani being 95 years old. How do you feel about this scenario?

[01:06:25] Imani: I like that scenario better. Definitely better. Yeah, because longevity is in my genes. My grandma has 91.

[01:06:33] Ramit: It’s very good to know.

[01:06:34] Michael: Yeah. And my mom is 84.

[01:06:36] Ramit: Mm-hmm. Michael, what do you think about this scenario 2?

[01:06:40] Michael: Very doable.

[01:06:41] Ramit: It’s doable.

[01:06:42] Michael: Yeah.

[01:06:43] Ramit: The thing I noticed is you’d have to reduce your guilt-free spending to $800 a month total. Right now you are at 1,425.

[01:06:54] Michael: Yeah. I think we definitely could do it.

[01:06:57] Imani: We can do that. We just have to do more free things, like go to the park, go to the museum.

[01:07:06] Ramit: It’s doable.

[01:07:06] Imani: [Inaudible] friend’s houses. Yeah.

[01:07:08] Michael: Yeah, yeah. And it doesn’t take into account that– the selling thing, I honestly think we have another maybe 8,000, $9,000.

[01:07:21] Ramit: I think that will help a lot. I think what that does is that allows you to pay off some of this high-interest debt quick, which actually saves you a lot of money downstream in interest payments. And so that’s why I love that. You’re in a big hurry. Get this stuff sold. Get it out and pay that debt off quickly. I love that. Michael, scenario 2 would require you to cut your personal spending pretty dramatically. How do you feel about that?

[01:07:49] Michael: I’m good with it.

[01:07:50] Ramit: Okay. And Imani, how do you think this would change your day-to-day life?

[01:07:56] Imani: I don’t think it’ll change it too much. I’ll just engage the boys, and I think the conversation with them about participating in the household finances and contributing, I think it’s fair. It’s a fair conversation.

[01:08:08] Ramit: Would you be willing to ask them to contribute some amount?

[01:08:13] Imani: Yeah. Yeah, definitely.

[01:08:15] Ramit: Great.

[01:08:15] Imani: I’ve said it to the oldest one several times, and he just gives me that goofy look.

[01:08:19] Ramit: That doesn’t work on me. If it doesn’t work for you, give me a call. I love telling kids no. All right. Let’s go on to scenario 3. Delay retirement and add $15,000 for travel and experiences. Let’s talk about this one. In this case, Imani retires at age 62. Michael retires at age 70, meaning he delays his retirement by three years.

[01:08:51] Michael and Imani each spend $400 monthly on guilt-free spending, personal needs, etc. Joint spending. Would be reduced by $500, which you’ve already done in your new CSP. 401(k) contributions, reduce them to the minimum for the match, if you have one available for now. Use that for an emergency fund and then high-interest debt.

[01:09:18] What this would allow you to do is to spend an additional $15,000 every single year on travel, starting at Michael’s age 70 until Imani’s age 80. That is 23 years in total. And look at Imani’s face. Imani is saying, “What’d you just say?” I’ll read it back again. This would allow you to spend an additional $15,000 annually on travel starting at Michael’s age 70 until Iman’s age 80, which is a total of 23 years. And your assets would last until Imani turns 95 years old. What do you think?

[01:10:18] Look at Imani’s face. Imani is saying, what’d you just say? I’ll read it back again. This would allow you to spend an additional $15,000 annually on travel starting at Michael’s age 70 until Iman’s age 80, which is a total of 23 years, and your assets would last until Imani turns 95 years old. What do you think?

[01:10:55] Imani: Wow. That’s a lot of– that’s a little first-class travel in there.

[01:11:02] Ramit: What’s the trade off? How did you get to be able to do that? Did you catch it?

[01:11:08] Imani: Yes. We had to cut our spending.

[01:11:10] Michael: Work longer.

[01:11:11] Imani: Michael had to work three years long. I didn’t have to work any longer. Michael had to work three years longer.

[01:11:16] Ramit: Yes.

[01:11:16] Michael: Mm-hmm.

[01:11:18] Ramit: We’re really starting to think about mortality here, quality of life. 70 years old. Traveling from 70 to 75, 76, 80 years old, etc. There are trade-offs to consider. People get injured. People get sick, etc. So we want to think about all these things. But just off the cuff, how does it strike you? Imani loves the idea of travel. I can tell that.

[01:11:43] Michael: Mm-hmm.

[01:11:44] Ramit: Michael, how do you feel about working until age 70?

[01:11:49] Michael: I’m good with it. Probably not in the capacity that I’m doing it right now.

[01:11:55] Imani: I think it’s viable as well. Me retiring at 62, when I look at the Social Security, that’s the minimum amount I would get. It would behoove me to work a little longer. If I’m still doing a remote job like I do now, that’s great. If not, I hope to be doing something that I truly love by that point and it won’t be like work.

[01:12:25] Something like you do, Ramit, enjoy and help people and be able to make my own schedule. That’s great. So I think it’s doable. I honestly think it’s doable. I don’t know that I want him to have to work till 70 though. I don’t think I want him to have to work to 70.

[01:12:48] Ramit: You have cards to play. I have this philosophy in business, which is live to fight another day. And what it means is just always have a plan B, a plan C, a plan D. Live to fight another day. And I think that you have a lot of cards to play. You have bonuses. You have expense reduction.

[01:13:11] You have your sons who should definitely be contributing financially, which would dramatically change the contours of your financial situation, especially if they were charged– you don’t have to charge them full market rate, but you charge them something, and put that towards debt, etc.

[01:13:30] You have cards to play, a lot of them. It probably takes thinking about now that you’ve created your debt payoff plan and you see how quickly you can make progress, now it’s time to go to the next concentric circle, the next layer of making decisions. What kind of life do we want to lead? As we get older, as we get into this next chapter of life, what is our life going to look like?

[01:13:56] And that’s when you start making these kind of trade-offs. Is Michael going to work until 67, 68, 70? How do we see our life going? Do we want to wait until 70 to travel, or do we want to bake in a little trip here and a little trip there? And if so, let’s actually map it out. That’s how I would think about it.

[01:14:16] Michael: Right.

[01:14:16] Ramit: Go ahead, Michael.

[01:14:17] Michael: Definitely, I want to travel now. I think one of the things that Imani and I have talked about is, so in 2027 is my full retirement age year for Social Security. And in May I will be 67, so I’ll be at full retirement age. I could draw my full Social Security plus my military pension plus consult, and not be penalized Social Security wise.

[01:14:47] That’s another factor that we have to factor into it too. Do we go with option B, or do we go with option C, which is work longer? Hopefully the plan is get this debt paid off by selling and be in a position where we can say, “Okay, option B is the best option.”

[01:15:08] Ramit: Got it. So Michael, for you, option B is the one that you would choose if you could choose?

[01:15:15] Michael: Yes.

[01:15:16] Ramit: Okay, great. And Imani, what about you?

[01:15:18] Imani: I think option B for the reason of, I don’t want him to have to work till 70. I like the idea of travel, but like you said, there are levers we can pull and bake in the travel. I want to bake in the travel before then. It doesn’t have to be a 15,000-dollar trip. It could be one 5,000-dollar trip a year. Take a cruise or take a driving trip. But be intentional about planning the time with each other and our families to just connect.

[01:15:56] Ramit: I love that. I think you could do it. I think you can more than do it. More than do it.

[01:16:03] Michael: I think so. I think so too.

[01:16:06] Imani: I agree. I think it’ll be great for him to be able to retire and for us to have a good plan to, like you said, pay off high-interest debt, to some away. The emergency fund, building that up. I like that. Everybody tells you, max out your 401(k), max out your 401(k), max out your 401(k). I get it right.

[01:16:29] I wish I had done that when I was younger and didn’t have a whole lot of debt. But the best time to start is now. And so backing that back down to stock some of that money aside and build up that $8,500 that we got and save it. I want that to be 100,000 set aside.

[01:16:47] And then to be able to handle any type of things that come our way or emergencies. With that kind of money, you can help people. We talked about being able to take a vacation. We can grab a little something off of there and figure out what does it look like to take a family vacation, and how do we plan that out and all of that? I like the idea of getting the boys involved and contributing to the household.

[01:17:15] Ramit: Your boys are lucky to have you. That you can give them the room to be able to kickstart their lives and have a little bit of ease in getting into it. I think a lot of people would love to be able to have that. So I totally appreciate whatever decision you make with your sons.

[01:17:33] Whether or not they financially contribute today or tomorrow to your family finances, you have many other levers to pull. Many. It’s the bonuses. It’s the work. It’s the guilt-free spending. Knocking one debt down after another and effectively reallocating extra dollars when they become available.

[01:17:56] I don’t have any doubt you can do it because you’re already doing it right now since we talked four weeks ago. So I’m loving it. I’m very confident in the two of you. Imani, before we met, this is what you wrote on your application “I want to separate our finances. In fact, I am so upset that I suggested we combine them four years ago.” How do you feel hearing that back now?

[01:18:25] Imani: I don’t feel that way anymore. For the vast majority of our marriage, we had separate accounts, and we paid the bills out of a joint account. I think combining them makes you accountable to one another in a different way. But now we still have little separate things. Like, based on our conversation with you, everybody has to have some separate money that they can do what they need to do with.

[01:18:48] But for me, again, it was the control thing. It was Michael’s hiding something over here from me. I need to get my hands on everything to see what’s coming in because I know he’s hiding something over there.

[01:19:00] And I think that seeing the change and building that level of trust back. So yeah, I felt that way 4, 5, 6– whenever I put the application, I felt that way. I was like this, like I told you, “If this didn’t change, I was tapping.” And I felt that.

[01:19:22] Ramit: Yeah.

[01:19:23] Imani: I felt that. But I don’t feel that anymore. You’re stuck with me, [Inaudible].

[01:19:27] Ramit: How do you feel now, Imani, if you had to describe it in a couple of words?

[01:19:31] Imani: I feel excited. I feel inspired. I feel energized. Michael said something to the effect that he wanted to be the man that I married. I think he’s getting back to that man. For a while there I was like, I don’t know who this joker is over here.

[01:19:50] Ramit: What about you, Michael? How do you feel now versus when we first started talking on our first conversation?

[01:20:00] Michael: What’s exciting for me, Ramit, is I enjoy selling as much as I did buying it.

[01:20:08] Ramit: That is interesting.

[01:20:11] Michael: That was scary.

[01:20:13] Ramit: Wow.

[01:20:14] Michael: I was like, “I like doing this.” And when the money started coming in, I’m like, “Wow, this feels good.”

[01:20:23] Ramit: That’s pretty interesting.

[01:20:24] Michael: Yeah.

[01:20:24] Ramit: I think that next level is one you’ve already tapped into, putting together the plan and paying off debt, and investing. And then the ultimate level is defining our Rich Life and actually starting to go down that list of things in our Rich Life.

[01:20:39] Michael: Yes.

[01:20:40] Ramit: Ooh, that’s a beautiful transition.

[01:20:43] Imani: It was thinking back to childhood and the reason why I approach things the way that I do was the dynamic between my parents. My mom handled the money, did all the things. But I know that in order to change our future, I’ve got to let him be a partner and not someone that I’m pulling along for the ride.

[01:21:10] This is his life too. So the things that I wanted to see differently play out in my marriage, I can do that. We can have those conversations. And again, if he’s willing to make the change, then I have to be supportive to allow him to do that. Now, if he wasn’t willing to make the change, then I can make a decision based on that as well. Fortunately for us, he decided to be with the program.

[01:21:36] Ramit: Yeah.

[Narration]

[01:21:37] Ramit: Wow. What a transformation. This is what happens when two people come together with a shared vision for their Rich Life. Just a few weeks ago, Imani was feeling disconnected and actually unsure about her future with Michael. Today, she’s smiling. She’s connected. You can see how money goes far deeper than the numbers alone.

[01:22:01] Guys, this is why talking about budgets misses the point. Yes, math is important. Numbers matter. But that’s table stakes. Real transformations happen when you create a powerful vision for your life, whether it’s traveling the world or retiring early, or simply staying together and thriving as a couple.

[01:22:23] Do you remember that at first Michael didn’t even see a path to retirement? He wasn’t sure if he could pay off his debt before he died. But once they saw their options laid out clearly, something amazing happened. They started working together to decide what the right path would be.

[01:22:40] This is how a tool like Facet can completely change the game for someone who feels stuck or unsure. Now, when you’re younger, you can afford to be a little loose with your assumptions. Save 10%. Invest 10%. You’ll probably be fine. But as you get closer to retirement, precision becomes critical.

[01:22:58] And that’s where Facet comes in. They helped Imani and Michael map out specific scenarios, how much they would need to save, what would happen if they retired early, how to balance their spending today with their future goals. It’s like walking into an empty house and suddenly seeing where everything fits. Suddenly the decisions they were making started to make sense.

[01:23:20] On a personal level, I am extremely impressed with the work that they did. Sure, it’s going to be a long road, but now they are doing it as a team. So a huge thank you to Imani and Michael for sharing their journey, not once, but twice, and most importantly, for putting in the work to get where they are today.

[01:23:37] If you are ready to take control of your financial future, head over to facet.com/ramit. Facet is waiving their $250 enrollment fee for new annual members. And for my audience. They’re offering $300 in your brokerage account if you invest and maintain $5,000 within your first 90 days. Don’t wait. Start building your Rich Life today.

[01:23:59] Facet is an SEC registered investment advisor. Investing involves serious risks and past performance is not a guarantee of future performance or success. I’m not a member of Facet. I have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation based on this endorsement. My opinions are included and should not be interpreted as a recommendation or research regarding any investment or investment strategy, legal or tax advice.

[01:24:21] Imani: Hi. Imani here with our four-week post Ramit update. Michael and I have been hard at work, selling some of his electronics collection and paying off some of the debt. We have paid off over $10,000 using the funds from those sales. We’ve also stopped contributing to our kids’ 529 accounts and actually used one of those to pay down about $7,000 off of my student loan debt.

[01:24:50] So that’s been great. Getting some momentum there. We are meeting this weekend to have our money discussion led by Michael to talk about our plans for the rest of the year and starting off 2026, what we’re going to pay off, how are we going to pay it off. Generate some ideas of ways to bring in some extra income so that we can get things paid off faster.

[01:25:12] We’re also going to plan a vacation with some friends next year and set aside money in a separate account to save for that. So overall, what I learned in our process is that we have the finances to be able to dig ourselves out of this hole. We just have to work together and come up with what our vision for Rich Life looks like.

[01:25:35] And also I was affirmed through talking with Ramit about the fact that I do know what I’m talking about. I’ve done the research. I read the books. And that it is okay for us to learn how to work together to get back to a good financial place. I’m excited for the future, and I’m so grateful for all the advice that Ramit gave us. Thanks.

[01:25:57] Ramit: If you enjoyed this episode, here is the next episode you should watch right now.