248. "Her spending scares me. Should we get married?"

Does this sound like you? You want to retire in the next five years, but you're wondering if you have enough. Do you have enough saved? What if something unexpected happens? Can you actually travel the way you want in your retirement? If this is you, I want to help. You can apply to get coached for free on this podcast. Apply today at IWT.com slash apply. That's IWT.com slash apply. You're going to move in together. You're going to get married. What are we doing here? I guess the problem is I don't agree with how she spends money. And I don't agree with how she wants to hoard money and not live life. That's extreme. I'm definitely on defense. It feels like micromanagement. Say we got married, then I owe $379,000 in debt. My salary is not going to be able to take care of all that. We're going to be in a world of hurt. It scares me. You have zero in savings. True. How much did the basement cost? Oh, it was $100,000. What the? She doesn't see that there is a problem, so there's nothing to fix. I need you to set the standard for yourself higher. I'm not here to fix you. Only you can fix your situation. Are the two of you financially compatible? I don't know. Listen to this line from her application. We haven't been able to take the next step in our relationship because we don't see eye to eye on money. It has been a roadblock that has almost led to a breakup. Today I'm speaking with Cree and April. They're 46 and 48 years old. They've been together for five years and they hope to move in together in the next few months. But just like Cree mentioned in her application, the difference in how they view money has led to hesitation on what they should do next. Cree is debt averse and she's been quietly, methodically building her wealth. April is earning more than twice what Cree earns, but she's in debt. She's got zero savings and she fights over how she manages her money. They're talking to me in part today because they are facing a crossroads as they discuss moving in together and potentially combining their lives. Now, what would you do? Before we get to today's conversation, tell me in the comments below if you were in a relationship where your partner had a high income, but no savings and lots of debt, what would you do? Would you move in together? Would you walk away? What conversation would you have? And be honest. Tell me exactly what you would really do. Remember, they love each other or else they wouldn't be here sharing their personal details with millions of people. And I want to give a warm welcome to all of the new listeners of Money for Couples. Please know that I read every single comment that you post, and I love to hear feedback from my community. My team and I have built a special culture in this community that I want to share with you. We are respectful of my guests. They show a lot of courage to come on this show and share their numbers. We have high expectations for people because we've seen how fast people can change, but we also have compassion because we know that changing is hard and we know that it's easy to judge people. But before we leave some comment, that's really mean. We always ask ourselves, would I be willing to share the most intimate part of my relationship with millions of people on this show? So a big welcome to all of our new and returning listeners. I love having you as part of our community. Now I'm looking at their conscious spending plans. They keep their money separate. And so they each filled out one individually. If you want my help with your own CSP, you can join my money coaching program at iwt.com slash money coaching assets, $395,000 for Cree $329,000 for April investments, $62,000 for Cree, $20,000 for April savings, 26,000 for Cree zero for April. That's interesting. Debt, 133,000 for Cree, 379,000 for April total net worth, $350,000 for Cree, negative $30,000 for April. Now there's some pretty big clues in how each of them handle their money already. Just from those numbers, the real question that I want to know is, are they financially compatible and what should they do next? Let's find out. Cree, in your application, you wrote something that caught my eye. You said, she's a spender and I'm a saver. She makes more money than me, but I've saved more. We want to move in together, but I'm scared that our money differences will cause problems. What are you afraid will happen if you move in together without changing the way you both treat money? I'm afraid that our opposing views on it will create friction and more arguments Like what? I mean arguments around like money I tend to probably ask a lot about it because she'll have something new and I'll be like oh where'd you get that? How much does that cost? And just the way she answers I know she's like shut up to my money Give me an example from the last few months What's something that you saw and what did you say? It was like this weekend and I was like, oh, where'd you get that? And you're like Amazon. I was like, oh, OK. How much was that? What was it, April? I ordered another tripod. You already have a tripod. So I was like, why? Why do you need another tripod? How often do these conversations happen? Probably every time she buys something. Oh, no, no, no, not every time. But like if I see it, like if I see something and I'm like, don't you already have one of those? and you know or she'll be like oh well this one broke or this one's the new 2.5 version that works better like when you bring up these questions and you say like hey why'd you get that you already have one etc what are you getting at when you ask that question i mean i feel like there's better things she could have spent the money on i guess you ever just tell her that i feel like i have yeah how do you decide when to ask a question versus just being like i think that was a bad decision oh i usually don't leave with that was a bad decision because that usually doesn't go over very well does it go over better when you ask her why'd you get that no but it seems like it's a little more gentle but no neither one of them really go over that great i mean she don't answer the question but i think she resents the question why do you ask it it's just in my nature because i would rather her spend that money or not maybe invest it or save it or do something different. How many times have you asked a question like this in the last year? I'll go with 12 for one a month. I don't believe that. You just asked it like, come on, April, how many times do you think she's asked that question? I'd say 48 for more like four times a month. It's either 48 or 480. There's no way it's 12 in a year. No way. All right. So you asked the question and Creed, does it work? No, no. I love human nature. Something doesn't work for literally decades. And people go, you know what I think I'll do? I'm going to do it for another 20 years. That'll get them. It's really weird. All right. April, what's it like to get these questions from Cree? I don't love it. I tend to hide purchases and I don't like it. It feels like micromanagement, which I don't love. And your response when she asks the question is? I try to give it, you know, calmly, but I'm sure sometimes there's some passive aggressive and some sass. You minimize it. Oh, I didn't buy that many things. Justify it. Well, I needed it because I need this new upgrade. Yeah. Yeah. Rationalize it. All of those things. So if the two of you look at your conversations about these new things that April buys and you zoom up, what role is each of you playing in that conversation? Cree, what is your role? Like the authoritarian? well authoritarians don't ask questions they just oh okay i guess i'm like the the granny pointing the finger the granny i like that what'd you do that for you know we we have we have flour in the pantry why'd you go buy that okay i like that and april what's your role i'm definitely on defense i'm like the little kid nice you know is sneaking around trying to do stuff yeah i can see like arms crossed like shoulders up playing small or like playing peekaboo oh i didn't really buy that thing wow very evocative roles that each of you are playing you like those roles absolutely not it's not even parent child it's granny child in this one it's kind of weird i never heard someone describe themselves as a granny all right good to know so april what do you think about moving in together? Because Cree said she's nervous about getting into fights and disagreements if you move in together. What do you think? I'm simultaneously excited about moving in together and also nervous about the possibility that our relationship could suffer. Why would it suffer? We don't argue much now, but we have distance. We have two separate households. And I think sometimes absence makes the heart grow fonder. Is there one person who wants to move in more than the other or both? No, I think we both want to be together. For a long time, the decision has been where to be. She has her house. I have my house. Can you think of a time in the last few months where you were not on the same page with money? It's pretty consistent. We took a trip to France. I don't think she wanted to go as much as I did because she had some other financial obligations. I do feel like a time like that is a priority. So I put pressure on her how did you do that i think i maybe guilt do i guilt you yeah it was a little bit of guilt uh and you were just you're putting things in perspective you know like okay hold on i want to hear from april okay okay and i i definitely feel like i um i i'm i'm emotional um i'm usually really happy and then when i'm disappointed i'm really disappointed and it's like you can see it and you know you don't want to do that really if you don't have to have you found yourself april throughout life using your emotions to get the results that you want i can see that yeah kri are you a people pleaser probably yes tell me if this rings true or not april if you're happy you're really happy you're visibly happy if you're disappointed you're visibly disappointed kri doesn't want to disappoint you so she will agree to something that maybe she did not really want to do deep down or financially cannot afford to do it. How true does that ring? Yeah. Both are nodding. All right, so you convinced her to go to France. We were driving back to my hometown, and I think for the last hour, we didn't talk to each other. Why is that for you? What do you remember? I had already expressed that I had a lot of trips already that I had taken for the year. So I was like, France really isn't in the budget for me. And then so when she was like, well, when we go to France, I was like, well, I was going to France. And she was like, well, why wouldn't you be going to France? Like, that's a trip that I want to take with you. And, you know, why wouldn't you be going? And I was like, well, you know, again, I hadn't really planned and budgeted for that. I think I kind of went off and I was like, I don't really want to go. I don't even want to go. And she was like, well, then if you don't want to go, then you shouldn't go. and then then then then we just kind of went in our separate corners how did you end up deciding to go i don't like seeing her sad i wanted to go i just was like there's better things i could be doing with that money but like like what paying off my car all right now how long have the two of you been together five years five years okay and is potential marriage in your future that's adult okay what's stopping you from that uh well we decided that we would wait because uh ashley graduates in um may may that's your daughter yes and so we were like okay then then then she'll then april will move in with me while she's off you know living her life finding her way in the world and then you know that was the next progression so you feel like it's a pretty clear line from here to marriage? I do. Yes. Okay. April? I agree. Okay. So what's the problem today? Sounds great. You're going to move in together. You're going to get married. What are we doing here? We're hopefully not fighting about money. I don't want to be judged for my guilt-free spending. I want to spend my money because I work hard for it. I mean, I don't want to marry into a huge amount of debt. So if we had a plan, that will work. What if you don't have a plan? That's going to suck. April, when you look at your bank accounts, how do you feel? I feel okay. How about your spending? I feel like it's out of control. Why? I just willy-nilly spend on stuff. Like what? Buying stuff, my daughter. How do you spend it? You spend it on credit cards, you spend it cash. How do you spend it? Debit on checking account. Debit. That means you have credit card debt, right? Oh, yes. Yeah. People who have credit card debt always use debit cards. Have you tried to change your spending? Yes. Did it work? No. Okay. And Cree, is this some of the source of the conflict? You see her spending and you go, I don't like the way you spend money? Yes. You don't say it like that though, right? You say, why'd you buy that? That's right. Okay. And then April goes, me? Little old me? I didn't really buy that. And now you two are playing a game instead of actually talking about the real issue. What is the real issue here? Priorities, money priorities. Be direct. That's just a word. What is the real issue with the two of you? I guess the problem is we don't agree. I don't agree with how she spends money, I guess I should say. Thank you. Yeah, for sure. And I don't agree with how she like wants to hoard money and like not live life. Live life? Live life. Life is short. Tomorrow's not promised to either one of us. But I don't want us to be 65 and looking at each other like, well, we got $30 between us. And I don't want to be 65. Like, man, I wish I had gone on that trip or done that thing. And there we are. Finally, we are getting some real honesty. Most couples never talk like that. Instead, they dance around money. This is what you might call level one honesty. I don't agree with how you spend your money. I don't agree with how you hoard money. At level one, couples argue about the transaction, the amount someone spent on avocados or their random Amazon purchase. But the real conversation is deeper than that. If you can make it to level 10 honest, you might say something like, I feel unsafe when you spend like that. Or I don't feel like you actually see me or understand who I am, what I want when you save every single dollar. That level where you are talking about what you feel, you're able to masterfully talk about the numbers as well as your relationship with each other. That is where real connection actually happens. And it's rarely about the numbers alone, but this takes understanding yourself and being honest about what you actually want and need. This is extremely advanced because not only do you have to master your own inner psychology, including the idea that it's okay to want certain things, but you actually have to work on your technical communication skills to really reach your partner. This is what the podcast is about. It's not how much money you saved on rice cakes at the grocery store. It's about systematically, progressively moving up your skill ladder so that you see money as a source of opportunity and adventure and joy, and not simply as a wedge that keeps you apart. Right now, they are stuck at level one. To make a change, they have to be willing to go to a higher level, and we're going to see if they can get there right after this. Who else has had the experience where you put off something for a week, a month, three months? It's like a pile of papers you need to organize on your desk. You finally get to it, and it takes like 10 minutes. Why didn't we just get it done anyway? I find the same thing is true of water. Like a lot of us do all these crazy things to drink more water. We know we should drink more water. We buy this jumbo water ball that says, keep going, drink more. You can do it. It's like, maybe we just want a little bit of flavor in our water. If that's you and you want to drink more water this year, try using Element to replace essential electrolytes and make your water taste even better. Element is a zero sugar electrolyte drink mix and sparkling electrolyte water made with no food dyes, no fillers, and no BS. When you're sweating at the gym on a hike or just in the heat, you're losing more than water. Element helps replace essential electrolytes. So you stay sharp, avoid cramps and feel better. It's formulated based on real science and it's used by Navy seals, Olympic athletes, and pro sports teams. Get a free eight count sample pack of elements, most popular drink mix flavors with any purchase at drink L M N T.com slash Ramit. That's drinklmnt.com slash Ramit. Find your favorite element flavor or share it with a friend. Try it totally risk-free because if you don't like it, they'll give you your money back. No questions asked. If you want to eat better in the new year, I don't think it really works to say, I'm going to try harder. I'm going to hope. It's like trying to run a marathon wearing flip-flops. Hope or flip-flops are not a strategy. To eat better, you need a plan and you need an actual strategy. How am I going to make sure on Thursday for lunch that I have healthy food that I want to eat? Well, that is where our friends at Factor can help you. They take the work out of healthy, macro-dense meals so you can start eating better now. Factor is a chef-crafted, dietician-approved meal delivery service that fits into your goals and schedule. Their meals arrive fresh, not frozen, and they're ready to eat in two minutes. No prep, no cleanup. Just heat it and go. There are over 100 meals to choose from every week. High protein, calorie smart, Mediterranean, even GLP-1 support options. And unlike most meal prep, there's a lot of variety. So you're not locked into the same boring meals every single time. If you're looking to eat healthier starting right now, this is exactly what I would use. Head to Factormeals.com slash Ramit50off and use code Ramit50off to get 50% off your first Factor box plus free breakfast for one year. Offers only valid for new Factor customers with code and qualifying auto renewal subscription purchase. Make healthier eating easy with Factor. April, when you hear Cree say that she is scared to move in together because of money, how does that make you feel? Sad. Why? Who wants to be the problem? Who wants to feel like something within them is holding back, like making somebody else like, I don't want that. When you feel that way, you feel sad about it. What comes next for you? I need to figure it out. What can I do? How can I be better? I know I know what I should be doing. How can I do more of that? What should you be doing? I should be saving more money. I should be paying myself first. I should be paying down my credit cards. It's interesting you say that because just a second ago you were saying to Cree, I don't want to be 65 and wondering if I should have taken that trip, etc. So how do you reconcile those two? I should be saving more, but I don't want to get older and not have lived the life the way I want to. I think it's possible to do both. Oh, do you do that? I'm not actively doing it, but I think it can be done. Okay. How often do you talk about money in your relationship? Not often. And if it were up to you, would you talk about money more or less? Less. That's what I thought. he goes i don't want to talk about it leave me alone let me buy what i want to buy and we're good and then creed's like yeah but why did you buy that one thing from the store bringing it up okay so besides that dynamic where creed chases and april avoids do are there any other types of money conversations that you have uh we talk about you know like we're glad to eat you know whose turn is it we always alternate okay um you know is it your turn is my turn i don't know i'll go i'll get it this time cool what else uh i think when we go on trips we kind of we we like we have our own separate like i don't know if you call it budgets we we have the money that we are going to spend and we play well off each other with that like we'll go get a massage like all right i got that and then oh we're gonna do this bus tour and oh okay i got that you know okay things like that Do you have different tastes in, like, travel or food? Does one of you prefer more expensive things than the other? Yes. Who's the one? April prefers to fly with an airline that she prefers. Okay, got it. And Cree likes nice restaurants with reservations. Is that right? Yeah, I'm not a total, like, complete cheapskate. I like to enjoy things. You did put somewhere in one of your notes to me that you grew up sometimes being called cheap. Is that right, Cree? Yes, I still get called that to this day. Are you cheap? I want to get a good thing for my buck. That's what cheap people say. Okay, well, then I'm cheap then. Okay. Cheap people go, well, I'm actually, I don't know if I would call myself cheap. I'm selective. They use these words that are always quite charitable. You know, I just don't need the really fancy wine. For me, I'm perfectly happy. And it just cuts across everything they do. That's why I'm very surprised that you like nice restaurants. I rarely hear a cheap person saying, I like nice restaurants. What's behind that? I like nice everything, but I could go buy, you know, a Jaguar. But I'm going to buy a Honda because I'm practical. I don't mind that. I don't think that makes you cheap. All right. We'll talk more about whether you're cheap or not. And it's not just because you like a Honda and I like Hondas too. Okay. It's not. Okay. Okay. So do you have any shared bills between the two of you? No, no. It's all separate. Great. I just want to jump in quickly because I don't mind that Cree and April keep their finances separate. They're not married. They don't live together. It's actually quite normal for couples to keep their finances separate at this stage in a relationship, but it's important to note because just like every other couple on this podcast, they had to fill out a conscious spending plan and they filled out a separate one for themselves as opposed to a joint CSP like we normally see. So let's take a look at the numbers. So since you keep everything separate, we're going to look at your conscious spending plans, plural. All right, let's start with Cree. So Cree, I'm going to go through these numbers. If you don't mind, I'll just walk us through them and April's, and then we can talk about what it all means. Cree, your assets are $395,000, investments $62,000, savings $26,000, and debt $133,000 for a total net worth of $350,000. What do you think about those numbers, Cree? I wish I didn't have as much debt. All right. Let's go on to April's numbers. April, you have $329,000 of assets. Investments are $20,000. Savings, zero. Debt, $379,000 for a total net worth of negative $30,000. What do you think about those numbers, April? It's terrible. Terrible. Why do you say that? Because I owe more than I have. My debt exceeds my value. Okay. Kree, what do you think about April's numbers? Yeah, they need some work. That's a very nice way of responding. It was very gentle. Okay. First of all, I don't mind if somebody has a negative net worth. That's fine. A lot of people have a negative net worth. It's okay. There's usually almost always a way to work out of it. What really caught my eye was the income. Kree, what do you do for a living? I work for a nonprofit. And April, what do you do for a living? I'm a nurse. You're a nurse. Okay, great. Cree, your income is $56,000 per year. And with that income, you have a $26,000 savings and $62,000 in investments. In fact, your net worth is $350,000. April, your income is $192,000. That's a lot of money. And you have $0 in savings and in fact, a negative $30,000 net worth. What do you both think about that? That's the root of the problem. Can we do it another way? What if you saw another couple with this characteristic? One person who earns a lot of money and actually has a negative net worth, and another person who earns a fraction of the first person and has a net worth of $350,000. What would you say about their situation if you were very direct? The person who makes very little and has done so much more really needs to help the other person to like try to do more with what they have. OK, Cree. I would say that the person that's making a lot of money is making a lot of mistakes with the money. Finish the sentence. And so. And so they need to do better. Interesting, April, your response. The person who makes less and has saved more needs to help the other person. Yeah because I feel like the knowledge of how to amass more savings and investments is there within that couple Hasn Creed been trying to tell you that I don feel like why you spend that Why you do that I don think that helps That not helpful First of all I agree with your assessment when you said, hey, if I saw a couple with these numbers, there's obviously some things that stand out to me. But your response was so interesting to me. Your response being, the person who makes less but has more should help the other. My response would be, the person who makes a ton of money should change the way that they relate to money and dramatically pay off debt and increase their savings and investments. It actually has nothing to do with the other person at all. You're not married. You're not even living together. So what does it have to do with them? It's about the person who earns the money. They're obviously capable to make almost $200,000 a year. They should take on the reins themselves and be responsible for their own financial security. How does that strike you? It's accurate. I think it's easy to say, but I have found that it's hard to do, changing your approach, relationship, and the way you deal with money. What if you just don't? You still get to go on these nice trips, still get to buy stuff. What if you just don't? I think the big root of my issue is I don't really have an issue with my money and how I manage it. I still have a roof. I still have utilities. I still live an okay life. How do you get people to change? You don't see a problem. So that's what we're trying to do. We're trying to get April to change when she doesn't really see a problem. Extremely honest. I really appreciate that. Cree, what do you feel when you hear that? Yeah, you're right. Everything's separate right now. But say we got married and then I owe what I have. I have three hundred and seventy nine thousand dollars in debt on top of my hundred and thirty three. So then say something happens to her. She's the big earner. We're going to be in a world of hurt. You know, like like my my salary is not going to be able to take care of all that. What's the punchline of this sentence? So therefore what? So therefore it scares me to think about that situation That's it? It scares you? That's the end of the sentence? Yeah, it scares me and it makes me not want to be in that situation But it doesn't sound like that because you all are planning to move in together in May Well, the hope is that we can get some sort of plan The hope is that I can get a plan to get this ball rolling in the other direction Hold on, I just want to reflect on the way your language just changed The hope somewhere in the distance, somebody from the heavens is going to come down and deliver the plan for me. It's you. You're the person though. No, no, no. First of all, I'm not coming from the heavens. If anything, I'm in hell a lot of the times when I'm reading my own comments on social media, what people say to me. Second, I can't make you do anything. Only you can. We need to really fix that misconception right now. I'm not here to fix you. Only you can fix your situation. I am struck by the dynamic between April and Cree. It's almost like they are both playing characters. Do you notice April falls into the character of what I call the innocent doe? Oh, me? Little old me? I'm just not good with numbers. And that identity is quite adaptive. What I mean by that is that identity allows her to avoid making financial decisions. It is actually something that feels almost like a warm coat. It feels comfortable. April said just a minute ago, she doesn't see a problem because she still has a roof over her head. She still gets to go on vacation. Sounds pretty nice. Now I could sit here and make a concrete plan for April, but unless she's willing to take responsibility and ownership of her money, nothing will change. This is important for you to recognize when you are talking to somebody, maybe your spouse, maybe a friend, a family member, and they simply will ask you the same question over and over and over, but they never do anything about it. You should probably stop and say, what's really going on here? Are they really looking for information or is there something deeper happening in this dynamic? Notice, by the way, that Cree perpetuates this dynamic because she's a people pleaser. And when you pair an innocent doe with a people pleaser, it can often create this cycle where neither partner is actually addressing the true underlying financial issues. The innocent doe just continues avoiding responsibility because why would they not? While the people pleaser avoids confrontation to keep the peace. Now we got to do something about this. We got to break this cycle. But to do that, both partners need to actually acknowledge this dynamic is not working. That step is actually incredibly powerful just to say, hey, I'm not sure what's going on here, but this is not working. Then they need to believe that there is a way to change the dynamic. even if they don't yet know what it is. And then finally, they need to develop the skills to change the dynamic. Are you starting to get it yet? This is not just about money. This is about changing your relationship with food or fitness or your loved one or your kids or anything where you are improving and changing your life. First, you need to acknowledge this is not working. Then you need to believe that there's a way to make it better, even if you don't yet know it. And finally, finally, you need to develop the skills to change the dynamic. If you jump into freaking tactics immediately, you will get stuck. You will get lost and you will stop. This is why we take it slow in order to go fast. Now, if you are in a similar situation and if what I just said really resonated with you, then I want you to consider joining my money coaching program. It's designed to help you and couples align your financial goals and to get unstuck by building the right skills in the right order. You can join now at IWT dot com slash money coaching. Now we'll get back to the numbers right after this. 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Lisa offers many high quality mattress models, whether you sleep on your side, your back or somewhere in between. From the first night, you're going to be able to feel the difference. They use premium materials and it delivers full body support. Every Lisa mattress is assembled in the United States. It comes with free shipping, easy returns, and a 120-night sleep trial. Wirecutter actually named them the best hybrid mattress. Go to Lisa.com for 30% off mattresses, plus get an extra $50 off with promo code RAMIT, exclusive for my listeners. That's L-E-E-S-A.com, promo code RAMIT, for 30% off mattresses, plus an extra $50 off. Support our show. Let them know that we sent you after you check out. Again, that's Lisa.com, promo code Ramit. Create your income, $56,000. And your fixed cost, what's that number there? The 75%? Yeah, 75%. All right, so that's a bit high. So you feel a little stressed out about money? I don't. No? Oh, it's because she's got a secret. What the? I don't have a secret. What secret do I have? This was not in my notes. What secret? Tell them about your little weekend job and all your little cash that you've been getting. Even before I had that, I don't feel stressed about money. I did pick up a part-time job, and I work it on the weekends, and it's a pretty decent amount of money that I make. How much? It's about $1,200 extra a month. Gross or net? Net. Net, okay. Why is this a secret? This is cool. What's the secret? It's not a secret. I mean, I didn't put it in the CSP because it's not forever. I decided I wanted to do this, and so I did it. Why did you do it? Well, mainly because I had a car accident and I totaled my paid off Honda and I bought a new Honda. And I'm like, I hate having a car payment. All right. All right, cool. So I like that resourcefulness. So can I add $1,200? Yeah. And currently right now I have a renter. And so I have a little extra income from that too. But it's not forever either. Obviously, when she moves in, I'm not going to have that renter. All right. Well, let's put the $1,200. So that, wow, that brings your fixed cost down to 56%. And the renter, how much does a renter pay? $850 a month. Damn, that's nice. Holy ****. So I just took that number down and it drops your number down to 40%. Yeah, you're doing great. Financially speaking, especially on a $56,000 gross salary with the increase of the side income and the renter, fantastic work. Let's look at the rest of it here. Your car payment is $484,000. debt payments are zero. What the you have one hundred thirty two thousand dollars of debt. How are you paying zero? Well, that's my house. The twelve ten. That's my mortgage in my house. No other debt. Correct. Wow. All right. Investments are seven hundred and eight dollars a month for your 401k. Very impressive. And an extra one hundred dollars a month for some post-tax stuff. Savings are at six percent. You have one hundred dollars a month going towards an emergency fund then you have $26,000 in an emergency fund. That's 10 months of expenses. Wow. Vacations at 125, gifts at 50, and then guilt-free spending is at 36% or $1,694, which I know you don't spend that much every single month. What do you do with the extra money? I pay to the principal of my car loan. Okay. I save some too. The automated number is what is going into my savings, but I add a little bit more. Out of curiosity, just one question for you. Why don't you invest more aggressively? Oh, because I'm scared. Yeah, I think that's exactly the right answer. Honestly, this is a quite amazing conscious spending plan. It's extremely impressive on a $56,000 salary, or even if we add in all this extra stuff, it's still very impressive. But the striking thing is not the 10 months of savings, which is great. it's that you only have $62,000 of investments when you actually have a ton of extra money every single month that could be going and that that to me suggests probably like don't understand investments maybe scared etc which is you just corroborated that I mean well the main thing now is I really just want to pay this car off I can tell you hate debt right I do but you know what I hate getting older and not having enough in investments right so should I be doing half of that into investment, do you think? Well, we could talk about that, but you don't have enough invested, especially for someone who's like very diligent. You're just saving, which is fine, but it's not enough. You need to be doing more. And based on your ability to use your money effectively, you just you need to be investing more. OK. All right. Let's take a look at April's one ninety two thousand. You're contributing for one K eight hundred bucks a month. That's good. Your fixed costs are 48%. It's pretty low. That's nice. So you have a very low mortgage. It was a HELOC that I recently converted to a mortgage. I took a loan on my house to renovate the basement. What the f***? Why did you do that? This house actually is the house I was born in. My grandparents left it to me and my daughter with no payment. And it was built in 1970, and it looked like it was built in 1970. And I was just miserable there. I was traveling a lot more because I hated my house. Oh. So I upgraded my house, and I'm a lot happier there now. Wait, you have zero in savings. True. How much did the basement cost? Oh, it was $100,000. All right. Like, I live in the basement. You live in the basement. Who lives upstairs? My daughter lives upstairs. We have separate halves of the house, and we're so much happier now. Ah. Does she pay? No. No. Why doesn't she live in the basement? Because the basement's nice. I had the basement renovated. Yeah, but before. Before we were sharing the upstairs. There's three bedrooms upstairs. I'm confused. You had three bedrooms. That's not enough space for two people. She's not a clean person, and we argued every day about how not clean she is. We argue so much less now. What the f***? How old is your daughter? She's 17. I'm not a parent. I'm certainly not a parent of a teenage girl, but I don't know. Spending 100 games so that I have more space from a three-bedroom house? okay this is a good clue let's continue on your housing is like i said very low but it's it's actually it's not the primary mortgage is that you took a heloc and so you're paying that even still that's pretty low insurance is 1100 per month that's a bit high but what do i care if it's 48 you can spend whatever you want phone is 450 you're paying for your daughter right we have five lines who's five people i have a business phone i have my phone she has a phone and with two Apple watches. Any iPads? She has an iPad, but I don't pay for a line for it. It doesn't have data. Got it. But you pay for the watches. The watches have lines. Yeah. You're $379,000 of debt. Does that include any credit card debt? Yes. Thank you, Lord. Keeping my statistic consistent. People in credit card debt almost always have an Apple watch or an iPad where they pay for additional connectivity. Why is that? I don't know. Can you say no to your daughter yeah yeah really yeah yeah whoa look at kree's face she can she can she just doesn't kree was like this she was just shaking her head slowly and she was like just wait until this guy stops talking because i'm gonna tell the truth right now let me ask it another way thank you for the clue kree do you ever say no to your daughter april yes for sure she's asked to do a ton of things that I've said no to. And sometimes I'm real with her about why. No, because I mean, look, you want to do this. We can't do this. We've got to do one or the other. Okay. How's she with money? She's actually got more in savings than me. Wow. All right. That's interesting. Let's continue down. Investments are at zero. Savings are at 7%, but the savings are for vacations. $800 a month for vacation. Nothing towards an emergency fund. Okay. And then 45% on guilt-free spending. I don't really believe this number. $5,400. That's basically what's left over. April, is that number correct? Oh, I think that's probably close. Like, what do you spend it on? I spend a lot of money eating out. I do a lot of the pay-in-for stuff. I do a lot of pay-in-for things. Buy now, pay later? Klarna. Oh, God. A firm. I do a ton of that. Why? Because I like the idea of having things now but not having to pay so much for it right away. Okay. I like to spend money, but I do want to save. Don't tell me what you think I want to hear. Tell me what you feel. No, I feel like I want to save. I'd love to have some savings. I'd love to have an emergency fund. If you wanted to save, you would have saved. Right. Maybe you just don't want to. I do want to, though. If I were in your house right now with a clipboard and I were observing you for five days, tell me what I would write down that I would see with my own two eyes that would tell me you want to save money. Yesterday, I ate some food that I'd already purchased instead of eating out. That was me wanting to save money. Okay. And so I'm writing that down. She's eating food that is already in her fridge. Where's the savings? Because then I'm not eating out. Where's the savings? You still have $0 in your savings account. Where's the savings? Oh, right. It's in my checking account. And it's just going to get spent tomorrow. That's not savings. That's you just eating food in your fridge. April, on your CSP, you list $379,000 in debt. What is that debt for? Half of it is the loan, the mortgage, and half of it is my student loans, subsidized and unsubsidized loans. Okay. What about the credit card debt? Oh, that's in there too. How much? $10,000. I have three credit cards. How much do you owe in student loans? It's like $180,000. You have a car loan? Yes. How much? $34,000. And then what about this buy now, pay later stuff that you use? Oh, yeah, that's not in there. How much? How much of that do I have? Woo, probably about $2,000. I'm curious why your reaction was like, woo, like $2,000 is like astronomical for you, but $10,000 of credit card debt was just a casual mention. Well, I feel like $2,000, because it just got back up to $2,000, I actually paid off that paying for stuff. I paid it down to nothing. So I feel like I'm capable of paying off $2,000. I think I'm capable of paying off $10,000. Why haven't you? I haven't wanted to. I haven't just done it. Cree, what are you hearing as you hear April describe her relationship with money? Well, I think it goes back to what she said. She doesn't see that there is a problem, so there's nothing to fix. Correct. And? And there is a problem. I want to be different. I want to start saving. Since we decided to come on the podcast in the last month, I've reduced my spending. Because my big problem is I live outside my means. I spend too much money. So in the last month, I've spent less. I was in this terrible thing called daily pay where I was borrowing from my next paycheck in order to have enough money to do all the extra things that I want to do. So I was owing myself two thousand dollars per pay period. Why? How much I was. That's how much I was overspending. I am not conscious with my spending at all. I have I before we decided to come on the show, I didn't know how much I made per month. And I certainly didn't know how much I spent on anything. How did you grow up with money? What do you remember your family saying about money when you were young? It was never really an issue. Anything I asked for, I pretty much got it. I didn't ask for anything extravagant, but I think the things I wanted, I got. How many siblings? I have a brother, but my mom died when I was 13. My brother went to live with his father, and my mom's parents took me in, and it was just me. Oh, my gosh. I'm sorry. That's a really tough age to lose a parent. Did that change your relationship with money at all? I remember my mom really struggling. She worked two jobs. My stepdad was a drug addict and didn't help at all. I have very few members of my mom, but she worked a lot. And my grandparents, we spent a lot of time together. We really enjoyed each other. What was your grandparents' relationship with money? My grandmother made like seven, like eight dollars an hour at top out. But she managed to take care. I mean, like I never knew us to struggle financially. And when she died, like everything was paid for. And she left me like 20 grand. And your grandfather? He was an alcoholic and he spent all of his money on things of that related to alcohol. So he my guess. So my grandmother paid all the like she said she would describe it. She paid the essential bills, the mortgage, and he paid the things that we could do without like the water and utilities. You could do without water and utilities? If he messed up or didn't do his part on time, the water would be turned off. I don't remember it ever being turned off. I feel like he they must have argued enough to where he stayed on top of that. But I knew those were his responsibilities. Is anyone struck by the connection between the word grandmother and Cree? Yes. Cree, as I mentioned, you're the first person who's described yourself as a grandmother. Then I find out April had a grandmother who made a modest income, same as Cree. Look at April's face. She's covering her mouth and yet was dialed in on her spending, accumulated a sizable savings account. And not only that, she had a side income that she did. Same as Cree. Dang, I'm dating my grandma. Oh, that's awful. April, did you ever see that connection before now? No, I didn't. And what did the stability of your grandmother allow your grandfather to do? To mess off the majority of his income. So what do you all see here in this dynamic? Similar to how you grew up with your grandparents, it looks kind of the same, right? I mean, one person's holding it down, making sure the bills and the mortgage is paid. And the other person's like, all right, Amazon, here's my credit card. Totally. And can we just fast forward to the next generation? Let's take your daughter. She's 17 years old. Let's say I spoke to her. What would she say about money? Interestingly enough, she has a little relationship and she is Cree and she's dating me. Tell me about that. She has a boyfriend that she is always talking to me about how he's so reckless with his spending and he doesn't save anything. They had a little anniversary last month and she was in her feelings about how he wasn't going to have enough money to do something. What did you say to that? I was just like, wow, listen to you. Listen to you keep going. What's the punchline? I think she's not like me in her spending. But like me. She likes to spend money, though. She likes to spend your money. Because we'll be on the weekends. She'll be like, hey, you guys want to get, you know, order takeout? And we'll be like, no, we're good. You go ahead and order. She'll be like, no, never mind. because when it has to be her money she's like no okay and then like her and the boyfriend were going out somewhere and they were like you guys are coming right and we were like oh okay i guess so they went upstairs and april's like oh they want us to come i was like they want our credit card wow and of course we ended up paying which i don't mind but i'm just saying it's easier to spend someone else's money yeah the parallel between how someone grew up with money and how they treat money today is always fascinating to me. In April's case, we see that this has been going on for generations. It's actually deeply ingrained in the fabric of who she is. It's interesting to me that April's daughter is following the exact same cycle. She may be playing a different role than April, but it's a similar cycle nonetheless. I'm not sure April is actually connecting those dots. I'm going to use a strategy that we call twisting the knife. And I know it sounds a bit aggressive, but it's a tool to help people really see what happens if they take their behavior or their beliefs to the logical extreme. What I'm going to try to do is connect her financial behavior to something that is deeply meaningful to her, which is her role as a parent. The goal is to get her to see herself in a new light. If she sees the potential impact on her daughter, it might be the catalyst that she needs to finally take action. So I'm going to try twisting the knife right after this. Some of the best gifts that I've ever gotten are incredibly thoughtful gifts to solve a problem I didn't even know I had. For example, one of my favorite gifts was when my wife organized my eye photos for me. I have tens of thousands of photos. I just scroll through them. I don't know how to find anything. 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That's joindeleteme.com slash Ramit, code Ramit for 20% off. April, you ever think about your daughter's relationship with money as she gets older? Yeah, for sure. I don't want her to be like me. Oh. Why not? As you described it, you've got a pretty good life. Go on vacation, eat out. Why not? I mean, because I don't have a plan to not work. My plan is to work. I don't plan to not work. And I feel like it would be nice to not have to work. Well, maybe your daughter will just have to work until she dies. I don't want that for her. No? No. What do you want for her? I want her to start investing now. I try to share with her the little bit of knowledge I have in terms of like how you can start early and have more. You tell her that? I do. Does she listen? She does. So you're like, do what I say, not what I do. And I think I do that a lot with her in a lot of my experiences. I've shared a lot of my mistakes with her. Like, hey, this is what I did, and I don't recommend it. And I think she takes some of that. I think that's pretty powerful. There's a lot of cultures that don't share their mistakes. Like in Indian culture, parents don't really share their mistakes. They don't even really talk like that, you know. But I think being able to share that is pretty awesome. And also, mistakes is one thing. One of the things that I've said before is people who have problems with money love to talk about their problems. So it's one thing to talk about problems or mistakes. it's a whole nother thing to actually change them. And a lot of times what I've observed is people who talk about their problems or their mistakes, treat it like they're absolving them. Well, I talked about them. I shared my mistakes with you. I'm cleansed. Not how it works. In fact, I would much rather you just teach your daughter how to set up an index fund investment. You could leave the mistakes behind. Take them or leave them. It's up to you. But that alone is not enough. showing them how you invest, how you save, how you've created a future, even though you didn't do it for 40 years, that is more powerful than any amount of sharing mistakes. What do you think? Yeah, I agree. Okay. Cree, how did you grow up with money? Can you remind me? Oh, well, I was one of five. I don't feel like I grew up poor, but we definitely grew up conscious of what we spent, you know, because there were five mouths to feed plus two parents. So, but my dad was very, very frugal. Like, so people, people often say, yeah, you're just like your dad. Cause he, he was definitely a frugal guy. I feel like way more than I was, but it definitely rubbed off on me. They weren't doing any investing. So that's not, that's something I've been trying to learn on my own, but like the value of a dollar and saving for a rainy day. I definitely got that. What phrases did they use when you were young about money? Money doesn't go on trees. What else? You need that like you need a hole in your head. I got that one a lot. Kind of the same type of thing that you say to April, although not as direct. Why do you need that? It's the same general type of message, right? Are your parents still alive? No. No. Okay. How were they with money as they got older? Pretty good. I mean, my dad passed away first and he left some money. We didn't have to like, you know, start a GoFundMe or nothing to get him in the ground. And he actually left my mom some a decent amount of money. And then, you know, when my when my mom passed away, she left the the house to me and my siblings and, you know, a little money as well. What do you do at the house with that many siblings? We have it. It's we we use it for holidays and birthdays. We meet up there. And actually, one of my sisters actually just recently moved back in there. Ah, wait. Someone's living there now. And like from a financial perspective? We we just we have what we call a kiddie fund and we all put money in it every month. Really? Yeah. To pay bills and maintenance and insurance and taxes. No conflicts with that many. So we get along pretty well. We're pretty low key. So we just we do what needs to be done. That's amazing and actually quite rare. You know, the old style was like we need to buy a house for generational wealth. And then they pass it down. But, you know, if you have two kids, three kids, four kids, and there's a lot of conflict that often happens. And parents don't think about this. In fact, I had one person in one of my comments, I was like, hey, you have like multiple kids. Why are you only thinking about your house as generational wealth? And the person literally said, they can figure it out. When I'm long gone, I'll be out of here. And I was like, that just sounds kind of selfish. But in your case, amazing, because your siblings all agree. Sounds like you're pretty unified on the vision of how to treat the house. So Cree, what did you take away from your upbringing with money that you are bringing to this relationship as it relates to your finances? I'm the person that's like, hey, you got to save for a rainy day. A rainy day is definitely coming. You wag the finger. You ask the question. It doesn't really work, but you just double down and keep doing it. Pretty much. Looking at your CSPs side by side, we have Cree who makes $56,000 plus some side income, has a total net worth of $350,000. April making $192,000 has a net worth of negative $30,000 and spends almost the same amount each month on discretionary stuff, eating out, etc. as her fixed costs. Here's my question. Are the two of you financially compatible? Looking at those numbers, no. April? No. April says no. So does Cree. So what does that mean for you? I need to be different. Cree is better. Cree is right. Her stuff is better. I need to be different. I'm the problem. You believe that? Yeah. Yeah, I do. Okay. I'll take you at your face value. So what are you going to do? I got to figure out how to be different. I've got to figure out how to have more control. Like, I just, I've got to figure this out. Didn't sound very convincing. It actually sounded, like, painful. Let me replay what you just did. I said, what's your plan? What are you going to do? Already, it's over. It's over. If that's the way you look at the journey that you claim you want to go on, ah it's gonna suck you're never gonna do it why would you do you want to try again why would you change because what i've been doing isn't good it's not taking me in the direction that i want to go in why not you told me it is you're traveling you wearing nice clothes but when the rainy days come i have to scramble and do something strange to get through it that's true but if you've been doing it this way for 40 plus years and you got a nice the nice house that's renovated and you go on the trips it actually feels like it could be painful if you change that the question was are the two of you financially compatible both of you said no Cree what do you make of that uh well that that that money's probably going to be an issue for us not probably it already is no it is an issue for us and will continue to be okay an issue for us is it going to be a bigger issue or a smaller issue if the two of you move in together bigger that's bigger for sure and then what's going to happen we're going to argue you're going to argue i agree and then what uh that's not going to last now we are finally getting to a higher level of honesty What are we at? Level six, level eight, level 10, that this relationship will not last if big changes are not made. April has made some big strides in finally understanding the severity of the situation. So now I want to turn to Cree because her role here is also very important. The work for Cree is to set a boundary, something that she has never done in her relationship with April when it comes to money. Instead, she's danced around it. She's made little jabs about things like Amazon purchases. But setting real boundaries is crucial if they want to bridge these opposing views about money. And it's important that it happens now before they move in together. Do you know why? Because right now, Cree has leverage. April has never actually faced real consequences. So leverage is important to hold her accountable. Now, I know what you're thinking. Does this seem harsh? Ramit Sethi, so businesslike when it comes to romantic relationships. Why are you so mean, Ramit? Your relationship is a business. Let me explain. In America, too many of us approach relationships with a Disney mentality. Oh, I love him. I love her. Let's kiss and live happily ever after. Now, you all want to give each other a big, fat French kiss in public? Be my guest. But being in a serious relationship is a business, too. It's the business of running a household, of combining income. of designing a rich life and implementing the systems to make it happen. We got to stop with this Disney-ification of relationships. My wish is for all of us to take our relationships seriously. That might mean using an agenda for your monthly money meeting. You can actually get the direct agenda that my wife and I use directly from my new book, Money for Couples. It might mean using a shared calendar or developing some SOPs in your relationship. My dream here would be for Cree to say to April, this is important to me. And I expect my partner to do X, Y, Z. I love you and I want to be together. But if you can't meet those expectations, I can't move in together. This is the level of seriousness that I want you to approach your relationship with. And I think here for a people pleaser like Cree, this is going to be very challenging. Listen now as I push her to look at this as an opportunity. Cree, if I were you and I had grown up from a place of, oh my gosh, my dad is frugal and I'm a little bit anxious about money and I'm going to meticulously put money aside and always track all this stuff. And on a $56,000 income, I had accumulated what I accumulated. I would look at this opportunity as a gift because most people, when they get, they consider moving in together or getting married, they're not talking about this kind of stuff that the two of you are talking about. They haven't laid out their CSPs next to each other and seen the core numbers. They haven't done that. You two have, and you have seen each other's habits and finances. Now I'm not saying don't move in. That's not my position. You are adults, but I am saying, And Cree, if you want to set a boundary on what you will accept, then this is probably the time to do it. On what I will accept as far as our relationship goes? If you're financially incompatible with both of you have acknowledged you are, then what would it take for you to advance this relationship? I would love to see her make an effort towards, because I feel like it wouldn't really hurt that much. $5,400 of guilt-free spending is a lot of money. I feel like if you had half of that, you'd still be happy. So maybe take half of that and invest it or pay off debt. Hold on. I'm not looking for you to give April advice. Yes. April is an adult. She can do what she wants. I'm looking for you, Kree, to tell me what you will accept. Let me give you another example. If I was dating somebody and I have saved and invested in all this stuff, and then I find out they have no savings, they have credit card debt, they're essentially spending what they make, eating out, and they make a good income. my standard or my boundary might be, hey, if we're going to be in a relationship together, then it's important for me that you have a debt payoff plan. It's important for me that you are saving. The number itself is not that important, but it's important that we have a similar vision on money because we're going to go through life together. And I need to know that I have a teammate in this, a partner, not someone I'm fighting against. That's setting a standard. A boundary is saying, look, if you can't do that, I'm not going to come down on you. It's not my position, but I can't be in a relationship with somebody who doesn't do these things. That's just not the right partner for me. How does that strike you? That's extreme. I mean, I don't feel like we can't be together because of it, but I do feel like it would be a strain. And we have talked about her, you know, having a plan because, you know, like I said, I don't want to inherit all of that debt. Us moving in together doesn't make me inherit all that debt, but us getting married does. So what would change between moving in and getting married? I mean, I guess we would just be moving in. Marriage is is a thing that. We've kind of talked about, I don't know if it's like the end all be all for us, but I would not like to inherit. $300,000 of debt. Again, you can't control what April does. April does what she's going to do. And April, I'm going to come back to you in just a second. All you can do, Cree, is decide what you will accept. Right. So I'm saying this. I'm here saying that we need a plan for this before we take that next step. We're talking about the plan right now. The plan starts with you deciding what you will accept. And then April decides what she's going to do. The way that the two of you have been dancing around it for years, hey, why'd you buy that? Oh, I don't know. That's not helping to build a plan. That's just the two of you dancing. The way that you build a plan with the dynamic that the two of you have is that one person says, this is what I will accept. And then the other person decides if they're going to do something about it or not. Okay. Yeah. Now you don't have to do it, Cree. You might say, I'm not going to even bring up the topic of these are my standards. This is what, because as you put it, you find that to be extreme. You could perfectly say, hey, I'm not going to do that. We'll move in and we'll figure it out. My response to that would be history suggests you will not figure it out. Yeah. And I kind of feel the same way. So it's an issue that I don't have the answer for. Okay. Let's pause and turn to April. April, you've been very patient listening to that. What are you thinking hearing my conversation with Cree? I 100% agree. I mean, I think if I was increased position, I would want April to detail a plan like what is the plan? So you got this credit card debt. Let's see that gone by this date. And then student loans or the the car loan. Let's see what's the plan for getting that. I like goals that are measurable. I'd want to see like what like every so often, how much is the payment that's going towards this? So when is it going to be finished with that date? And I think, you know, as long as those measures get met, we've got like eight months between now and then. Then that looks like a plan and you're on track. And then what happens if those things are hit? What happens? Then I feel like we could move forward more comfortably. Meaning you can move in together. Yeah. Okay, and what if those numbers are not hit? Then maybe we shouldn't move in together because April's not holding her end of the bargain. Love it. How come April's standards for Cree are higher than Cree's standards for Cree? I think that Cree might be trying to be gentle with me. We've had some disagreements in the last year where I've kind of we've kind of had some words about how we talk to each other. And so I think she's maybe trying to be a little bit more gentle. Is that true, Cree? For sure. Can I just be very direct? I've never been accused of being too gentle with someone. OK, first of all, so I'm I'm coming from from the other end of the spectrum. OK, I've had to learn that. I'm trying. I'm desperately trying. but sometimes I see people who are so gentle so committed to walking on eggshells they gentle themselves into a horrible situation and I have noticed that since the first three minutes of us talking together and I'm trying to create a space where the two of you can be direct direct does not mean rude I would never want my guests to be rude to each other but Cree I can see this you know when I say like, hey, here's what setting a boundary looks like. And your response was that's extreme. That's actually not extreme. Your detector is off. It is very misaligned for you to have spent your entire life saving money and being frugal, borderline cheap, as some people told you, and then to potentially be moving in and potentially be getting married to someone who's in hundreds of thousands of dollars of debt and will not pay off her debt repeatedly after you tell her multiple times that actually cries out for a boundary. That's not extreme. You do not want to be in your 50s, 60s, 70s with tons of debt. That's not extreme. That's actually just reasonable. So your picker or your detector is off. It's misaligned. And that probably needs some deeper work. I would probably recommend a therapist, individual couples as well. For today, I'm trying to get you to both be candid. And April seems like you're opening the door. You're like, hey, let's you're being too gentle. Let's lay it all out. Am I reading that correctly, April? Well, yeah, you know, I came in the door. I know I my finances are a dumpster fire. I they are. And I know there's room for improvement and I'm here for it. Cree, I've come on a lot stronger than that before. What did you say before? Like you shouldn't be spending that money. Now we're talking. Keep going. What else do you say? I can be like extremely harsh, so I try not to be that because it doesn't get anywhere. Okay. Karee, what do you expect of a partner who would move in with you? Well, I would like someone who has a good grasp on their finances and knows how to save and invest. Okay. I like that. Can I ask you a question? because I ask what would you expect and your response is I would like. Let me talk about myself. I expect that somebody I get married to or I'm in a serious relationship with is interested in improving themselves because that's what I do. So I would expect that. I would expect that they are going to learn about money to a pretty high degree. That's what I expect. And when I set those expectations, my wife met him. She also expected stuff for me. I got to talk more about my feelings. I got to talk a lot about stuff that I normally do not talk about. She set that expectation. She set an expectation that we are always unified, especially when we're in public. Always. She said that's what I expect in a partner. I was like, God damn. I never heard someone talk like that. And it made me rise up to that level. So I'm calling it out because you used the word like. Yeah, I would like to have wings and fly. That's not going to happen. What do you expect, Cree? I expect my partner to be financially sound and care about their credit and how it affects us. Love that. Love that. That's a round of applause right there because that took a lot and that was amazing. What did that feel like to say, Cree? It felt pretty good, actually. Wow. I like that. April, what does it feel like to hear that? It doesn't hurt. I love a challenge. So if this is the standard, come on, let's go. I got it. Whoa. That is powerful. A lot of people are actually motivated by a big, clear challenge. April's saying that point blank. Okay, April, you've heard what Cree has said. Obviously, this communication is new. it's going to take some work to become crisper but i love where it's going april you know what cree is asking for now i want to ask you first of all do you feel you can meet that standard of course love that confidence can you meet the standard before you are planning to move in together in may yes wow love it okay can we go and actually build the plan right now yeah oh All right, I'm getting excited. Damn. Okay, so I want you to tell me conceptually what will your plan be to meet Cree's standards and more importantly, the standards that you're going to set for yourself. So the first thing she said, she talked about credit. I know that my utilization is extremely high, and that's one of the biggest things that's impacting my credit right now. So I need to pay off my cards. I need to stop using them, and I need to just throw money at them. Okay, so you're going to pay off the debt, stop the spending. What else? After the credit cards, I need to reach out to my lenders on those student loans. I said I was going to talk to my employer and see if there's a benefit there with some forgiveness of my student loans. I don't know, though. I think my hospital is for profit, and I don't know that that's a thing. And then somebody else mentioned maybe getting a part-time job at a place that does offer that. It might be worth it. Okay, that's an option. I agree you should talk to your employer and your lender. Yes. Now, I have a couple of questions. One, what about your savings? You have zero dollars in savings. I feel like paying the credit cards off is the priority right now. Now, once those are paid off, then, yeah, savings. Hold on. You have $5,430 of discretionary income per month. You have roughly $10,000 in credit card debt. It's not like we have to only do one thing. We can do both things. We could do one thing faster if we put all our eggs in that basket, though. So if you have $5,430 a month, you should actually be thinking about how to pay off your credit card debt aggressively and build up savings. Because a healthy mindset is doing these things consistently every single month. I think my extreme approach is part of the reason why I fail a lot at this. Yes, great insight. That's totally true. So being more reasonable, even if it means you pay a little bit more in interest, so what? At least we got a long life ahead of us. You got to sustain this and actually enjoy it for like 30 plus years. So let's find a way to do it all. All right. You're paying $400 a month to your debt. Oh, yeah. I have medical. I have like some medical things and I have some I had some high like payday type loan things. And so I'm making payments on some of that. stuff too. How does somebody who makes $192,000, how are you comfortable taking payday loans? I did. I wasn't always making this money. I just got my nursing license a few years ago. I worked three jobs to get through nursing school. I appreciate that. The way you are treating money now is like you are poor and you're not poor. I need you to set the standard for yourself higher because you actually told me you will meet a standard. You love a good challenge, but I think that you, you have not set any standards for yourself financially speaking. And instead you're just like, yeah, I'm going to like have a blast. I'm having fun, et cetera. And that's not the standard that Cree wants. And this isn't infinite money. It's going to stop when you get sick, when you get older or something happens. I can't make you see that, but candidly somebody who make $200,000 a year, they save a lot of money. They invest a lot of money. They have a big portfolio. So you decide if you want to be that or you want to be with a payday loan. All right. I'm going to pull up the CSP. You tell me how you want to change these numbers, April. What if we did 2,000 on the credit cards? And what if we did 600 for savings? Okay. Stand by. Yep. 600 for savings. You're at 24% for guilt-free spending now So that leaves me with per pay period to do all those other things that I been spending on What do you think about that I think it doable As working in healthcare I have the capacity to increase my income That would be great. I can pick up shifts. How much more could you make per month reasonably? I could probably make another $2,000 a month. $2,000 a month gross, and then when we net it out, how much would it be? um probably 1600 1600 damn that's pretty cool so you can make an extra 1600 are you do you want to do that yeah yeah and i have i have a business i have a side business that i i work that i didn't put in there it's inconsistent how much does it make i last year last year i made twenty five thousand dollars that's pretty good wow how come everyone's just like pulling money out of their couch and telling me about what's going on here because it's inconsistent so what inconsistent is still real. Here's the way to do it. You take, it might be 500 one month, 1500 another month. It doesn't matter to me. You average it out over the course of a year. And that is your number. If you want to be conservative, you're like, look, I don't know, it could be between 25 and $50,000. Maybe you pick 35,000, a number that you're confident about. And then you make a rule for what to do with any extra money that you might get. like example rule would be anything above 35,000 I'm putting 90% towards debt and 10% I'm going to use to go have a great time that's the kind of rules that we're talking about here all right so the fact that you can make an extra 1600 a month plus another 1600 a month net that's an extra 3200 a month what do you want to do with the money potential I think I think what you said with the rules would be better. I think maybe 50% towards debt and 50% towards my guilt-free spending. No. No. Sorry. Close though. 50% towards debt. I like that. I like that a lot. You can knock this debt out so fast. It's unbelievable. You have a high income. I think you need to put more money towards savings and you can give yourself a little bit of guilt for spending. If it were me, I would do something like 50% to debt, 40% towards savings, and 10% towards guilt-free spending. That's my take. It's up to you. But what do you notice about the numbers that I chose? You're more aggressive with the goal and less with the guilt-free. Yes, yes. So you can clearly see my priorities from the numbers I chose. One common mistake people make is they one they try to sprinkle a little bit everywhere they're like i'll do 10 10 10 10 10 i like that that doesn't actually show any clear prioritization the second is they try to get one over on somebody like let me find a way to kind of like maneuver my way into getting what i want and i suspect there's a little bit of that happening right now what do you think april well there's a lot of that for sure that's my approach to money i think things i want to do I just work more so I can do more of what I want to do. Yes. That is how people who often work shift work think. They literally will be like, oh, for that vacation, I just pick up two more shifts. You think that way, right? A hundred percent. That's how I plan my vacations. Yes. I want to elevate the way that you think about money because you can think that way. You have been thinking that way, but you will never escape your financial current reality today. That way of thinking is actually a small way of thinking. And the rich life way of thinking is I am always going to set aside X percent of my income for investments, Y percent for savings. Any additional money I make, amazing. I'll take a tiny sliver of that and use it for fun, but I'm going to focus overwhelmingly on my goals. So that's what you can see from my numbers, 50, 40, 10. and 10% of additional money is still a lot of money. Still a lot. I can't tell you what numbers to choose, but just as a litmus test or just a check, what would you choose after hearing my explanation? 50, 30, 20. Okay. All right. I don't mind that. So 50% towards debt of any extra money you make, 30% towards a savings account, and 20% towards guilt-free spending. Perfectly reasonable. I don't mind that at all. Cree, how do you feel about that? That sounds good to me. Cool. All right. So if we are looking back at the CSP, I do want to add a little bit of that in. April, you said potentially you can make an extra $3,200 a month net when we factor in your business and your extra shift, correct? Yeah, that's reasonable. So we're going to take $1,600 and put it towards your debt, right? Damn, that debt is getting paid down fast. That's $4,000 a month. And then what did we say for the rest? We said 30% or about $1,000. That's going towards? Savings. Yep, nailed it. Damn, I'm loving that. $1,600 a month going towards savings. Great. And then? 20% for guilt-free. $3,430 a month in discretionary spending. That's like a lot of money. But you have to remember, I know you're like, that doesn't sound like a lot of money. That doesn't sound like a lot of money. It doesn't sound like a lot of money. Sounds like a lot of money to me. Yeah. What will have to change, April, in order for you to use that money in a way that is rewarding to you? I'm going to have to be more conscious of my spending. When she asked me, like, what did I buy last weekend on Amazon? I don't know. like I'm it's it's unconscious venting there's two ways you can do this one is like you sit there with a freaking magnifying glass and you look over every transaction it sucks nobody wants to do it especially somebody spending like six thousand dollars a month previously they're just not going to do it another way is to say what are my money dials what are the important things that I actually love to spend money on and let me actually prioritize though those and spend more on the things I love and then cut costs mercilessly on the things I don't. So what is the one thing you love to spend money on? Food, travel. Okay. If you had to pick one of those, which one's more important to you? Let's make my priority travel. Okay. Cree, would you agree with April's priority being travel? That's her money dial? I think so, yes. Okay. Can I just point something out? You have $3,430 a month in discretionary spending, April. If you decided this was truly your money dial and you were going to cut back mercilessly on other stuff, you could theoretically spend like $20,000, $25,000 a year on travel. Wow. That's impressive. What does that tell you? That I need to figure my stuff out. You can do that, April, especially in your situation. You can pay off the debt, which is what Cree wants. That's her expectation. You can take control, but you have to actually be honest about what's important to you. How are you going to make the changes that will allow you to travel, but not spend as much on other areas? Like I need to automate the savings, like the dollar amount that we agreed on. Like I need to just automate that as a direct deposit. So this is going to be automated right here. Look at the emergency fund. That needs to be automated immediately. $1,600 a month, boom. One of the characteristics of people who live a rich life is they have clarity and simplicity. Clarity means they know exactly what all this means. Simplicity means they simplify things. They do not overcomplicate it because they're not going to remember what this means two months from now. And they have control over their income as much as possible. I feel like once I really hone in on my priorities and like really focus on the goal, the challenge that has been laid out and the goal that needs to be met, I think I'll feel better about not spending so much. Yes, I think that's true. I love that. And I actually think being able to see every single month in a separate account called, you know, Thailand Trip or whatever it is, seeing that number go up every single month by $800, possibly more, is very, very powerful. One other thing, if this all works and you move in together, a lot of these costs come down, right? What do you think? Now, I mean. I still got to pay rent. Yeah, but you were going to rent your spot out. Yeah, I was. So that goes way down. That's a lot. $1,700 a month, assuming you can get that. How much can you get to rent your place? I could probably get $2,000. All right, so there you go. I can just see the milestones in this plan. The credit card debt gets knocked out very quickly, like two and a half or so months, three months. Then you're moving on to the next high interest debt, probably the car. simultaneously talking to the medical debt folks, buy now, pay later, that gets paid off immediately and you get rid of those apps. Stop using the cards until it's paid off. Yes, I said it. Then you take that money as you kind of fix one and pay it off, then you move on to the next and the next. With the amount of money you have, you could become so aggressive with this debt. You could even pay your mortgage off and student loans off quite quickly. It's really amazing. There is one thing missing from this, which is your investments. My 401k doesn't count as an investment? It does count. It actually is great that you have 800 bucks a month, but that's not enough. You know, you're starting to invest aggressively in your 40s. You need to invest a lot of money and quickly. So getting rid of the high interest debt makes a lot of sense. But after you finish the high interest debt, which I define as anything over 7%, putting the majority or a lot of that money into your investments will be critical. You actually have the ability to invest over $5,000 a month. And candidly, you're going to need it because you don't have a lot of time for that money to compound. Now, as for the two of you, there's a relationship question here as well as a money question. You have this concept of moving in together in May and then potentially getting married. Can we come to a decision on what that looks like? Like, is it going to happen regardless? Are there things to talk about? Let's do it right now Yeah, I definitely think that I want to make sure that I meet the challenge that she has put out In terms of my credit, in terms of a plan to reduce my debt Because I feel like when I can show that I feel like she maybe will feel less of the need to grandma my spending if it looks like I'm managing my finances more effectively. I love that. April, can I say something for you as well? It's okay for you to have standards too. I encourage it and for you to have boundaries. One of them might be, I don't want you to question my spending. Once we agree on a plan, I'm going to show you the plan. I'm going to update you every Friday or every other Friday, whatever you decide. But what I need is for you to be supportive. and if you see me making a purchase, I need you to trust that it is part of the plan that I am already updating you on and I don't want the questions about why did you buy that. That's a perfectly acceptable boundary. How do you feel about that? I love it. Okay, then you should put it into play because it's not just one person who gets to set boundaries. Both people. And that actually makes a really healthy relationship. You both are just sharing, here's what I need. And it's totally okay and you can discuss it and you can negotiate if you want to, but it's both. Okay, cool. Cree, was there anything from your end that I didn't capture already? As far as on my end, I definitely need to get way more aggressive on my investments. I've been putting all this money towards paying off the car, but investments are just as equally important. Yes. You can end up debt-free and you can lose the entire game. Right. and most people who grew up without a lot of financial education the only thing they were told same as your parents money doesn't grow on trees save save save pay off debt but the point of life is not to end up debt free the point of life is not even to save a huge amount of money the point of life is to use our money to live a rich life and that means we got to save we got to invest we got to manage our debt even if we have a lot of debt you can still live a rich life because you have a plan. You know the exact month and year you're going to be debt free. But you can't just pay off our debt and go, I won. No, you didn't. Winning is looking at all of these things in its totality. Could we look at my spending plan? Yeah. And I kind of want to do some plug and play like she did. Hell yeah, let's do it. I love that you're asking. I'm going to pop it up here. All right, tell me. Okay. So if we're looking at the extra $1,200 a month. You mean this? That's what I'm working with. Okay. So I'm putting like $1,000 towards the car. What's your car loan interest rate? 7%. All right. What do you want to do? I still want to put a lot towards that, like maybe $700 and then do $300 in investments. You're currently paying $484 for your car payment, right? Correct. And how long will it take you to pay it off? Six years. But I was trying to aggressively pay it off in three. Why? 7% is ridiculous. I've never paid that much for a car. And it's just because rates are crazy right now. How about making 7% in the stock market? You're right. Yeah, you're right. There's that. I don't mind if you want to put a little bit extra towards it. That's fine. Let's add 100 bucks. All right. That's fine. But let's put more towards investments. Okay, so what do we think? 800 there? Let's try it. Watch this. This is the number to keep an eye on. The number is typically between 20 to 35%. You are behind on retirement investments. So we need to get aggressive. I don't mind seeing that number come down to 15%. So let's try 800 bucks. That's about right. That takes you down to 17%. You have your emergency fund, which you can aim for maybe 12 months if that's what you want to do. I think that's... That's what I was doing. Great. I think you have a nice cadence. You already have 10 months and it'll take you a little while to make it 12, but that's perfect. $50 for gifts. Okay, fine. $125 for vacations. Also fine. What do you think about this? Yeah, I can work. I can work with that. Look at April's face. April. That's $200 a week. I usually get by on $100 a week. Okay, time out. We don't talk about anything on a weekly basis. Weekly is for people who don't make a lot of money at all. We don't ever do that. Another way I want you to elevate, we talk about monthly and more commonly yearly. You cannot get ahead. You can't drive to work if you're only talking about what happens five feet in front of you. It would be ridiculous. We talk about miles when we're driving. That's the same way you talk about building a long-term plan. Now I agree. $794 a month is not a lot for guilt-free spending. And that's what April's reacting to. April also is probably thinking, holy my partner only can spend $800 a month. What kind of lifestyle does that leave for me? Right. April date nights looking real slim. Bingo. So can we talk about this? Cause I think this is the real stuff. yeah here's the fact one of you makes 56 75 some number like that the other makes almost 200 000 a year we're not talking about like a difference of 10 000 we're talking about over 100 000 a year that is a different level of income the two of you are going to need to discuss how this works because purely based on income you're not at the same level but what's interesting is that the lower earner has way more net worth so that really shows the power of consistent investing and saving, et cetera. If you were strictly going off of 50-50, you cannot afford to take the same type of vacations. Just think about it. April's putting aside like 800 or so dollars a month for vacation. Cree's putting aside 125. That's not at the same hotel. That's not the same destination at all. You all realize that, right? Yes. So you will need to figure out a solution. It might be that you travel less frequently. It might be that you stay at cheaper hotels, or it might be that one person pays more. I don't see that it's been an issue so far, though. Great. Then let's not make it an issue. Life is hard enough. Really don't like I know how to if I if I know in enough time that we're going somewhere, I can get the money. I love that. God, that's the kind of attitude I love. It's like, look, I don't know. We're not taking a step back in our lifestyle. No. Whoa. All right. That's kind of cool. That must be cool for you to hear, April. Right. So Cree's like, look, it's not all you who has to do work. Cree's like, I'll do it. I'm willing to put money aside. I can pick up more shifts too. Can you pick up more shifts and invest more? I can, yeah. And please do. And I'm going to be getting some raises at my other job that's coming soon. All right, listen, invest a lot more, okay? By the way, when the two of you work on this, I wouldn't mind if April goes, hey, listen, Cree, I respect you have your standards for what it's going to take. But April's like suddenly April goes, and here's my standards. I need you to be investing even more than you're currently investing. You can both set standards and the type of lifestyle you want. This is the time to be honest about it, because if you truly combine your income, which I highly recommend, certainly you should combine some of it when you move in together for your joint expenses. But then when you get married, I would highly recommend doing it. As I describe in my book, you're all going to make almost three hundred thousand dollars a year. That is a lot of money. At $300,000 a year, you should be investing a huge amount, massive tens of thousands of dollars per year, massive. You should be saving massive amounts and you can afford to spend, but not as much as you think up front because you have a lot of debt. Right. Something to think about. What else, Cree? Well, once I get the emergency fund up to a year's worth of expenses, then that money can go to investing as well. Yep. Agreed. That's your $100 a month. Right. Yep. You know what's going to be the problem? The problem is going to be eating out. That's what it almost always comes down to. It's literally people spending a ton of money like 10, 20, 30 times a week eating out, and it's not even part of their rich life. That stuff is going to be your trap for both of you. And so you will have to make a plan. Did I answer your question for you? You did. Yes. Thank you. Well done. All right. April, did you have any questions that you wanted an answer to that I didn't get to? No. I think we got deep into April's numbers. We plugged and played. Okay. I like that. when the two of you talk, I would like for you to have a crisp answer on what will it take for the two of you to move in together and both feel good about it. And if that is the first major milestone, then I would encourage you to break it down into sub-milestones because you don't want to get to April or May and be like, oh, is it happening? I thought it was. Well, it's not. And you have a big argument. We don't want that. We want to know on a regular basis, monthly. There's like a scorecard on the fridge. Here's what we're aiming for. How are we both doing and performing? Don't worry if it feels a little weird, like we've brought the workplace into our home. In a relationship, we are building a business together, the business of running a household. And that means we need to pay attention to certain numbers and make it work. I think it would be super constructive, especially in this journey from here until moving in together, and then maybe afterwards as well. But like what a way to amplify this journey you're about to go on. I feel relieved that I got through this and that I got something out of it, something that I can work with. I have like a I have a blueprint. Great. Cree? I feel like I have a better understanding of where my money needs to go and I need to not be scared to invest. Beautiful. Beautiful. a lot of changing the way you both feel about money. What I really wish for the two of you is to go from hot to cool. Cool, the way I describe it is cool is in control. Cool is, sure, I could buy that thing. I could, but it's not for me right now. I have a bigger vision. And then when you do go and buy that thing or take that trip, you truly enjoy it because you know you've saved for it, you've planned for it, and you can be there, and you don't have to order the cheaper thing on the menu when you're on vacation. You can get the stuff you want. That's the rich life that I wish for both of you. Cree and April thought that their problem was that one's a saver and one is a spender, but that was not really the story. Cree saves out of fear. She worries that if she lets go, everything could collapse. April spends to feel good, comfort, control, even if it pushes her deeper into debt. By the end of our conversation, I was very pleased to see that they finally got real with each other. Cree said that it scares her to build a life with someone who doesn't take money seriously. April admitted, I need to change. If April sticks to her plan, she can change her financial future. And if Cree sets clear boundaries, they can actually use money as a way to come together, not as a wedge that's keeping them apart. Most couples never get this far. They stay stuck at level one or two. They fight about some random item and they never talk about going deeper. But I have to say, these two took the first step. So now let's check out their follow ups. Hey, Rami. Cree checking in. I've been just kind of finalizing some of my numbers. April and I decided to do a weekly financial check in. So that's coming up on Sunday. So I'm getting prepared for that. um looking at my numbers I have raised my 401k up about 13 percent um on my Roth IRA I've gone from $100 a month to $800 a month and I'm still going to contribute some extra money towards my car loan because I really do want to pay that off early but the bulk of uh things that I'll be contributing to will be my Roth IRA my 401k I'll put a little in my savings and then some towards the car so i feel like that's a good a good place to start and i like the way these numbers are looking so also just wanted to thank you for taking the time to meet with us we've really appreciated your advice and we've kind of taken it to heart and i really feel like um we have the tools that we need now to grow together as a couple um in our relationship and moving in together and just continuing to live our rich life and you know do the things that we love to do but also meet our financial goals. So thanks a lot for that. And we'll be talking soon. Thanks. Bye. For me, the biggest insight that I took away from our time with Ramit was that my financial issues are fixable. When he broke down the numbers for me of what the monthly payment could look like and that it's a monthly payment that's within my budget and the time frame that it would take for me making those payments to be debt free, I was really surprised because I really thought my student loans were so big that I was just going to die with them. I had zero hope of ever getting debt free. So that was a huge insight for me. As far as changes I made with my finances, now I contribute $1,000 per pay period toward my credit card debt. And I've been contributing $500 per pay period towards savings. So that's huge for me because I had zero savings to make, to create that money. I've been eating out less. I didn't ever cook at home. And so now I've been trying to make eating out my big win. And as far as me and Cree go, we have been having more money conversations, small ones, and it's been a lot less uncomfortable for me. I used to really dread the topic of my finances because I felt like they were such a dumpster fire. But now that I have a plan that I'm implementing, I feel less defensive, less embarrassment. I almost look forward to those conversations because it's like a chance for me to say, hey, I said I was going to do these things and look at me, I'm doing it. Thank you so much for seeing us, Ramit, and everything that you've done to help us. Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this podcast at IWT.com slash apply. Or second, you can join my money coaching program instantly at IWT.com slash money coaching. In that program, you get access to live virtual events, monthly group coaching calls, live Q and A's, and an amazing, huge community of other people like you. Check it out at IWT.com slash money coaching.