Episode 57. I feel ashamed about having another child because we’re still renting

Rebecca and Joe have two young kids, and a third is on the way. They are renting at the moment and love the neighborhood they live in—but they both think they need more space to match their growing family. Should they keep renting? Buy a home? Move in with his parents? Their lease is up soon and the pressure is on (or so they think).

To complicate things, we find out that their fixed costs, alone, make up for 105% of their take-home pay. As a refresher, I recommend spending no more than 60% on fixed costs. But they’re spending more than they make every month. Something’s got to give.

They feel frustrated. They feel overwhelmed. They feel like failures as parents because they can’t provide for their kids. There are many layers to this on both the financial side and the psychological side. Let’s dig in.

Tools mentioned in this episode


Download the full transcript PDF

Rebecca:  [00:0:00] This situation is not working. We have a two-bedroom apartment and we have a third baby on the way.

Joe:  [00:0:05] I can’t deal with the constant everyday 911 Fire Phone calls or texts when I’m at work about how insufferable our current living situation is. When I get the phone calls or the text of how terrible it is, it’s hard to turn off the part of my brain, do we have enough? Do we not have enough? Can we afford a house? Can we not afford a house? How much house could we afford? It doesn’t feel good. I don’t think it’s healthy.

Rebecca:  [00:0:37] The walls are closing in and the kids need something different than this. I’m trapped, I’m a caged animal, and I’m losing my mind basically.

Ramit Sethi:  [00:00:48] By saying all that, what do you expect him to do?

Rebecca:  [00:00:52] I expect him to help me or do something.

Joe:  [00:00:56] I don’t know what you want me to do. It’s like I can’t take it anymore. It’s such a broken record.


Ramit Sethi:  [00:01:11] My name is Ramit Sethi. And I find it fascinating all the invisible scripts we have about money. One of them goes like this. We’re about to have kids, so now we need to move somewhere with a lot more space. Makes sense on the surface. It’s how most of us have been raised. And yet it can cause all kinds of difficulties. Rebecca and Joe are 37 and 40 years old. They have two kids and a third on the way. And Joe currently brings in the household income of $93,000 as Rebecca is a teacher on extended maternity leave.

Well, the problem is, they love the area they live in, but they believe they need more space. And when I look at their finances, they currently spend 105% of their income on fixed costs. As a refresher, I recommend spending no more than 60% of income on fixed costs. They feel frustrated, they feel overwhelmed. They feel like failures as parents because they can’t provide for their kids. I want you to listen to the episode today to hear both the financial side as well as the psychological side of what Rebecca and Joe talk about. Make sure to listen to the end to hear the follow-up from Rebecca and Joe which you can get the full version of at iwt.com/episode57. You’ll also get other bonuses including my three-step guide to buying a house. Thanks for listening to I Will Teach You to Be Rich. Let’s jump in.


Ramit Sethi:  [00:02:51] If you talk about potentially buying a house, how does that conversation go?

Joe:  [00:02:56] Not well. We just have a lot of indecision. Do we have enough? Do we not have enough? Can we afford a house? Can we not afford a house? How much house could we afford? Usually, I’ll get a text message during the day about how insufferable our current living situation is because we can’t just open up a door and let our children run outside. We live in more of like an apartment building in a beach town.

Ramit Sethi:  [00:03:19] Okay, so Rebecca you sent a text to him and you’re not happy about your living situation, and then?

Rebecca:  [00:03:28] In moments, yeah, I’ll send him a frustrating text like this is miserable. I can’t do this. This is impossible. Almost blaming him he should provide something better for me because the walls are closing in and the kids need something different than this. I’m trapped. I’m a caged animal, and I’m losing my mind basically.

Ramit Sethi:  [00:03:56] By saying all that, what do you expect him to do?

Rebecca:  [00:04:01] I expect him to help me or do something.

Joe:  [00:04:04] I don’t know what you want me to do. It’s such a broken record. It’s like, I can’t take it anymore. I’m doing everything that I think I could do. I’m not sure how much of our money could actually be allocated towards putting a down payment on a house. I feel like we have enough money. I don’t know if it’s prudent to move money from different accounts in our savings to put towards the house. I don’t even know if now’s a great time to buy a house. I can’t deal with the constant everyday 911 Fire Phone calls or texts when I’m at work. I don’t go out and buy a house and then we move into it. It’s a partnership decision. So there’s got to be a little bit of ownership there.

Rebecca:  [00:04:47] I mean, I don’t know if we want a house. I don’t know if that is going to bring us happiness. I don’t know if the grass is always greener. But in those moments, it feels like this situation is not working. We have a two-bedroom apartment and we have a third baby on the way. So are we not giving our kids the space and the room to grow with– we’re not giving our kids what they need because we’re scared. So there’s guilt involved in it.

Joe:  [00:05:20] When I get the phone calls or the text of how terrible it is, it’s hard to turn off the part of my brain that’s like, I need to fix this situation immediately. We need to get a different situation. Not even to make it so much better, but to just make sure that these phone calls don’t happen anymore because they’re stress-inducing and it’s like a little bit of a hopeless helpless situation to be in. It doesn’t feel good. I don’t think it’s healthy. And it hasn’t moved us forward. I feel like we’re at the point where it’s got to change. If we’re a year later in the same position, we’ve taken it too far.

Ramit Sethi:  [00:06:01] Okay, got it.

Joe:  [00:06:02] It’s almost like if we get out of this right now and find the next situation and it’s good, then boom, we squeezed all the juice out of this lemon, and great, let’s move on to the next little chapter of our family’s life.


Ramit Sethi:  [00:06:16] Already so many clues. In just the first couple of minutes here from Rebecca and Joe, you can hear that this is a repeated dynamic, that Rebecca gets frustrated and sends these texts, and Joe just looks at his phone and size and starts to ignore it. It’s no surprise that couples disagree on money. That’s totally normal. Every couple does, but it becomes a little bit more problematic when you have a pattern where one person is consistently taking on the role of being frustrated, and the other person is looking at their phone and ignoring it. That’s a problem. Let’s keep digging in here.


Rebecca:  [00:06:56] I think really, yeah, like a third party to know what we actually can afford and moving forward on some big decisions as far as a living situation, potentially, like buying a home and how much we can afford and what that looks like. I have one foot out of here and one foot in here because I’m scared if we can’t afford a house, what will our living style be like? What will we have to give up to afford that house? And is that going to make us happy?

Joe:  [00:07:27] We’re at a decision point. We’ve been in this place before. Last year we were in a very similar situation where our lease was going to end and we had to figure out where we wanted to go. There was a lot of uncertainty, we were preparing ourselves to part ways with where we live because we do love where we live, we love the lifestyle, but we’re growing out of the space that we’re in. We’re not on the same page. I’m looking at different options. And sometimes when I bring up some of those options with my wife, the conversations don’t always go very well.

Ramit Sethi:  [00:08:08] What happens when you bring up topics like this with your wife?

Joe:  [00:08:13] I mean, she’s pregnant, she’s emotional. I love her for it. But it also makes things challenging sometimes when I’m just looking to throw some ideas out on the table, not necessarily like I’m trying to force an issue or put her i
n a situation that she may not want to be in or project some fear upon it being bad in the future.

Rebecca:  [00:08:35] It’s not necessarily the owning of a home or– it’s just shifting our situation. It could be a new really nice apartment or a condo. I don’t need to own a home. I could rent a condo, just a different type of space.

Ramit Sethi:  [00:08:56] Different type means bigger?

Rebecca:  [00:08:58] Yeah. I mean, we’ve gotten emails from our association, we hear kids screaming, we hear pounding on the floors, which is true because people live underneath us. So we stick out like a sore thumb here.

Ramit Sethi:  [00:09:13] Who’s the one who says we need to buy a house?

Rebecca:  [00:09:17] It’s almost as if we’re living like we have to do this, but we don’t necessarily have– if we didn’t live like we needed to do that–

Ramit Sethi:  [00:09:25] Who told you you need to buy a house?

Rebecca:  [00:09:29] No one, but there’s this stipulation we get a lot of comments like, “Oh, still in Asbury in two bedroom apartment with a third baby?” We get a lot of that.

Ramit Sethi:  [00:09:38] Who says that?

Rebecca:  [00:09:39] Friends, family, every barbecue, every family event.

Ramit Sethi:  [00:09:43] Do you know people say that to me too?

Rebecca:  [00:09:47] Do they say that to you?

Ramit Sethi:  [00:09:49] They say that to me, too.

Rebecca:  [00:09:51] Right. Just recently he was like, “We need to leave. We need to leave.” And I feel bad because I feel like I need him. I did this to him because I stressed him out so much with two kids in the apartment. And now we just looked at a winter rental in a town over for six months. So we’d be leaving our apartment paying more rent. It’d be a house, but it would be for six months and transitioning to babies and an infant.

Ramit Sethi:  [00:10:24] It doesn’t sound like a good idea. Making too many financial changes all at once is a big red flag. To have another baby and to move and to pay way more in rent would not be a good idea. It leaves no room for anything to go wrong. And that is how you get your back up against the financial wall. That is something I want you to avoid at all costs.

Rebecca:  [00:10:47] And you could correct me if it’s– I don’t want to open a can of worms, but it’s come up that so our lease is ending, moving in with my in-laws has come up. That would take away the rent. I’m sure we’d contribute in some ways with living with them. We have a little secret the two of us that we actually love our life here, but it’s almost like we can’t love it because it’s not what everyone else is doing I guess as far as friends and family are typical. We have a community here that understands the way we live. But–

Ramit Sethi:  [00:11:23] You love your life, but this is a 10 out of 10 financial crisis for you. I don’t know if I believe that.

Rebecca:  [00:11:30] I feel both ways because I want something different, but also buying a home and maintaining a home and whatever comes along with that doesn’t necessarily sound appealing to me. It doesn’t make me feel alive.

Ramit Sethi:  [00:11:50] If you had a magic wand, what would you want, specifically relating to housing?

Rebecca:  [00:11:56] We would have a house by the beach or in this general area right away with access to outdoors for my kids or our kids. But we love this area.

Joe:  [00:12:11] I would want a house one town over with enough outdoor space that we can afford. I want to stay by the beach. The beach is magical for us. In a lot of ways, we are living our rich life, but maybe we’re not internally always feeling it.


Ramit Sethi:  [00:12:29] Did you catch that? She’s literally describing where they live now. And she said, “A lot of ways we are living our rich life, but maybe we’re not internally always feeling it.” This is a classic pattern of many couples I speak to on this podcast. A common example is people who make a lot of money, but they still feel like they don’t have enough. As I always say, your feelings about money are highly uncorrelated with the amount you’ve got in the bank. Feelings are real, but that doesn’t mean they’re true. You might feel something, and that feeling is real to you, but it might not necessarily reflect reality. And so with Rebecca, I want to unpack her idea of this rich life and I want to understand a little bit more about the living situation.


Rebecca:  [00:13:20] It’s hard because I have mixed emotions. I love it, and I hate it.

Ramit Sethi:  [00:13:29] What do you love?

Rebecca:  [00:13:31] I love that we don’t live in suburbia. I love that it’s almost like a little mini city. I recently met mom’s friends here and I love her school. But there’s really challenging things. Doing laundry is really complicated and stuff like that, things that sound silly to talk about right now, but they can drive you insane.

Ramit Sethi:  [00:13:55] I don’t think they sound silly.

Rebecca:  [00:13:57] I need more support on what I do with our daughter all day and where we help with finding her school. I feel like their entertainment and their daily life is on me from 6 am until 6 pm until he’s home, and that’s a lot. I am their childhood right now and I’m not enough, and their safety. I can’t take them both outside and keep them safe sometimes. It’s busy streets. So a two and a four-year-old, down an elevator, out into streets that aren’t– there’s no controlled environment. So it tends to be challenging in this situation that we’re in. There’s no outdoor space.

Ramit Sethi:  [00:14:41] Do you know what you want?

Rebecca:  [00:14:42] Does anyone know what they want?

Joe:  [00:14:45] Yes.

Rebecca:  [00:14:46] Yeah?

Ramit Sethi:  [00:14:47] Yeah, not everybody knows everything about what they want, but a lot of people know where they want to live or what type of car they want to drive, or where they want to eat out on Thursday night.

Rebecca:  [00:15:00] Yeah. Well, I guess, I want to live here. I want to live by the beach, this area. I have a lot of friends here. I’m happy here, so I want to live here, just not necessarily this apartment.


Ramit Sethi:  [00:15:17] I’m fascinated that Rebecca sends panicky texts about needing to move somewhere. But when I asked a few questions, she and Joe both revealed that they love where they live. One big clue here is all the people around them telling them they need to move. After a while, that gets to you. That pressure to buy a house is real. But those same people whispering in your ear rarely talk about the actual costs of buying a house and the myths of buying a house. These are things that you need to know for the biggest financial purchase of your life. So if you’re curious, I put together a three-step guide for uncovering the common myths about buying a house. You can get it at iwt.com/episode57.


Joe:  [00:16:02] Part of the reason why we haven’t bought a home is because I haven’t felt like I had a large enough downpayment to put on it and I don’t want to touch any money that’s gaining interest.

Ramit Sethi:  [00:16:14] If you don’t buy a house, you’re not moving forward. Does that sound like something either of you might say?

Joe:  [00:16:24] Yeah. You know what? I do feel that way. We’re going to
have a third kid. It’s cool for another year or two, but past that, I don’t see that as being a good father.

Ramit Sethi:  [00:16:41] Why?

Joe:  [00:16:43] Because I loved growing up in a house with a basketball hoop in the driveway and I lived outside riding my bike and climbing trees and getting in the dirt, and I know my kids are going to love that too. I just know it. I would definitely feel like a failure. Anything that is letting them down is a failure to me.

Ramit Sethi:  [00:17:13] And to you, them not being able to be outside, climb trees, that would be a failure.

Joe:  [00:17:20] It means that I’m doing enough to support. It means I’m making enough, I’m working hard enough, I’m doing the right thing. I can do this. I can handle it.

Ramit Sethi:  [00:17:37] You’re a what?

Joe:  [00:17:39] Provider?

Ramit Sethi:  [00:17:40] Yeah. What’s a synonym for a provider in your mind? Who are the people who provide?

Joe:  [00:17:49] Fathers.

Ramit Sethi:  [00:17:50] Yeah. And if they don’t provide they are what?

Joe:  [00:17:54] Not a father.

Ramit Sethi:  [00:17:56] Really? I mean, I think your father one way or another.

Rebecca:  [00:18:00] No matter what.

Joe:  [00:18:03] Not enough, not doing enough, not cutting it.

Ramit Sethi:  [00:18:06] This idea about a real man, a real father, providing, I want to understand what providing means to you. So you want your children to be able to go outside, climb trees, be outdoorsy, I get that. It sounds great. Where does ownership fit into that?

Joe:  [00:18:29] I’m flexible with that. I really I’m because I’m not keeping up with the Joneses kind of guy. I look at no judgment, I look at people around me who are very concerned about our living situation while they’re living their own, and I don’t envy a damn thing about their lives. And no competition. I want everyone to have a great life.

Rebecca:  [00:18:57] I have a third pregnancy, our third baby as you know. And I immediately say to people, “Oh, this is the last baby. This was an accident. We didn’t mean for this to happen. And it hurts to say that. I’m going to cry because I’m pregnant [inaudible 00:19:09].

Ramit Sethi:  [00:19:10] Why do you say that?

Rebecca:  [00:19:12] Because I don’t feel like I have provided the right– there’s a shame involved in it.

Ramit Sethi:  [00:19:18] Why?

Rebecca:  [00:19:19] And I did always want three kids. The truth is that I’m one of three. I always wanted three kids my whole life.

Ramit Sethi:  [00:19:26] What’s the shame? I don’t understand.

Rebecca:  [00:19:28] I guess the shame is just like, how can you be pregnant again? We don’t live in a very kid-friendly apartment building. It doesn’t feel that way. I guess we don’t have the big SUV yet that all the moms of three have.

Ramit Sethi:  [00:19:49] Rebecca, do you see how deep this goes?

Rebecca:  [00:19:51] I do, yeah, it does go deep. And I want to say to people like, yeah, I’m pregnant with our third kid and I’ve always wanted three kids, and we’re excited. I haven’t said that one time.

Ramit Sethi:  [00:20:03] Can we do it right now?

Rebecca:  [00:20:05] Yeah, I’m excited because my dream is to actually have a third kid. I actually can’t believe I got to the point in my life where this even was possible.

Ramit Sethi:  [00:20:13] Think of the layers of how deep it goes. You told me that you are happy. You’re one of three, you always wanted three. The two of you live very joyful when you talk about your children. It’s sad that you describe words like shame because you don’t have some certain physical thing that probably doesn’t even fit into your lifestyle right now.


Ramit Sethi:  [00:20:36] In the same breath, Rebecca tells me that having a third kid is her dream, but she’s ashamed because they don’t have the SUV that all the other moms have. What! Keep listening.


Ramit Sethi:  [00:20:50] Rebecca, what would you say? When do you talk about the numbers?

Rebecca:  [00:20:55] We don’t. We did have a therapy session. And he did have a book and he had it all written out, but I just didn’t look at it.

Ramit Sethi:  [00:21:10] Any reason why?

Rebecca:  [00:21:13] It just makes me scared. I guess there’s something about change or just knowing– I don’t know why I didn’t look at it. Maybe I don’t want to know.

Ramit Sethi:  [00:21:30] Because what?

Rebecca:  [00:21:32] Because that would probably shift how I have to live.

Ramit Sethi:  [00:21:35] And if you had to shift that, what would that mean?

Rebecca:  [00:21:38] I don’t know. Talking to you now I’m like, oh, maybe– I saw it as negative. I’m not willing to give these things up.

Ramit Sethi:  [00:21:52] Who says to give anything up?

Rebecca:  [00:21:55] Well, no one. But sometimes when you actually see what you have– right now I just have a credit card. I’m not actually looking at a bank account. I’m not looking at it coming out. When you can see things, sometimes you see where you need to shift it. But if you’re not looking, then you can just keep doing what you’re doing.

Ramit Sethi:  [00:22:14] So how much money do you think that you have?

Rebecca:  [00:22:18] I don’t know. I honestly don’t know. I have no idea. I would literally be making up a number. I have no idea.

Ramit Sethi:  [00:22:23] So you have a four-year-old, a two-year-old, and a baby on the way, you feel stressed out and overwhelmed, and you have essentially no help. You don’t have somebody coming over cleaning, helping–

Rebecca:  [00:22:36] On a daily basis, yeah.

Ramit Sethi:  [00:22:39] And you never looked at the numbers of how much–

Rebecca:  [00:22:44] We never look at the numbers.

Ramit Sethi:  [00:22:45] Does this sound weird saying out loud?

Rebecca:  [00:22:47] It sounds so weird. Just recently I said to him, like, can I get an online– because with my old debit card, I’d look at it online like, oh, swipe here. And you can see like, oh, wow, I spent a lot of money there. You see it. But just recently I did ask him like, can I get it on my phone too so I can actually see what’s coming out of the card? There’s not a major fear with me, but I do think that there is a reason why I kept it separate.

Ramit Sethi:  [00:23:17] What is the reason?

Rebecca:  [00:23:19] Because I didn’t want him to see all the little things because he would probably make comments because now he’ll make comments here and there like, oh, I see I got a charge from this place.

Ramit Sethi:  [00:23:29] Like what?

Rebecca:  [00:23:30] Like Old Navy.

Ramit Sethi:  [00:23:34] How much would you say you spend per month on supplements

Rebecca:  [00:23:40] At least 250 maybe three.

Ramit Sethi:  [00:23:44] Are you nervous telling me that number?

Rebecca:  [00:23:44] No. It’s scary because I do believe in them. So I’m like, it’s like a crackhead. You don’t want someone to take your crack or te
ll you–

Ramit Sethi:  [00:23:59] Well, I don’t know if fish oil is the same as crack.

Rebecca:  [00:24:01] I’ll be honest, I lied the other– I didn’t lie, but I added something on for my sister too because I get them discounted and she then was me. I’ll dance around the fact that– or I’ll say, oh, that’s going to last us like six months. I ordered a bunch so I could–

Ramit Sethi:  [00:24:20] Did you lie?

Rebecca:  [00:24:22] Yeah, I guess you can go. I have ordered stuff from my sister, so I altered the truth. But yeah, I guess.

Ramit Sethi:  [00:24:32] I just want to point out for everyone listening that Joe has been literally covering his mouth in laughter for the last two minutes. He’s now covering his eyes with– he almost crying. He’s got a vein popping out on his forehead. He’s been dying to speak up. He cannot wait. Joe, please, what do you have to say?

Joe:  [00:24:51] I’m fascinated by this. I’m absolutely fascinated. I’m not even mad, but part of me feels like I should be because a lie is a lie. It’s just not a good idea. It’s not healthy. I don’t want you to feel like you have to lie to me. That’s crazy. I feel like you [inaudible 00:25:10] me like I’m the scary monster. I don’t want you having those feelings. I want you to know that I’m not that kind of guy that’s like that. I feel like you know that, but I don’t know [inaudible 00:28:34].

Rebecca:  [00:25:23] Basically I guess there’s guilt involved in the fact that– I made 65,000 a year or something and now I don’t. And I haven’t altered the spending. I haven’t changed, I haven’t spent less, probably more because we have kids now. So I worry that now we’re out that income and there’s no shift in the spending. It’s the same for me. So we can’t afford to–

Ramit Sethi:  [00:25:54] Rebecca?

Rebecca:  [00:25:55] Yeah.

Ramit Sethi:  [00:25:55] Do you remember what he just said?

Rebecca:  [00:26:00] That he’s lenient, and that he doesn’t– not really. Basically that he was lenient and that he feels bad that I have anxiety about it.

Ramit Sethi:  [00:26:12] And what was your answer?

Rebecca:  [00:26:17] I think my answer was that I haven’t changed anything in the past.

Ramit Sethi:  [00:26:26] How do those two connect?

Rebecca:  [00:26:29] That’s why I hide things I guess. I don’t feel like I’m being honest. I don’t shy away from him or lie because I’m scared of him because he’s mean about it, it’s because it’s my own internal struggle with, am I going to get us into debt or am I not providing– am I being selfish?

Ramit Sethi:  [00:26:58] Do you see why you have been reluctant to even ask the question, how much do we have?

Rebecca:  [00:27:06] I think it’s just fear based of knowing, or maybe fear of change, fear of no change.

Joe:  [00:27:14] Fear of being responsible or having to do anything differently.

Rebecca:  [00:27:17] Yeah.

Ramit Sethi:  [00:27:21] Think about that. That’s very profound– the idea that, if you engage with these numbers, if you even know how much you have, then what is the implication?

Rebecca:  [00:27:34] Responsibility. And I put that on him because I’m like, no– 

Ramit Sethi:  [00:27:40] Exactly.


Ramit Sethi:  [00:24:41] I think Rebecca talks a lot to escape her own contradictions because it’s easier to talk and to deflect the problem than to take a very quiet, candid look inside. She texts Joe about needing to move, but she loves their neighborhood. She asks about getting access to their money, but when she has it, she doesn’t look at it. And she lies about purchases. And all of this, of course, keeps Joe off base. Can you imagine if Joe was the one hiding purchases, and sending angry texts and demanding things, but then not looking at them? How would you perceive this conversation differently? Something to think about. For now, I want to understand where Rebecca learned about money.


Ramit Sethi:  [00:28:32] What happened with you and money when you were younger?

Rebecca:  [00:28:40] It was a scarcity thing. We didn’t have enough, it was always stress. My mom worked at Kmart when we were little like. She eventually got a better job. But money was very stressful. I was raised with a lot of guilt around money. Money was always guilt. It was like you just felt guilty. Money was a guilt. It was like a combination of that. I took a lot of the blame my whole life for my family and everything that went wrong.

So I guess I give it all to him now. I don’t want it. I’ve been there. My whole life was it can’t be on me, it can’t be on– because I felt like it was on me even as a kid. My dad was a state worker. My mom was a secretary. So they were very minimal. They lived very minimal. My mom also is very, like, we don’t spend money, very frugal. And I guess there’s like that, too. She’s in me like, you don’t pay for childcare.

Ramit Sethi:  [00:29:56] See if these whispers sound familiar. You don’t pay for childcare, you don’t stay in an apartment when you have three kids, what else do they whisper?

Joe:  [00:30:10] You need everything that they have or–

Rebecca:  [00:30:16] The pool, like–

Joe:  [00:30:19] You got to get your kids in exactly what we got our kids in, your kids have to be in dance now.

Rebecca:  [00:30:27] It’s endless.

Joe:  [00:30:28] You got to get the kids doing this. You got to get the kids doing that. It’s crazy.

Rebecca:  [00:30:33] We’re pretty good at not buying into a lot of that stuff. We were pretty solid on that.

Ramit Sethi:  [00:30:38] I don’t think so. Am I the only one who’s been here for the last hour and a half of this conversation? What are you talking about?

Rebecca:  [00:30:45] [Interposing voices 00:30:45] house. No, you’re right.

Ramit Sethi:  [00:30:47] What are we talking about? Rebecca, this is a story you tell yourself. Are you hearing yourself?

Rebecca:  [00:30:52] You’re right. Yeah, okay.

Ramit Sethi:  [00:30:56] You are driven by what people around you are telling you. The mom guilt thing is affecting you in so many ways that is not even apparent. And the whole point of my conversation with you is, I want you two to decide what you want.


Ramit Sethi:  [00:31:17] Rebecca and Joe tell themselves stories. Rebecca and Joe are experts at telling themselves stories about themselves, “We don’t really get influenced by other people.” Literally, everything they have said so far is based on what other people expect of them, “You need to be doing this. You can’t do that. You should be doing this.” And if you allow yourself to be surrounded by that, and to believe that, and to be influenced by that, then it can be a very dissonant experience for you if you want something different.

Anyone who’s grown up in a deeply religious household knows what I’m talking about. Anyone who’s grown up with parents who are deeply frugal and you don’t want to live that kind of life knows what I’m talking about. And that is exactly what we are seeing here from Rebecca and Joe. And rather than realize, this is what’s going on, they deflect. They point at other things. “Well, Joe’s not doing this, and I don’t have access to that.” And they even tell themselves stories, such as, “Well, I’m not really influenced by
the people around us.” These are all stories.

What you should take away from this is to ask yourself, “What stories do I tell myself about money?” Write them all down. If you get stuck, you can create one called a positive list of stories and a negative list of stories. What are the positive ones? “Oh, if I work hard, I can make more.” What are the negative ones? “Well, I’m not really good with money, I’m not good at math, I can’t earn more, I don’t know how to invest, etc.” And then go to sleep, wake up the next morning, have a little perspective, and say which of these are factually true and which of these are just stories I tell myself? You might be surprised.


Joe:  [00:33:07] Man, this is like my shit because I think that I could overcome everything.

Ramit Sethi:  [00:33:16] But you’re the hero.

Joe:  [00:33:19] It’s just how I was raised. That was the model I had, and I really respected that model.

Ramit Sethi:  [00:33:28] Tell me about that.

Joe:  [00:33:30] My dad did whatever he had to do, and he made it look really good. It didn’t mean it was the most healthy thing for him, it didn’t mean it was the most healthy thing for his partner. There’s a lot of enabling that happens there, but when shit’s got to get done, my inclination is not necessarily to rally the troops all the time. It’s like if no one wants to come, then I’m going on my own and I’ll do what I got to do.

Ramit Sethi:  [00:33:58] Joe. What was it like? What do you remember about money as a kid?

Joe:  [00:34:03] Very conservative. I grew up in more of a religious family. Mom stayed at home, dad worked for the government. So we had needs but not wants. But we also had a big family. So we had a lot of people that contributed, but my dad always just always made it work. He’s been playing whatever game he’s needed to play to make it work. My mom was the striver, the pusher and she would get her way and he would just go along with it and do whatever he needed to do to make it work. That’s how it was. We always knew that was an issue. We always sympathized with my dad and we didn’t always agree with how my mom spent money.

Ramit Sethi:  [00:34:59] Like what?

Joe:  [00:35:04] She’s very frivolous. We just didn’t agree with it.

Ramit Sethi:  [00:35:12] Anything you remember? Any example?

Rebecca:  [00:35:15] I can provide one.

Ramit Sethi:  [00:35:18] It’s always the spouse that knows the other person’s family better. Rebecca is like, “I got one.” She’s just itching to go. Rebecca, go ahead. What’s your example?

Rebecca:  [00:35:31] His parents are in their late 60s, 70s and I still think they owe money on their house and they’re putting in a very fancy inground pool because his mom has a vision of the grandkids swimming in the pool.

Ramit Sethi:  [00:35:46] Joe, was your dad a short-term thinker with money or a long-term thinker with money?

Joe:  [00:35:54] No, he is an all, every-time thinker about everything. That’s his brain.

Ramit Sethi:  [00:36:02] What does that mean?

Joe:  [00:36:03] He’s an engineer who ran hospitals. So you’re dreaming up everything that could go wrong and then planning for it.

Ramit Sethi:  [00:36:11] But then how come he ended up still owing money in his 60s or 70s?

Joe:  [00:36:17] You’d have to ask him that. He made peace with it. He still has a plan. They’re moving in the right direction, I would say. There’s been some major breakthroughs, but they took 60 years to happen. And as far as at this point in their life, they pretty much have the right to do whatever the hell that they want.

Ramit Sethi:  [00:36:45] What lessons do you think you took away from your parents when it came to money?

Joe:  [00:36:51] In a lot of ways I learned how not to be, but then I also may have overcompensated a little bit. I’ve gotten really tight, not tight with money, but I think it’s smart. I think my dad is smart like, don’t buy things you don’t need. I never bought things I don’t need. Things don’t appeal to me. But also my mom made a really nice home too.

Ramit Sethi:  [00:37:18] What’s the part where you learned not to do?

Joe:  [00:37:21] Mostly like the spending aspects of it, not to live outside your means. I think when you’re going to give, you should have it to give. If you don’t have it to give, unless it’s a one-off, there’s a compelling reason where you just put your hand in your pocket, I believe that if you don’t get it, then maybe get yourself in a different position.

Ramit Sethi:  [00:37:52] I totally agree. I think that’s smart. But you also mentioned spending. You intimated that you should keep track of spending.

Joe:  [00:38:03] Sometimes you got to part with money. And I don’t give myself permission to make purchases sometimes. The more money in the bank, the better I feel. I always want more money in the bank. I don’t necessarily want to buy anything with it.

Ramit Sethi:  [00:38:20] And when are you going to feel good about the money you have in the bank?

Joe:  [00:38:25] When someone convinces me I should feel good about it.

Ramit Sethi:  [00:38:29] Well, who’s going to do that?

Joe:  [00:38:31] Well, it’s something you would a little bit, but it’s financially prudent to have enough savings. We got an emergency fund. I’m lucky to have a job where there’s so much forced savings for pension, there’s for savings in an annuity, there’s for savings for emergencies, and then I on top of that force myself to save. But we’re also not moving forward.

Ramit Sethi:  [00:38:59] I’m just the mom who’s like running around going to preschool. That’s what I’m doing. And the crazy part is that I’m capable. I’m not a clueless person. I’m a very calculated person with things, but for some reason, the most important thing in my life I’m missing.

Ramit Sethi:  [00:39:18]  All right. So you filled out a conscious spending plan. How was that, by the way, to fill that out together?

Rebecca:  [00:39:26] He did it.

Joe:  [00:39:28] I filled it out. I had to do it at work.

Ramit Sethi:  [00:39:31] Okay, it’s like number one.

Joe:  [00:39:33] I think that we’re at a point now where we used to be saving more and now we’re just at status quo.

Ramit Sethi:  [00:39:41] So have you seen these numbers, Rebecca?

Rebecca:  [00:39:45] No.

Ramit Sethi:  [00:39:46] Okay. Do you have the document in front of you?

Rebecca:  [00:39:49] Here’s the thing here, no.

Ramit Sethi:  [00:39:51] And Joe, you pick up on that, and you take on the role of the hero. So she’s avoidant and you go, “Oh, yeah, I’ll do it. In fact, I’ll fill out this conscious spending plan because I don’t want you to have to worry about it. I’ll fill it out.

Joe:  [00:40:08] And I be honest about that.

Ramit Sethi:  [00:40:12] Yeah.

Joe:  [00:40:12] It’s not that I was taking it off her plate. The truth is, I knew she wouldn’t have anything to do with it and I just had to do it. It wasn’t like I’m not thinking hero guy.

Ramit Sethi:  [00:40:22] Joe, that’s exactly what being a hero is. If you didn’t get this conscious spending plan done– first of all, the whole point of this is to do it together. That’s the whole en
tire point. If she refused to do it, we wouldn’t have had this call. So there was actually consequences. And instead of letting her face those, and not just being punitive, hey, we have this opportunity together. You did what?

Joe:  [00:40:50] I took care of it.

Rebecca:  [00:40:54] Yeah, and I’ll be honest, I did almost sabotage the meeting. Before it there was a lot of almost sabotaging this experience. So it’s interesting now that I’m connecting it all. I made horrible. I was hungry. I had to drive the kids to his parents’ house, he inconvenienced me, he should have waited till a better date to schedule this. And he wasn’t focused on my needs and all that, but I think the truth is that I don’t want to be responsible. This is something I’ve run from for years, so I knew tonight would probably change something.


Ramit Sethi:  [00:41:44] This is quite a moment, don’t you think? As Rebecca is saying that she’s realizing that she does not even have access to her own motivations. In other words, she behaves in certain ways that she’s not even fully aware of. Well, we all do to some extent, maybe not as egregiously as Rebecca here, but we all do this. I personally think it’s pretty amazing to hear Rebecca realize that live in front of all of us. 

This is the beginning of change, to be able to make those connections, and realizing why she behaved in a certain way. And then, of course, it takes a lifetime to be able to unpack those and likely to work with a therapist and other professionals to understand how to connect your emotions with your behavior. But for now, this is quite a major revelation. I want to shift gears now and talk more about their finances.


Ramit Sethi:  [00:42:43] You guys want to look at some numbers? How about that?

Joe:  [00:42:45] Yeah.  

Ramit Sethi:  [00:42:46] Go ahead and open that up. I’d like to read off row 7. It says total net worth in the conscious spending plan.

Rebecca:  [00:42:54] 351,000. I don’t even know how we have that much.

Ramit Sethi:  [00:43:02] What’s going through your head right now?

Rebecca:  [00:43:15] Because I’m avoiding this, I actually don’t realize what we actually can have. I think I’m getting more by hiding from it, but it’s I’m actually getting less.

Ramit Sethi:  [00:43:31] Well said. That’s powerful.


Ramit Sethi:  [00:43:33] Right there another amazing moment. Rebecca finally opens up the conscious spending plan, looks at it and realizes they have more than she even realized. For years, she’s been panicking about money and now she finally sees the amount they have. Of course, we all know that won’t change the way she feels about money today, but at least she can realize that there was a disconnect between how she feels and what they have in the bank. 

Now, I want to summarize their numbers for you. They make 7,800 a month for a total of $93,600 a year. Recall again that Rebecca is on maternity leave. They spend 105% of their income on fixed costs. So I want to zoom in on that home expense because that is the key driver here. And again, if you want to learn more about housing expenses, should you buy a house, what are the myths around them, how much can you afford? get the guide that I put together for you. It’s free, iwt.com/episode57.


Ramit Sethi:  [00:44:33] So I am adding your rent, plus your utilities and I’m dividing it by your gross monthly income to see that you’re at 33%. So that’s pretty much the high end of what you can afford for housing. So remember how you were all talking about going and buying this mansion and all that stuff?

Rebecca:  [00:45:01] Yeah.

Ramit Sethi:  [00:45:02] Well, if you can find one for less than 2,350 a month, great. Do you think that’s going to happen?

Joe:  [00:45:07] No.

Rebecca:  [00:45:08] No, not right now.

Ramit Sethi:  [00:45:09] Exactly. So sometimes our decisions are made for us. You can talk about it all you want, but the numbers say you can’t afford it, not with the current income, one income that you’ve got. This is what we’re driving towards. We need clear, simple money rules.

Rebecca:  [00:45:24] Yeah, like even diapers, because diapers are part of groceries. It’s like, how much are we spending on diapers a month and can it be cheaper? Because I’m buying them randomly, so I think if we just bulk bought them– it’s insane how much actually we spend on diapers.

Ramit Sethi:  [00:45:44] Joe, do you see what’s happening right here? What do you notice is happening right here?

Joe:  [00:45:49] She’s thinking of more frugal ways and other ways to save money.

Ramit Sethi:  [00:45:53] Yes, she’s taken ownership. Rebecca, it’s awesome to watch you do this.


Ramit Sethi:  [00:45:58] There’s something very powerful happening here. I want to make sure that I call it out. Rebecca has been the one who’s been frustrated about finances, sending these panicked text messages, asking for access to the money, but when she actually gets it, she doesn’t look at it. So something is not quite clicking here. But what we also learn is that Joe is playing a part. Whenever there’s a financial issue, what does he do? He takes charge. Even for this episode, for the conscious spending plan, they were supposed to both do it together. She didn’t want to do it. She caused some issues that day. And so what did he do? He said, “I’ll take this off your plate.” So you can see that in this case, it definitely takes two to tango. But what we just saw is Rebecca actually engaging with money. Joe’s not trying to save anything, he’s not trying to do it for her, she is stepping up. This is a magical moment.


Ramit Sethi:  [00:46:57] When you look at these numbers and you think about where you spend your time and your energy, where you are frustrated, do you see anything that surprises you?

Rebecca:  [00:47:09] That we have the money for child care because that’s my 10. It’s not the house. It’s how are my children spending their life? And it doesn’t have to be the best moment every second of their life, no, but we can afford to get them more care. And I think that that would also just transform the relationship because I wouldn’t be so uptight and stressed. I have a personality again because I don’t have one right now. I have one, but I’ve so under-living for so long now that I don’t even have a concept of that.

Ramit Sethi:  [00:48:02] What would it take for you to get that personality back?

Rebecca:  [00:48:06] I think an extra set of hands. It doesn’t really take much. My kids need a one-on-one. So just someone else to come.


Ramit Sethi:  [00:48:19] This is one of my favorite things to do is to use money to provide immediate relief. We all know what it’s like to be overwhelmed. It could be at work with tons of emails, and you just don’t have time to be able to think creatively. Certainly, as a parent, being overwhelmed with two kids and another on the way, it’s very difficult to think creatively or to be able to have any time for yourself. And so to be able to buy some of that time back would be one of the most rewarding things that Rebecca and Joe can do with their money.


Ramit Sethi:  [00:48:54] So, Rebecca, you say you cannot afford a babysitter?

Rebecca:  [00:48:59] I never actually allowed myself to do the maths.

Ramit Sethi:  [00:49:04] You have a four-year-old, four years you’ve gone without doing that back of the napkin calculation?

Rebecca:  [00:49:10] Well, let’s say we got one for $20 an hour, and I use her for three hours. So that’s $60 for five days, so it’s 60 times five is $300. It’s not that much money. I’ve never actually said that out loud. I’ve never actually said the number out loud of what it will cost, yeah.

Ramit Sethi:  [00:49:33] Why do you think that is?

Rebecca:  [00:49:36] It’s the same way that I won’t look at the sheet that he wrote out, or I don’t have the app. Maybe there’s a level of like, I’m a failure because I can’t take care of my kids by myself. I need to pay someone else to help to do that with me. Don’t get me wrong. We definitely have help from in-laws and parents and stuff, but I’m angry and frustrated with him because I can’t do it and I’m angry at him for it, but I also haven’t owned it, and said, so there’s a level of just being passive aggressive with the whole situation.

Ramit Sethi:  [00:50:20] Rebecca, you’re about to convince him to buy a house when it turns out that a $20 an hour assistant for five days a week, the difference in spend is like a million dollars.

Rebecca:  [00:50:36] I know, it’s true.

Ramit Sethi:  [00:50:40] So do you see how you can go through life? I’m talking decades, I’m talking millions and millions of dollars, and never have these really simple conversations?

Rebecca:  [00:50:53] Yeah.

Joe:  [00:50:53] We can do it. There’s nothing stopping us from– I feel like a nanny is a solution. I don’t want to talk about it in terms of like, here’s the problem, this is the solution. But I feel like we’re getting on the same page, or what is the actual problem, it’s not necessarily where we live.


Ramit Sethi:  [00:51:12] What I’m trying to do with this exercise with Rebecca and Joe is to elevate them above the day-to-day frustrating emotions of money. It’s easy to be frustrated at things. Why did you buy that? Why are diapers so expensive? Why can’t we get a house, and on and on and on? Every single one of us has had some sort of disagreement about money and some sort of frustration, that’s normal. But if you stay there, you could blink your eyes and it’s 40 years later, and you are still arguing over the same $3 questions.

It’s one thing to feel frustrated. But isn’t it almost unbelievable that Rebecca has never run a back of the napkin calculation? That is because it’s often magnetic, it’s often hard to escape these feelings that are so frustrating and almost toxic. They pull you back. This is why you see a lot of people who are addicted to hate because it gives them something, it gives them a feeling of indignation, a feeling of meaning, a feeling of righteousness. And so they can spend their whole lives there. And I’m not just talking about financially, it could be politically
, etc.

But my job is to help elevate that, and to help them realize, okay, you can feel that way. I’m not arguing that you feel frustrated. But let’s also take a look at the numbers. Maybe there’s a solution that works. Now, those solutions aren’t always present. If somebody goes, I feel I want to buy two private planes, and I’m looking at their numbers, they make $105,000 a year, you’re not going to buy two private planes. I’m sorry, that’s reality. But a lot of the time, we might be able to solve some of these feelings of frustration or other very hot emotions by doing a little bit of analysis. And that is where money and psychology can work hand in hand.


Joe:  [00:53:04] No, my mind never went there because it was more like, get out of the crazy situation.

Ramit Sethi:  [00:53:12] Do you know why you immediately go to that?

Joe:  [00:53:18] Because that’s what made me feel like we need to move on more than anything is the discomfort and the way that she’s expressed it to me repeatedly over such a long period of time and with the emotions and the words on the screen she has has impacted me.

Ramit Sethi:  [00:53:40] And who else in your life was the fixer, the problem solver?

Joe:  [00:53:45] Oh, my dad.

Rebecca:  [00:53:47] It’s that, yeah.

Ramit Sethi:  [00:53:48] And what was the role of your mom? What was she doing when your dad had to fix the problems?

Joe:  [00:53:52] I mean, I can’t say she didn’t get her hands dirty herself because she absolutely did. She didn’t just bark orders. She ripped up carpets and whatever else she wanted done too and got her hands dirty. I don’t think I think my dad’s ever even had a want or desire, other than just please my mother.

Ramit Sethi:  [00:54:16] Right. And what did you say earlier about money about what you spend it on?

Joe:  [00:54:23] My money is our money. I spend money on gas, tolls, food, necessities and that’s it.

Ramit Sethi:  [00:54:32] Joe, do you see any similarities here between–

Joe:  [00:54:35] Of course.

Ramit Sethi:  [00:54:36] The beautiful part is you have the chance to write your own story, both of you together. And I heard it. The one thing I heard consistently is that both of you love your lifestyle. You live in a great area, you love the beach, I think you described it as magic. I know what that’s like. I’m very particular about the neighborhoods that I live in, like down to the intersection because I know the energy and what I want and I know that I don’t want to walk three blocks for that. I know what you’re talking about. 

But I hear you both being guided by a lot of frustration, a lot of overwhelm, and I hear a lot of contradictions, “We don’t keep up with the Joneses, but we’re probably being affected by our friends and family. It’s a 10 out of 10. It’s actually not that big of a deal. It’s okay.” Lots of contradictions. The good news is that we all have contradictions with money. Otherwise, we’d just be robots. The beauty is in the contradiction. So I don’t mind it at all. My job is to try to help you cut through all these stories that you tell each other and you tell yourself and get to the story that is most meaningful to you right now.

Rebecca:  [00:55:53] With this lease coming up, we don’t even have to sign a year lease. We can just keep going monthly. We pay our rent. There’s no major deadline here. Maybe nothing needs to change in this instant. Just because the lease is up and just because we have another baby on the way, the baby sleeps in the room with us anyway, whether we have an extra room or not for the first eight months, so it’s not like we need a bedroom. Our kids share a room and they love it. We can be okay right now. It doesn’t have to change right now. There are other things that we can change. I think it doesn’t necessarily have to be buying house.

Ramit Sethi:  [00:56:41] What else can you change?

Rebecca:  [00:56:44] How can we get our kids outside? What can we put them into? What can we invest in differently? So if we’re going to hold off on the house, let’s invest in getting our son on a basketball team. He’s two, but he’s whatever or a school for our daughter so she’s busy all day. So I’m at home in this apartment with them. It doesn’t necessarily have to be a laundry service. Maybe we can invest in a laundry service, so this way we can not worry about bringing those laundry to my parents’ house.

Ramit:  [00:57:23] Great.

Joe:  [00:56:23] My immediate vision is I still want to stay by the beach. I think we put too much pressure on ourselves and made this being that there’s a deadline coming up, we succumb to the pressure or succumb to the pressure.

Ramit Sethi:  [00:57:45] How did you do that?

Joe:  [00:57:47] Just because rather than consciously making a decision at any point of what we wanted to do or could do, we were letting the deadline be the decision maker/driver for us. So rather than being proactive, we’re being reactive. We’re not taking total responsibility. I feel like if we focus on me and you being good, and me and you being good with what we’re doing for the kids and focus our attention and resources on that, then I think the rest will take care of itself. 

I know there’s still decision making that needs to be made along the line because all we do is make decisions all day long, but if we could get rid of the crap, I think it would make space for us to be honest and open with one another. I don’t want the fear conversations. I don’t want any lies. You don’t have to be afraid of me. I don’t want to have to be afraid of you. I don’t want to be so reactive to your emotional bouts of frustration.

Ramit Sethi:  [00:58:54] Great. I love that you are now getting creative about how you can get to your rich life. You both have a rich life vision. I’m starting to hear some of it come into focus. A lot of it is very aligned, which that’s good. The more you design your rich life to be different for what you want and what’s right for your family, the more it’s going to become confusing, even ridiculous to the outside world. That’s okay. It’s not their rich life, it’s yours.

Rebecca:  [00:59:24] I appreciate that very much. I’ve actually never thought of it like that like, there was something as a mother I needed to give my kids, but it doesn’t have to be like a fenced backyard. It doesn’t have to be what–

Ramit Sethi:  [00:59:42] It’s up to you. It might be more important for you to take a huge one-month long trip every year with your family, or to send them to tennis camp, or to have your laundry done every single day and have somebody come over to help you clean the house. That’s up to you. But what I love as I start to really think about this, and I talk about it with my wife, and the two of you talk about it, oh my god, it suddenly feels like we are free from the shackles of society’s expectations.

Rebecca:  [01:00:13] Right. Yeah, I feel–

Ramit Sethi:  [01:00:20] What would the two of you do if you were totally free of society’s expectations?

Rebecca:  [01:00:26] I think I would actually make this a home. I’d put up pictures, and that’s me. He’s pushed for that, and I’ve always been like, no, I had one foot in one foot out because we need to go do what everyone else is doing. And this all doesn’t mean that this is the home for us right now. Anything can change tomorrow. But for this moment and for tomorrow it’s– but yeah, so I think just probably investing a little bit more in the actual environment that we are in.

Ramit Sethi:  [01:01:00] This sounds really nice.

Rebecca:  [01:01:02] Yeah, just making it.

Ramit Sethi:  [01:01:04] Joe, what about for you?

Joe:  [01:01:08] I’m happy to see a more relaxed look on my wife’s face.

Rebecca:  [01:01:16] Do you like it here? Could you see yourself?

Joe:  [01:01:25] The truth is, and you’ll probably attest to this, when I change my mind, I change my mind. I can change it back with the mind state that I change my mind into to be able to make this happen. And I’m not saying it’s a successful strategy was no, we’re out of here. We’re going to get out of here, and that’s it. That was my mind frame until even being posed this question, can I– if things changed around here, and we made it a little bit nicer, and we made it a little bit more organized, we do it the way that we should have done it for the past couple of years, then yeah, I would feel a lot better living here without sacrificing or giving up the life that we do have.

And honestly, our kids love it here too. My daughter says, “This is my home. I don’t want to leave my home.” And there’s two other things that she says. Not that we’re going to base all our decisions on our four-year-old Oracle, but her first two, and she’s got good sense. And if we make it better here for us, it’ll be better for them. They don’t care. They don’t know the difference. They don’t need anything other than us being more comfortable and to do the things that we do. And living here forces us to get outside I think a lot more than people that do live in houses. We live outside because we’re forced to get outside. In a way, It’s like a forced, healthy scenario. I believe that 100%.

But where I think the disconnect is maybe investing in some help for you to be able to get the kids out in a way that’s like, an extra set of hands with the kids and extra hard to love on them, and play with them. And then you’re not by yourself having to do it all along. I think that that would be money well spent. It is fine than a nanny, or a helper and legitimately pulling the trigger on that.

Ramit Sethi:  [01:03:52] I think it’s really beautiful to hear you both look at your living situation with a totally different lens.

Joe:  [01:04:00] We’ve tried purchase by purchase agonized over things, spent way too much energy and emotions on stuff that should have never happened. And if we can align on this and just know what our spending plan is, and stay within it, I think it’ll be like taking that level of control over our finances, and we could find out what it is that we can actually afford. I feel like it’s not even you. I feel like whatever is preventing you from hearing and listening to me it’s not a choice. I feel like there’s just some program that’s running, some defense mechanisms, some something, but what I said before was that I don’t want to live in a world of blame or fault or anything. 

It’s just like, too little to like detectives, like ha, what’s going on right now? Calming ourselves down to talk about it to get to the bottom of it. And whenever we feel blame or words come out that are describing blame, or some dynamic like that, that’s the trigger like, “Oh, wait, that old thing’s happening again. Let’s calm down and just get out of the blame fault thing because the blame fault thing is a huge barrier to freedom and everything.”

And I don’t know if I want to be able to do my part as a husband and a partner and a friend. That’s what we should be investing our money in is helping with or seeking the right help with those kinds with specifically blame. I’ve thought of that, it’s come up a bunch of times in this conversation. And it’s not new to me, it’s not like this is something I’ve never thought of before. But I’m seeing how it comes up in everything, and it is such a block. It’s like you just don’t want to be blamed somehow. You just don’t want to feel like it’s your fault. And I think that’s trauma, to be honest with you. And I want to help you with it. I don’t want to enable it. I don’t know specifically what to do or how to do it, but–

Ramit Sethi:  [01:06:24] You want her to get help. It may or may not be you helping her, you may want to support her, but you want to encourage her to get help, right?

Joe:  [01:06:37] Yeah.

Ramit Sethi:  [01:06:38] That’s different.


Ramit Sethi:  [01:06:39] Just before we ended the call, Rebecca took ownership in a powerful way. She asked me about how moving in with the parents might impact their numbers. And the answer was surprising. And it might have solved their financial problem.


Ramit Sethi:  [01:06:54] So how would you simulate living with your in-laws in this conscious spending plan?

Rebecca:  [01:07:02] I don’t know what that means. What do you mean? How would it help?

Ramit Sethi:  [01:07:06] Nope. How would you model this out or how would you plug that decision that you’re going to live with your in-laws for a while into the conscious spending plan?

Rebecca:  [01:07:20] We would just take it out of the fixed spending of rent. Technically right now we’re spending– I don’t know what section this is in, but we’re spending 2,500 over a month. So we took that away.

Ramit Sethi:  [01:07:36] And what would it turn into?

Rebecca:  [01:07:38] Nothing. Whatever, we throw in here and there for them, but they’re not going to make us–

Ramit Sethi:  [01:07:44] Just give me the number. What would it turn into?

Rebecca:  [01:07:46] Zero.

Ramit Sethi:  [01:07:47] Correct. Zero. Joe, do you notice what I’m doing here?

Joe:  [01:07:54] Yeah.

Ramit Sethi:  [01:07:55] What am I doing?

Joe:  [01:07:56] It’s hard to stay quiet.

Ramit Sethi:  [01:07:58] Joe was literally covering his mouth. He was putting his own muzzle on it himself. I loved it.

Rebecca:  [01:08:03] I know, but then it’s also not my rich life. So I don’t know. I mean, I [Inaudible 01:08:08]

Joe:  [01:08:10] I want you to see it for yourself. I don’t want you to be afraid of this spreadsheet.

Ramit Sethi:  [01:08:14] So, Rebecca, you’re doing awesome. Can you be my guess please, and plug in that number into the conscious spending plan and tell me what changes?

Rebecca:  [01:08:27] Well, it gets us out of the–

Ramit Sethi:  [01:08:31] Literally plug it in.

Rebecca:  [01:08:33] Okay. I mean, then I’m going to have to go to my pen because– well, look, we were spending– I don’t know.

Ramit Sethi:  [01:08:44]  Can you take your time? Do you have the spreadsheet open?

Rebecca:  [01:08:47] I just did, but now I lost it.

Ramit Sethi:  [01:08:49] Okay, open it up. Notice, by the way, I think unconsciously, Rebecca, what you’re doing right now is you’re trying to find a way to avoid typing these numbers in so you’re talking. Do you notice that?

Rebecca:  [01:09:01] Yeah. Okay. Wait, am I on the right one current spending plan?

Ramit Sethi:  [01:09:07] Go to conscious spending.

Joe:  [01:09:09] There’s tabs at the bottom right.

Rebecca:  [01:09:10] Yeah. Okay. I got it. So now net monthly income is 5,200. So just subtract 2,200 from that.

Ramit Sethi:  [01:09:26] Look at row 7. What do you see at row 7?

Rebecca:  [01:09:30] Rent, mortgage, right?

Ramit Sethi:  [01:09:34] Now my question for you, Rebecca, is how would you simulate going to live with your in laws in this conscious spending plan?

Rebecca:  [01:09:44] I don’t understand the question. How would that factor in? What would be paid?

Ramit Sethi:  [01:09:50] Yes, how would that factor in?

Rebecca:  [01:09:53] It would take–

Ramit Sethi:  [01:09:54] Not looking for talking. I’m looking for you to make the change on the conscious spending plan. This reminds me of when I went to interview at Microsoft. And when you go to interview at one of these tech companies, you go through an entire day of interviews. Now if they like you, by lunch, they will fill up the rest of your afternoon schedule with even more interviews. So you might end up talking to seven or 10 people. If they don’t like you, they’ll treat you to lunch. And then they’ll say, “Thank you so much. We’d like to take you back to your hotel.” That means you didn’t get the job.

So one time I went up to interview at Microsoft when I was in college, and they really wine and dine you. They treat you very well. And I finally got to the very senior person. He was like a senior VP. And he looked at my resume. And then he turned it over. And he goes, “Resumes are made for writing on.” And he started to ask me all these really technical questions. I totally bombed that interview. I tried to talk my way out of it, just like Rebecca is doing right now, but I couldn’t. He wanted the math and I couldn’t give it to him. That is exactly what Rebecca is doing here.

Rebecca:  [01:10:58] So it would take it to– is that the total on the bottom, the fixed costs total?

Ramit Sethi:  [01:11:06] No. Remember, that’s just adding up all these numbers. Row 17 is just adding up all these numbers. So you change the numbers that are in brown. That’s what you can change. So which number do you want to change if you went to live with your in-laws?

Rebecca:  [01:11:23] Meaning like, where else can we put the money?

Ramit Sethi:  [01:11:25] Nope. What would change on this if you went to live with your in-laws?

Rebecca:  [01:11:29] The rent mortgage.

Ramit Sethi:  [01:11:30] Okay, so change it.

Rebecca:  [01:11:32] So now it’s zero.

Ramit Sethi:  [01:11:34] Yeah, make the change. Tell me what you notice happens.

Rebecca:  [01:11:42] Oh, I’ll edit with the sheets app. Well, I don’t know I don’t want to take up too much.

Ramit Sethi:  [01:11:44] No, no, this is the whole point of our conversation.

Rebecca:  [01:11:49] Okay, so I need to figure out how to edit this.


Ramit Sethi:  [01:11:53] Okay, I’m going to skip a bunch of logistics and moving rooms, the computer didn’t work and the spreadsheet app because I stuck with them. I wanted Rebecca to see how she can take control of the numbers. And she can type these numbers in and start to understand how her money affects their living situation. Here’s what happened.


Ramit Sethi:  [01:12:14] So what do you notice changed?

Rebecca:  [01:12:16] And I think about this because I’m really not good with the numbers. I see the fixed costs 50 to 60% of take-home. So now it’s 53%. 

Ramit Sethi:  [01:12:28] And what percent of your fixed costs are you currently spending?

Rebecca:  [01:12:32] Oh my God, 105, yeah.

Ramit Sethi:  [01:12:34] You’re spending more money every month on just this category than you even make. So watch, change it to zero, watch what happens.

Rebecca:  [01:12:45] Now it’s basically half.

Ramit Sethi:  [01:12:48] What’s the number now?

Rebecca:  [01:12:49] 53%.

Ramit Sethi:  [01:12:51] Yeah, so from 105 to 53, what does that tell you?

Rebecca:  [01:12:59] Part of me wish I hadn’t asked this question because I don’t want to move on with my in-laws as much as I appreciate the offering. But when you look at the numbers, it makes sense.

Ramit Sethi:  [01:13:07] I love it because you’re taking ownership. Anytime you talk about money, I’m leaning in and listening, and it excites me because you’re engaged, you’re grappling with it.

Rebecca:  [01:13:20] I’m getting it, yeah. I’m like 101, but I’m getting it, yeah.

Ramit Sethi:  [01:13:25] I love it. Honestly, my greatest joy is to see someone just seeing the importance of how money affects their life, what they can accomplish, and then I don’t care if they’re beginners or they’re multimillionaire, super advanced, I don’t care. But I love that you’re engaging and asking questions.


Ramit Sethi:  [01:13:45] So many fascinating things in this episode with Rebecca and Joe. First, the idea that if you don’t truly know yourself, it can be very tempting to make decisions you think will make you happy, but actually won’t. For example, Rebecca would send these frantic texts to Joe saying, “We have to move, we have to move.” But in the end, what we discovered is she needs a little more time for herself. And that’s completely understandable. 

But without untangling this web of how come you haven’t looked at the numbers? Why are you nervous about typing into this spreadsheet? Why does Joe step up and try to solve Rebecca’s problems for her, instead of both of them engaging as a team? It’s very convoluted. And sometimes you just need somebody on the outside to help you do it. It could be somebody like me, it could be a therapist, which would make a lot of sense for a more long-term engagement. There’s a lot of different places to go.

But with this podcast, I want to show you and de-stigmatize the idea of asking for help because it would be very difficult for Rebecca and Joe to have come to these realizations on their own. I received follow up letters from both Rebecca and Joe. They are interesting, and they’re lengthy. So I’m going to excerpt some of the salient parts for you. And for the full letters, you can access them at iwt.com/episode57. 

Rebecca wrote, “Thank you so much for this life changing experience. What surprised me about the call was how passive Joe came across in regards to all topics. In my experience, his personality is typically more aggressive and loud. He appeared shockingly understanding, as I revealed a lot of myself that I’ve hidden for years. I’m also shocked at how much we are spending versus what we make and have, most importantly, how scared I have been of Excel for so long, and how powerful it was to input a number.”

Joe wrote, “I was surprised by how committed you were to truly helping my wife. Your persistence and patience was so genuine when frustrating challenges arose. And words cannot express how grateful I am for that. You making her delete and input numbers into the cell was very symbolic to me and a major lesson for myself. I can be very quick to jump in and take care of anything and everything that pops up in our lives and it’s not always helpful. There’s a price we both pay for that. Number one, she doesn’t get the opportunity to learn or grow or step up. Number two, I spied myself and the relationship because little resentments built. This dynamic can get way out of control and quite honestly, I think it has. Thank you for highlighting my role in that dynamic.” To read the full letters and get all the bonuses mentioned in this episode, including the three step guide to buying a house, go to iwt.com/episode 57. 

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