Episode #106: “I’m about to make $300k but we might have to live in our car”

Jack and Christina are 33, both born in Russia. With two young kids, they’re looking ahead to number three and to buying a home. But they have $0 saved and $87,500 in credit card debt that they can only pay minimums on right now. Christina’s income triples soon, can it solve everything?

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Show Transcript

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Jack: [00:00:03] This is the plan. That we want, and we’re going to earn more money. However, my worry is we’re going to spend even more. She’s a spender.

Christina: [00:00:12] But my argument is that our son is never going to be three years old again. I worked 80 hours a week for three years. I have this, I’m stealing from my future self because I have this contract that I signed, and I’m going to start summer that will increase my salary three or four times.

Ramit Sethi: [00:00:34] You know the reputation of doctors with money, right?

Christina: [00:00:37] Doctors don’t know anything about money. I don’t want to be that. No. I think we just went all out. Honestly, I don’t know what happened. We just decided to upgrade our lifestyle. Trips, clothes, furniture. I bought a nice furniture from West Elm. We need to pay deposit. We need to pay first month payment, and we didn’t have any money. No money. And I got scared that, like, where are we going to live? 


Ramit Sethi: [00:01:06] Meet Jack and Christina. They’re both 33 years old. They’re from the same town in Russia, but they met in LA 10 years ago, and they were married in 2020. They earn a lot. Christina, for example, is a doctor. But what you’ll hear today is an interesting combination of their culture, their upbringing, and a lack of financial discipline, which has led them to a very troubling situation. They are in tens of thousands of dollars of debt, and they even admit that if and when they start earning more, it’s not going to change a thing.  

Now, a couple of things I want to point out before we go on. Of course, you can watch this entire episode on YouTube. It’s fascinating to see the body language and the eye contact. There is a little bit in today’s episode about travel, which got me inspired. So on Thursday’s episode, just two days from now, I’m going to share how I plan my travel, how I take my dream vacations.  

And then on Saturday on the podcast newsletter, I’m going to talk a little bit about some peculiar psychological things I’ve noticed about money and travel. So to get that, you can go on iwt.com/podcastnewsletter. I send that out on Saturday. Now, let’s get to the episode. 


Ramit Sethi: [00:02:23] Let’s talk about a specific example in the last month or two where you were not on the same financial page.

Christina: [00:02:30] We rent, so we were notified by the landlord that she wants to sell the place, and we were given a 60-day notice. And now we have to find a new apartment, so they need to run our credit score. When I looked at my credit score six months ago, I was like, oh, holy crap, we need to pay deposit. We need to pay first month payment, and we didn’t have any money. No money.  

 And I got scared that, like, where are we going to live? Nobody will rent us a normal place. And we have two kids. We need to stay in the area because of the school, and etc. That’s when I felt very scared. I really was scared because we needed to pay $7,000 for our townhome deposit and first month and everything, and we didn’t have that.

Ramit Sethi: [00:03:26] Mm-hmm. When did that happen?

Christina: [00:03:28] Two months ago. Honestly–

Ramit Sethi: [00:03:30] Pretty scary.

Christina: [00:03:32] It was really scary. Yeah.

Ramit Sethi: [00:03:34] It’s interesting hearing the two of you living paycheck to paycheck, making $207,000 a year. Do you think that that’s normal?

Christina: [00:03:44] We have never been connected in terms of money. So when you ask, when did you guys disconnect? We’ve never been connected. So we were separated from the get go.

Jack: [00:03:57] We’ve been together for quite a few years. We got married in 2020. Before we got married, we got our first kid, and then we got our second kid. We got married. We never talked together how we’re going to handle finances together from now on. 

Ramit Sethi: [00:04:12] Do you have conversations about having kids?

Jack: [00:04:16] We did.

Ramit Sethi: [00:04:16] Do you have conversations about where you’re going to live and if you’re going to buy a SNOO or some type of diapers?

Jack: [00:04:25] Yes.

Ramit Sethi: [00:04:25] Not money, though.

Jack: [00:04:28] Not money, really. We didn’t know what we’re going to get into in terms of money issues. We thought we were not going to have any issues.

Ramit Sethi: [00:04:40] Hmm. How often do you think about it?

Jack: [00:04:44] Lately, quite often. If one of us brings up a conversation about money, on a daily basis, that would be every day– 

Ramit Sethi: [00:04:54] You fight about it?

Jack: [00:04:55] No. Every time we do have a conversation about money, first of all, it’s rare. Christina says we just need to make more money, and we’ll be fine. 



Ramit Sethi: [00:05:06] Just a quick reminder that 100% of the couples I speak to who have a spending problem always believe that if they just earned more money, their problems would vanish. And of course, this is totally untrue. This is what I call being a believer. Believing that the next raise, or the next deal, or the next lottery ticket is going to change everything. In fact, most believers would rather believe they’re going to win the lottery than take a hard look in the mirror at their own behavior. 


Jack: [00:05:39] This is the plan. That we want, and we’re going to earn more money. However, my worry is we’re going to spend even more. She a spender. If we get a good check or she gets a good check, she can go ahead and spend it on something nice. I have a feeling that we’re going to change our lifestyle, and I don’t want to be in the same situation we’re in right now. So I want to be conscious about what we spend on.

Christina: [00:06:10] And when we got married, maybe we started to plan it more together, but again, because of the differences in our money philosophy, we are not doing a good job.

Ramit Sethi: [00:06:25] This ever come up before you got married? For example, hey, I’ve noticed that you blank, blank, blank, and it makes me feel blank, blank, blank.

Jack: [00:06:37] Coming from her?

Ramit Sethi: [00:06:39] Or you.

Christina: [00:06:43] No. I knew he was worried about money, but I think I didn’t realize how much he worried about money. Up until we were married legally, I did not feel comfortable to ask for money, anything to do with money. Once we were legally married, then I became more comfortable.

Ramit Sethi: [00:07:05] And that was exactly when the debt started.

Christina: [00:07:07] Correct.

Jack: [00:07:08] We got married debt free, as far as I remember.

Ramit Sethi: [00:07:11] Really?

Christina: [00:07:13] Yeah.

Ramit Sethi: [00:07:13] You got married only three years ago.

Christina: [00:07:16] Yeah. So all the debt accumulated within the last three years.

Ramit Sethi: [00:07:19] So what happened in three years?

Christina: [00:07:21] The credit card debt is huge. We don’t have money to pay more than minimum pay, and the minimum pay equals the APR.

Ramit Sethi: [00:07:30] Yeah.

Christina: [00:07:30] So we at the, don’t move anywhere.

Ramit Sethi: [00:07:34] That got you worried.

Christina: [00:07:35] Yeah.

Jack: [00:07:36] Yeah. I can go back to– was it last year? The plan was, let’s plan a trip to Hawaii. When you look at the flights and bookings, everything, you see the number, let’s say, $5,000 for the whole trip with the family, and I know we don’t have immediately that number. The only way to pay for it is credit card. So my argument is, hey, maybe we should skip the trip this year. Let’s just save up. Let’s get rid of some debt. Let’s plan it ahead of time next time when we do have cash. 


Christina’s argument is, hey, I’m going to be on vacation. What else I’m supposed to do on vacation? I want to go somewhere. I’m tired because I’m always working. I want a vacation, and let’s pay for it. So we went on that trip. Trip was amazing. Great experience. Pictures. Everybody had fun. Awesome trip. Came back happy. But that dark spot in our wallet is still there because it left a scar, which is more credit card debt.

Ramit Sethi: [00:08:52] What do you mean it left a scar? It was a $5,000 trip, you put on your credit card, and then what happened?

Jack: [00:08:59] And that trip never got paid for.

Ramit Sethi: [00:09:06] Still?

Jack: [00:09:10] I don’t think it has been.

Christina: [00:09:13] We’re actually planning a trip in July, this coming July.

Ramit Sethi: [00:09:19] What? What trip?

Christina: [00:09:21] We want to go to Singapore.

Ramit Sethi: [00:09:23] What the fuck? Did you already book stuff?

Christina: [00:09:25] Not yet.

Ramit Sethi: [00:09:27] How much is this Singapore trip going to cost?

Christina: [00:09:29] The flight only is $10,000.

Ramit Sethi: [00:09:31] Oh, that’s nice. And how much for all the other stuff too?

Christina: [00:09:35] Yeah. So you can imagine it would be at least five grand more.

Ramit Sethi: [00:09:40] Uh-huh. Yeah. At least. Let’s say 25,000 total. Would that be fair? You factored all in, taxes, all that stuff. Don’t you think, 25,000?

Christina: [00:09:50] Okay.

Ramit Sethi: [00:09:51] So where’s that going to– oh, you’re going on that because by that point, you’ll be making a lot more money.

Christina: [00:09:55] No. Actually, it starts right after. But again, this pressure, it’s like pressure of myself on me, pressure of the society.

Ramit Sethi: [00:10:04] Which society is pressuring you to go to Singapore?

Christina: [00:10:07] Not to go to Singapore, but like, oh, I’m a doctor, so I can afford. My friends, the friends that we plan to go with to Singapore. Everything.

Ramit Sethi: [00:10:18] Should we get them on this Zoom call right now?

Jack: [00:10:20] They don’t know. Yeah. The thing is they don’t even know.

Christina: [00:10:23] Yeah.

Ramit Sethi: [00:10:23] They don’t know you have debt, right?

Christina: [00:10:25] Yeah.

Ramit Sethi: [00:10:25] If they knew you had debt, I’m not asking you to tell them, but if they knew. What do you think they would say about you taking a $25,000 trip to Singapore?

Christina: [00:10:34] Oh, yeah. They would say we’re crazy.

Ramit Sethi: [00:10:37] Do you think you’re crazy?

Christina: [00:10:40] When I think about that that way, yeah.

Ramit Sethi: [00:10:43] Would you be open to canceling or delaying the trip?

Christina: [00:10:47] Sure. Yeah. And I probably won’t have another opportunity to go until later. But my argument is that our son is never going to be three years old again, and I want to give them the best I can. I want to give them this experience. And again, as he said, I worked 80 hours a week for three years, so now when I’m having like more free time, I really feel guilty that I didn’t spend that time with my kids.  

And I have this, I’m stealing from my future self because I have this contract that I signed, and I’m going to start summer that will increase my salary three or four times. So I’m thinking, oh, that’s not a big deal. And then I pay my $100,000 credit card debt, but I know that’s not the right thing to do.

Ramit Sethi: [00:11:44] So what’s the problem?

Christina: [00:11:46] Because I’m stealing from my future self.

Ramit Sethi: [00:11:50] You care? And does it really matter to you if you’re going to triple your income?

Christina: [00:11:55] It does because, again, I won’t be able to use the money because I’ll have to pay off my credit cards. And then I think I won’t be able to save for the house or for whatever it is, vacation. And I’m afraid that it’s going to be the same. And it actually might get worse. I might have even more debt if I don’t stop.

Ramit Sethi: [00:12:22] Well, you’ll definitely have more debt. I mean, what are you paying 26, 28% on your credit card?

Jack: [00:12:28] Yeah.

Jack: [00:12:28] Using the magic wand right now where we’re debt free, same income, we’re going to go back to debt with current lifestyle. That’s the truth.

Christina: [00:12:38] That’s consideration of higher income. Actually, it’s what caused all this debt, to be honest.

Jack: [00:12:43] Yeah.

Christina: [00:12:44] Yeah.

Ramit Sethi: [00:12:44] Keep going.

Christina: [00:12:45] And we should stop considering that until we have it.

Ramit Sethi: [00:12:49] Oh, shit. Okay, talk it out. I want to hear you– tell me. What do you mean by that?

Christina: [00:12:53] So first it started with Jack’s job giving him a higher salary, and then all of a sudden, the business went down but the lifestyle did not. And then now I’m approaching the end of my training. It’s actually two months pretty much. And so I’m just all out spending whatever credit cards I’ve got.

Ramit Sethi: [00:13:15] Have you actually thought about what you’re going to do with the new income?

Christina: [00:13:18] Yeah. So that actually makes me very anxious.

Ramit Sethi: [00:13:22] Oh. Why is that?

Christina: [00:13:23] I don’t know. So that’s why I’ve started to look into all this retirement plans.

Ramit Sethi: [00:13:30] Mm-hmm.

Christina: [00:13:31] First of all, I’m scared of the taxes I have to pay. And second of all, I– again, yeah, I don’t know what to do. Besides paying off my debt, I don’t know how to save. I don’t know how to use money. That’s the problem.

Ramit Sethi: [00:13:47] Great. Very honest answer. Okay. I could work with that. Jack, what’s your take? When her income goes up, have you thought about what the two of you should do?

Jack: [00:13:58] Yeah. That was my primary concern. That’s why I applied. Because it’s coming. It’s just around the corner. And it seems to me that, hey, now the income is more, let’s go on this vacation. But–

Ramit Sethi: [00:14:16] Look at Christina smiling right now. She’s like, mm-hmm. That sounds pretty good to me. Christina, am I reading that right?

Christina: [00:14:21] Yeah. 


Ramit Sethi: [00:14:22] Notice the clues. They never really talked about money when they got married. Then they had two kids and realized they were in financial trouble. They were almost homeless. And now their backs are against the wall with tens of thousands of dollars of credit card debt. Now, Christina has lots of very logical reasons for her spending. For example, her son is only going to be three once, but the fact is they’re in debt and they are trapped. She admits that with more money, their situation wouldn’t really change. Now let’s talk about her salary. To set the stage, she currently earns $136,800 per year, and she’s expecting that number to go up.   


Ramit Sethi: [00:15:06] What kind of doctor are you going to be?

Christina: [00:15:09] I’m going to be an oncologist.

Ramit Sethi: [00:15:10] Oncologist. All right. What are you going to make?

Christina: [00:15:12] About 300,000 a year.

Ramit Sethi: [00:15:14] So when you were doing your residency and then your specialty, there’s the moment where you really start to get it. You can see all the concepts coming together. You can see how things link together. It starts to make– you understand why you did hum bio way back there. Would you say you have made those connections with money or do you still feel like it’s a bit murky or dark for you?

Christina: [00:15:42] It’s a bit dark still.

Jack: [00:15:44] I just realized something. One of the reasons we got into debt and we allowed ourselves our current lifestyle is, first of all, we knew about Christina’s path. It’s pretty straightforward. Hey, I’m in training now. I’m going to triple, quadruple my income later. So I will have the opportunity to pay off if we get in debt, which we did. And the thing with me, we were talking like, hey, Jack, what do you want to do with your life? You want to earn more? You good where you’re at? And I said, I want to earn more too.

Christina: [00:16:26] So he had a jump in his salary during COVID. And when he started to have this six-figure salary, he shared with me that he never thought he would have that much money, although it was not a lot. But for him, it was like, oh, I would never even think that I deserve that. I think that–

Ramit Sethi: [00:16:46] Hold on just a second. Just to clarify, six figures is not a lot to you.

Christina: [00:16:51] I mean, he was low six figures. That’s what I mean.

Ramit Sethi: [00:16:55] Low is what?

Christina: [00:16:56] A 100,000.

Ramit Sethi: [00:16:57] Okay. So what is a lot to you?

Christina: [00:17:00] Okay. That’s a good question. Maybe half a million dollars could be a lot.

Ramit Sethi: [00:17:05] Okay. Did you expect to be the higher earner when the two of you met?

Christina: [00:17:10] Not necessarily, no.

Ramit Sethi: [00:17:12] Okay. And is it common in Russian culture for a woman to be the higher earner?

Christina: [00:17:19] Probably not.

Ramit Sethi: [00:17:20] Is that an issue for the two of you, or no?

Christina: [00:17:24] No. I don’t think that’s an issue for me.

Ramit Sethi: [00:17:28] Jack?

Jack: [00:17:31] On the surface, I don’t think it’s an issue. Just growing up, in our culture, men would be always the breadwinner. At least in my family, that’s how it went. I’ve had conversations with my dad when we talked about my current income, my future income. And he did mention that, hey, you’re supposed to earn more no matter what because you’re the man. You’re supposed to provide for your family. This is the thinking I grew up with.

Ramit Sethi: [00:18:05] How did you receive that when he told you that?

Jack: [00:18:12] I don’t fight my dad. Whatever I feel, I just tell him, but I don’t fight about it because I know he’s not going to change his views.

Ramit Sethi: [00:18:25] How would you describe the way you grew up when it came to money, Christina?

Christina: [00:18:30] And remember my dad, he is a physician, and he had to take extra night calls. And then he also was a taxi driver to earn a little more income. Up until I was eight, we were struggling. So I was born in USSR, so there was not much money overall in the society. When I was eight, he opened up a clinic that grew substantially. So now he has a chain of clinics. So he did a really great job. So I didn’t have any needs, financially, when I was growing up. We didn’t need anything. He paid for my medical school. I didn’t have medical school debt, which is huge. But then I got myself into worse debt.

Ramit Sethi: [00:19:35] And what about your mom?

Christina: [00:19:38] So my mom is a spender like me. She never really worked. I don’t think she has a real understanding what money is. And I think for her, it’s really easy to spend. So she is a spender in our family. Still is.

Ramit Sethi: [00:19:58] Would you say that you have an understanding of money?

Christina: [00:20:01] I don’t think so, but at least I am curious about it now, and I want to learn. So I think that’s a first step. 


Ramit Sethi: [00:20:17] First of all, you guys really have to stop using low six figures and mid six figures. None of you know what you’re talking about, and you always use it incorrectly. Have you ever noticed people totally use these phrases and they always twist it to their advantage? You have some 23-year old banker living in Murray Hill. He’s out. He’s trying to hit on people. He goes, yeah, I make mid six figures. He makes $149,000 a year. And then you have some wealthy person. You ask him, are you wealthy? They go, me? Little old me? I’m no Jeff Bezos. I only make six figures. I’m working class. Turns out they make $979,000 a year. Please stop it with this six-figure mid, low bullshit.  

Let’s get honest with each other. Okay. Now to Christina and her background. They started struggling, in her words, in the former USSR and climbed the social ladder to where she “didn’t have any needs”. Her dad paid for med school for her. Christina’s mom is a spender like her. Did you hear that? And interestingly, she said that her mom doesn’t really understand money, never did. But when I ask if she does, Christina says, “I don’t think so, but at least I’m curious about it.” Lots of clues here that are getting me thinking. What do you notice? 


Ramit Sethi: [00:21:33] Seems like you’re comfortable, if I’m reading it correctly, that Christina earns more than you. Would that be fair to say?

Jack: [00:21:44] Well, yes and no.

Ramit Sethi: [00:21:46] Tell me.

Jack: [00:21:50] So currently– because we go up and down at least in my incomes. I was the higher earner, then I dropped down to being not the high earner. I don’t even know how I feel. I feel fine. I don’t even think about how I feel about that right now because I think about how we handle our debt situation.

Ramit Sethi: [00:22:25] So would you say that the two of you are on the same page right now?

Jack: [00:22:30] I think we’re getting there slowly.

Ramit Sethi: [00:22:34] Really? Why did you fill out the application then? It doesn’t look like it from the application. Should I read it?

Jack: [00:22:44] You can read it.

Ramit Sethi: [00:22:45] Have you read it, Christina?

Christina: [00:22:47] No.

Jack: [00:22:47] Oh, no. She didn’t. Because I wrote it twice. And, well, I guess the second one got picked.

Christina: [00:22:58] No, I have no idea.

Ramit Sethi: [00:23:00] Okay, let’s just take a look here, shall we? What is the biggest challenge you are facing when it comes to love and money in your relationship? Answer: lack of responsibility for our money, living a lifestyle we can’t afford. Is there one main issue you’d like help with from Ramit? Answer: we earn good salaries, yet we have debt that keeps piling up. However, given our spending ambitions, we are very likely to keep living paycheck to paycheck. 

We’d like to both understand that no matter our income, we must still be conscious of our spending and money relationship. That answer is where I knew both of you did not fill this out. One of you filled it out in code for the other one to be able to do that. Jack, am I telling the truth here?

Jack: [00:23:47] Yes.

Ramit Sethi: [00:23:48] Yes. Christina?

Christina: [00:23:51] Okay. I agree with all of that in theory.

Ramit Sethi: [00:23:53] Oh, in theory. Oh, please tell me.

Christina: [00:23:57] But no, I totally agree with the problem.

Ramit Sethi: [00:24:03] What is the problem in a sentence or two?

Christina: [00:24:06] Our expenses. The lifestyle is way beyond what we earn. 


Ramit Sethi: [00:24:16] This is becoming more and more common on this podcast. One partner submits the application, the other has no idea. That first partner who submitted the application is worried. They’re concerned. The other one, not a care in the world. Everything’s fine. It’ll all work out in the end. This is mind blowing to me because they go through application, a screening interview. They get detailed instructions. There are so many opportunities for them to talk about things.  


How can a couple end up talking to me finally after this entire process and they never even shared the application with each other. Whatever. People are weird. This is why I love my job. Let’s take a look at some of their numbers. Their assets are $11,000 in a Jeep Grand Cherokee. Their investments are $54,400. Savings are zero, and their debt is $87,475, all of which is credit card debt.  


Ramit Sethi: [00:25:17] What credit cards, by the way? What do you have?

Jack: [00:25:20] Chase.

Ramit Sethi: [00:25:23] Uh-huh.

Jack: [00:25:23] I got three of them. And we have Best Buy. We buy some stuff on it.

Ramit Sethi: [00:25:29] Hold on, hold on. Was this like you were in line at Best Buy and you’re like–

Jack: [00:25:35] No.

Ramit Sethi: [00:25:35] I know. I’m going to save 10% on my 30-dollar purchase? How did you get a Best Buy card?

Jack: [00:25:40] The thing is, we’ve been moving from place to place at least once a year. This is where the card came from, because, oh, zero APR. We can get a fridge. Let’s look at it online. We don’t have money to pay for a fridge right now, but let’s get the zero APR or whatever.

Ramit Sethi: [00:26:01] Did it work, the 0% APR?

Jack: [00:26:04] We got a fridge. The zero APR didn’t work.

Ramit Sethi: [00:26:08] It didn’t? I’m so shocked. Don’t even tell me. Let me guess. Twelve months, 0%. And then you got to 12 months or 12 months and two days, and you missed a payment or you didn’t realize it was due on this day, and they backdated all the interest, and now you had to pay it all. Did I get that right?

Jack: [00:26:29] Not quite right.

Christina: [00:26:30] You just kept using the card. That’s the problem.

Ramit Sethi: [00:26:33] Oh.

Jack: [00:26:34] Yeah. For something else.

Ramit Sethi: [00:26:34] So you did get 0% APR for a year.

Jack: [00:26:38] For a while, yeah.

Ramit Sethi: [00:26:39] And then you just kept using it.

Jack: [00:26:41] Over it. Yeah.

Christina: [00:26:41] Yeah. So it was not just the cost of the fridge.

Ramit Sethi: [00:26:46] And how much debt is on that Best Buy card now?

Christina: [00:26:48] I think it’s maxed out probably.

Jack: [00:26:50] Best Buy is fine. Hold on. I think I have it.

Ramit Sethi: [00:26:55] Jack wants to set the record straight. Hey, Ramit, don’t rag on my Jeep and my Best Buy card. Go ahead. Tell me, Jack.

Jack: [00:27:01] Best Buy, I have 2,500.

Christina: [00:27:03] Oh, okay. Not bad.

Jack: [00:27:04] Yeah, but the Home Depot one, it was funded.

Christina: [00:27:11] Don’t ask why we have Home Depot. So it was the same. No. Home Depot, I paid it off. So that one worked.

Jack: [00:27:18] There you go.

Ramit Sethi: [00:27:18] What else do you have? Best Buy, Home Depot. What else?

Christina: [00:27:22] I have Capital One, Citibank. I have two Chase credit cards. Yeah, I have seven.

Ramit Sethi: [00:27:28] Why?

Christina: [00:27:29] I don’t know.

Ramit Sethi: [00:27:30] No. You know why? Tell me why.

Christina: [00:27:32] Again, it’s the same story. So we went to Hawaii on vacation with a 0% APR for 12 months but we never paid it off. And then Jack went to Florida to visit his friend. That’s why we got an Alaska card. So we got miles.

Ramit Sethi: [00:27:53] How much is on that Alaska card now? Please tell me zero.

Christina: [00:27:57] No. It’s actually $12,500, and it’s pretty much maxed out. So I think the credit limit is 14,000.

Ramit Sethi: [00:28:05] Yeah. So you’re paying almost as much in debt payments as you are for rent. And this is, what, the minimum?

Christina: [00:28:18] This is only the minimum, literally.

Ramit Sethi: [00:28:21] Wow. You know with the minimum you’re basically going to be paying this for 25 plus years.

Christina: [00:28:25] Yeah. That’s what they sent me. Yeah. Thirty years. Recently, I forgot, and I got the fine and another fee of 60 bucks. And I was always like, oh, I should call them. And I never did call because I think I feel embarrassed. That’s the reason I didn’t call you.

Ramit Sethi: [00:28:43] You feel embarrassed to call Bank of America, but you’re on this podcast.

Christina: [00:28:47] I know. 


Ramit Sethi: [00:28:48] You know how you hear stories about people opening up credit card after credit card, jumping from 0% gimmick to another gimmick, and you go, ha ha ha, that’s so crazy? There’s no way that’s true, it’s just something people talk about. Nope. Here we have a chance to meet people who actually do exactly that. 

I have a real problem with people who write me asking if they should open up the 0% balance transfer thing that they can get for 12 months because, why do they have to pay interest? It turns out that people who ask those questions are almost always looking for a gimmick, a hack, a shortcut to avoid doing the one thing they need to do.  


If you have credit card debt, the single thing you need to do is to set up an automatic payment plan so that you are paying off your credit card every single month. And if you set that up, that means you will naturally be controlling your expenses. But most people don’t want to do that. They want to jump on any particular gimmick they can find instead of the single thing that actually works.  

Stop it with these gimmicks. Spending $50,000 so you can make $0.10 in free Marriott points. Jumping around from one 0% balance transfer to another, promising yourself that you will magically change in the future when you’re not even willing to change today. Get real. Take control of your money and do it the real way. That is the only way to start living a rich life. 


Ramit Sethi: [00:30:10] Jack. Your total net worth is how much?

Jack: [00:30:15] We’re -22,000.

Ramit Sethi: [00:30:17] How do you feel about that number?

Jack: [00:30:20] I feel like that’s not good. I feel like that needs to change in the opposite direction.

Ramit Sethi: [00:30:29] Christina, how do you feel about that number?

Christina: [00:30:30] I was actually pretty happy when we filled it out because I thought we were going to be a 100,000 in credit card debt. But then I forgot about my retirement account. So that’s what–

Ramit Sethi: [00:30:43] Is it that you are surrounded with other physicians who have tons of debt so it’s normalized to you?

Christina: [00:30:51] Kind of. Yes. I guess that’s delayed gratification. And knowing that I will have money in the future. Many of my physician friends do that. Yeah. 

Ramit Sethi: [00:31:05] You know the reputation of doctors with money, right?

Christina: [00:31:08] Kind of. I mean, I can guess what.

Ramit Sethi: [00:31:10] What is your guess?

Christina: [00:31:11] That doctors don’t know anything about money.

Ramit Sethi: [00:31:14] You care?

Christina: [00:31:17]  I do. I don’t want to be that.

Ramit Sethi: [00:31:19] All right, let’s move on. Let’s take a look at the income. I’m so interested in this line. Christina, can you read this to me?

Christina: [00:31:24] The gross monthly income for me is 11,406.

Ramit Sethi: [00:31:27] And what about for both of you?

Christina: [00:31:30] For both of us is $17,268.

Ramit Sethi: [00:31:35] What do you think about that number?

Christina: [00:31:37] It’s a lot.

Ramit Sethi: [00:31:38] Yeah. Did you know that?

Christina: [00:31:40] Actually, when we put the numbers, again, I was surprised. And I don’t know where it goes.

Ramit Sethi: [00:31:46] You don’t know where it goes?

Christina: [00:31:47] I mean, credit card debt.

Ramit Sethi: [00:31:48] Well, we’re about to find out. But if we annualize that number, that’s $207,000. That’s a pretty good income, wouldn’t you say?

Christina: [00:31:57] Yeah.

Ramit Sethi: [00:31:58] Fantastic. Any comments? Wait, wait. Didn’t you say that $100,000 is not that much. So is $200,000 a lot, or no?

Christina: [00:32:11] It is. I mean, it’s definitely enough, especially if we didn’t have debt.

Ramit Sethi: [00:32:17] How much were you making when you got married?

Christina: [00:32:20] Probably around the same. So if you– yeah, it was around the same because Jack was earning more, but I was earning less.

Ramit Sethi: [00:32:28] Was it enough for you then?

Christina: [00:32:32] No. I think we just went all out. Honestly, I don’t know what happened. We just decided to upgrade our lifestyle. Trips, clothes, furniture. I bought a nice furniture from West Elm.

Ramit Sethi: [00:32:47] So it’s interesting that you said just a minute ago 200k, 207k is good if we didn’t have debt, but you used to make the same amount with no debt, and it wasn’t enough for you. What’s your takeaway from that?

Christina: [00:33:08] I mean, we definitely increased our spending.

Ramit Sethi: [00:33:14] Do you ever want to go down in how much you spend?

Christina: [00:33:18] No. I don’t want to.

Ramit Sethi: [00:33:20] Yeah, I suspected that. And why is that?

Christina: [00:33:24] Because I want to go up.

Ramit Sethi: [00:33:27] Why? 

Christina: [00:33:39] I always believe in growth and going up, not going down.

Ramit Sethi: [00:33:46] Means?

Christina: [00:33:47] Means anything. So lifestyle wise, money wise, the earning potential.

Ramit Sethi: [00:33:56] The word up to you means what?

Christina: [00:34:07] It means I don’t worry about my finances, and it means that I don’t work for the money.

Ramit Sethi: [00:34:13] We have a bit of a conundrum, though, because you told me 200k is enough money for our family if we don’t have debt, but then we realized you used to make 200k, you had no debt. It wasn’t enough. And now you’ve told me you don’t want to go down in spending. So we’ve boxed ourselves in. What do you think the solution is here?

Christina: [00:34:40] I mean, I think the solution is we’ll definitely have to go down in spending to pay off that debt and then be more careful in the future. And use cash. So that’s–

Ramit Sethi: [00:34:57] Do you think that that’s possible for you?

Christina: [00:34:59] I think so, yeah.

Ramit Sethi: [00:35:00] You seem very achievement-oriented. Seems like you’ve been like that for most of your life. Would that be fair to say?

Christina: [00:35:07] Yeah.

Ramit Sethi: [00:35:07] So if you have been doing this for your whole life and suddenly you’re asked to do this, do you think it’s possible for you to do it?

Christina: [00:35:19] I think I can.

Ramit Sethi: [00:35:22] Why?

Christina: [00:35:27] I mean, I do have experience with delayed gratification through medical school and through my training.

Ramit Sethi: [00:35:35] Totally.

Christina: [00:35:36] So I think I can handle for another year.

Ramit Sethi: [00:35:40] Another year.

Christina: [00:35:41] Yeah.

Ramit Sethi: [00:35:41] What if it was two years?

Christina: [00:35:44] I mean, two years also should be okay. 


Ramit Sethi: [00:35:46] What Cristina said resonates a lot with me. This idea of wanting to go up in life. And I’m going to give you an example from my own life. I’ll use hotels because I love hotels. I want to go up in life when it comes to hotels. If I go to the same hotel, I want to stay in the same room or nicer. I don’t want to go to a less nice room. Now, that might resonate with you, or if you don’t like hotels, think about the food you buy. Think about your kid’s activities. Think about the clothes you wear. Whatever it is that’s important to you. Most of us have at least one area of life where we want to go up. We don’t want to go down. So I get it, Christina.  

In order to do that, in order to have a constant upward trend, you need to keep an eye on two things. Number one, your income, and number two, your expenses. Now, Christina’s income is going to go up. That’s fantastic. But she has not kept an eye on her expenses. They are going neck and neck with her income. In fact, they’re actually exceeding how much she makes. And so it’s very predictable that when her income goes up, her expenses will go just as high.  

Now, again, it’s very, very difficult to cut your spending on things that you’ve become accustomed to, especially if they’re important to you. In fact, for a lot of people, it’s psychologically devastating to have to downsize your house or pull your kids out of certain activities. If you have to, do it. But the ideal situation is to monitor your income and expenses so you never have to make that decision in the first place. 


Ramit Sethi: [00:37:20] What situation are you co-creating? Because then and only then can we start to change it. Otherwise, we’re just talking at the superficial plan level. 

So what is going on?

Christina: [00:37:33] I have this emotional– I’m getting emotional after I spend a lot of time working. And then I have this vacation. When you’re in medical training, you do not get to choose your vacation. They just tell you, oh, your vacation is July 15th to July 30th. That’s it. And in order to relax or do something, I just have to like, oh, we’ll go to Hawaii, or whatever.

Ramit Sethi: [00:38:03] Yeah. So it’s like you have this compressed period of time where you’re off work. You don’t even know when it’s going to be. And when you’re at work, you’re working crazy hours, so you’re just like, ah, this is my 15 days, and we’re going to use it to the max.

Christina: [00:38:19] Correct.

Ramit Sethi: [00:38:19] And so therefore, you go, I don’t really care what it costs. Let’s just go, and we’ll deal with all that stuff later, right?

Christina: [00:38:28] That’s correct. That’s exactly correct. And sometimes Jack would say, oh, maybe we should not. He’s being very nice, and he like, maybe we should think about that. Maybe we should save for the next vacation. We went to Las Vegas in October for my birthday, and it was all credit card again. And I know you didn’t want to go, but you just went because I was pressuring.

Ramit Sethi: [00:38:56] How does that work, Jack?

Jack: [00:39:00] It’s very tight. It didn’t really work.

Ramit Sethi: [00:39:03] Yeah. And considering you’ve tried that, what, 25 times? Has it ever worked?

Christina: [00:39:08] No, because something else comes up.

Jack: [00:39:10] She’s very convincing.

Ramit Sethi: [00:39:11] Neither of you really took it seriously either. Because dynamics win, not a plan.

Jack: [00:39:17] I’m trying to think of other areas of our life that I think we excelled at. We eat healthy foods. We work out every day.

Ramit Sethi: [00:39:31] You work out every day?

Jack: [00:39:32] We wake up at 5:00 AM, and we go work out first thing.

Ramit Sethi: [00:39:36] You know what I want to do? The way you to treat fitness. Calm, cool, methodical. You have a training plan. You show up every day. You have a goal. And do you have people in your life who go, how are you so motivated? How do you go to the gym every day? You ever have people who say that to you?

Jack: [00:39:55] Yeah. All the time.

Christina: [00:39:55] All the time. Yeah.

Ramit Sethi: [00:39:56] And what’s your response to them?

Christina: [00:40:00] You have to do that. People always ask me, how do you deal with the kids and working out? And you just basically choose to do that.

Ramit Sethi: [00:40:10] Wow.

Christina: [00:40:11] You don’t have another choice.

Ramit Sethi: [00:40:12] That’s so interesting. And Jack, what about you?

Jack: [00:40:15] I’d say the same thing. Plus, I’ll just add my little philosophy when it comes to training, eating healthy. To me, it’s to have more energy for my family and kids because it takes energy.

Ramit Sethi: [00:40:29] So you developed a philosophy around your training. I love that. Either of you seeing any connections to the way that you handle or don’t handle money?

Jack: [00:40:39] Yeah.

Ramit Sethi: [00:40:40] What do you see?

Jack: [00:40:42] Disconnect in money philosophy and lack of our own money philosophy together.

Ramit Sethi: [00:40:51] Beautiful. Christina?

Christina: [00:40:53] Yeah, I agree. So we don’t have any plan. We do have this workout plans, but we don’t have any plans regarding our money.

Ramit Sethi: [00:41:03] Yeah, exactly. In fact, I would be willing to bet the two of you are so advanced. When people ask, how do you make time to work out, or how do you motivate– in your head, you’re like, what? I don’t motivate myself. It’s just we go every day. It’s a habit. It’s important to us, so we do it.

Christina: [00:41:20] Actually, that’s what I say. I say discipline. It’s not motivation. It’s discipline. Yeah.

Ramit Sethi: [00:41:27] So. Right now, there is no consequences. But there’s also no consequences in fitness if you don’t train for a week, a month, even a year. Okay. Whatever. So you found meaning in coming up with a training plan, and going, etc. You found meaning there. I don’t think you’ve found meaning with your spending. Would you agree with that?

Christina: [00:41:53] Yes.

Ramit Sethi: [00:41:55] Jack?

Jack: [00:41:57] Yeah.

Ramit Sethi: [00:42:00] And so I hope you can see there’s so many strands here. We could pull them forever. Because you could just as easily say that in the morning. In the morning, I’m tired. I don’t want to work out. But you’ve created meaning, and a plan, and a set of behaviors. And when it comes to money, it’s totally absent. And especially when you combine all those absences with a really hectic work schedule, of course you’re just going to spend money to feel good. So looking at your conscious spending plan, what do you think is– well, what’s your goal? What do you want to accomplish here?

Christina: [00:42:39] Pay off the credit card.

Ramit Sethi: [00:42:40] What do you think is a good plan to do that?

Christina: [00:42:43] Limit as much as possible other expenses and use that free money to pay off the credit card.

Ramit Sethi: [00:42:51] So what would be an example?

Christina: [00:42:54] So our son will start public school in summer, so we can use that $1,000 to pay. My work also will start giving me housing allowance in summer, 1,600 a month.

Ramit Sethi: [00:43:09] Oh my gosh.

Christina: [00:43:09] So we can use that to pay.

Ramit Sethi: [00:43:14] Let me make some notes here. So you’re going to get a 1,000 a month for housing.

Christina: [00:43:19] 1,600.

Ramit Sethi: [00:43:20] 1,600. Wow. Great. Okay. And how much are you going to be able to spend from your $1,345 towards debt? That’s your daycare and after school.

Christina: [00:43:34] Maybe 900.

Ramit Sethi: [00:43:39] Can we be conservative? Maybe 800.

Christina: [00:43:42] Sure. 800.

Ramit Sethi: [00:43:43] I don’t want to have any bad surprises. So that’s 2,400 a month more towards your credit card. That’s amazing, don’t you think?

Jack: [00:43:53] I read somewhere that you can spend extravagantly on the things you love.

Ramit Sethi: [00:43:59] Oh, my God.

Jack: [00:44:00] Right?

Ramit Sethi: [00:44:00] This is like music to my ears. Keep going.

Jack: [00:44:03] Yeah. And you cut mercilessly on the things you don’t care about.

Ramit Sethi: [00:44:08] This is the greatest podcast conversation of all time. Okay. And so all that sounds really good. Where do you go wrong?

Jack: [00:44:17] That’s what you would do. You asked what you would do. That’s exactly what I want to do.

Ramit Sethi: [00:44:23] Oh. So you want to do it. I want to do it. So who’s missing from this equation?

Jack: [00:44:31] I’d like to hear we want to do it.

Ramit Sethi: [00:44:34] Why don’t you say that? Tell her.

Christina: [00:44:37] Yeah. I mean, I want to do that. I agree. 


Ramit Sethi: [00:44:41] Sometimes the best thing I can do is to help people make a connection between money and something that they are already good at. What is it for you? Could be cooking, fitness, organizing your house. Whatever it may be, think of all the work that you’ve put into getting good at that. Think of all the subtle behavioral tweaks that you make on a daily basis that keeps you on top of it. That’s the same with money. A lot of us think that money is some mystical thing. You’re either blessed and good at it or you’re not. No.  

What I like to do is make that connection and show you just the same way you practice cooking for thousands of hours is the same way you can get good at money. You can take control of your money. You can use it to live a rich life. Now, if you listen to this podcast, this gives you an insight into how other people are doing it. If you want more specific help, get my book. It’s in every library or any bookstore. And if you want to ask me questions and surround yourself with other people, get more hands-on help, go to iwt.com/moneycoaching. I do a live Q&A every single month.  


Ramit Sethi: [00:45:49] Now you’re starting to really get into what the core cause of this is. For so long, you have been subsidized or been made consequence-free. Think about it. You were very fortunate that your dad paid for medical school. Amazing. That’s awesome. You were doing okay on your own. You got into a little bit of debt. Paid it off. Fine. Three years ago, what happened? The two of you combined your finances. Suddenly, it appeared that you had a lot of money.  

So because of this compressed work schedule, small vacation, you were like, let’s go– what’s the phrase you two use? It starts with an A. All out. Let’s go all out. Dinner, fuck it. Trips, book it. And the debt starts accumulating, and you still kept going. 10,000, 20,000. 50,000. $87,000 of debt. Honestly, what’s the problem? Jack’s a little uncomfortable sometimes. Jack writes this application. Big deal. But then you almost got kicked out of your housing. And what was the one thing that saved you from getting kicked out of that housing? What was it?

Christina: [00:47:03] My dad.

Ramit Sethi: [00:47:03] Yeah. Another check. Another subsidy. So I don’t mind that you have a dad who’s really generous, and he’s able to– I don’t mind that. What I would like is for you to create your own subsidy. I would like for you two to create your own emergency fund. I would like for you two to create your own plan fund for Singapore trip before you go. And most of all, the way to do that is to create your own vision. That is the most important part.  

A vision would be something like, we never take a vacation unless we can pay for it in full. A policy would be, we are going to accelerate our debt by cutting back on X, Y, and Z and pay it off automatically every single month. Another philosophy would be, we’re going to celebrate along the way, but we’re going to do it more modestly because we want to live an even richer life in the future. How did those things strike you?

Christina: [00:48:14] I like that. I completely agree.

Ramit Sethi: [00:48:18] Let’s just look at this right now. So I have here your debt payoff plan. Now, is it actually true that you’re paying $3,841 a month towards your credit cards?

Christina: [00:48:31] So it’s going to go down because, again, it’s a payment plan, so it’s going to go down. But hopefully, it will not go down because– oh. I  mean, I will remain it at that amount just to pay it faster. It will go down. But the last six months, they were like this, $3,000.

Ramit Sethi: [00:48:50] 3,841, right?

Christina: [00:48:53] About that.

Ramit Sethi: [00:48:54] Okay. All right. That’s quite aggressive. Great. And with your income, you can afford it. Okay. Right now, you’re going to pay it off by January 2026. If you take it up to the number that you discussed, which is with your childcare and the housing allowance, I want to show you from January 2026, which is about three years, you can actually pay it off by October 2024. One year. What do you think about that?

Christina: [00:49:32] It’s pretty fast. I would like to do that.

Ramit Sethi: [00:49:36] It’s amazing. Jack, what do you think?

Jack: [00:49:39] Yeah, I think it’s more than possible.

Ramit Sethi: [00:49:43] Okay. All right. I think that part is really good. So what that shows you is, yes, you have a lot of credit card debt, but you also have a high income, and you have money starting to become more available from other places. That’s fantastic. It’s very possible. You’re going to make, what, 300 plus– $370,000, or something like that? It’s extremely possible for you two to live check to check on that. It is extremely possible. I’ve met people on this podcast who do that. What a tragedy if that’s the way you live your life. 

At $370,000 a year, you could be multi, multi, multi millionaires easy. I’ll tell you, truthfully, I want to pay this debt off fast. First, just for a sense of pride, but really because I’m like, we’re young and we have an awesome life ahead of us. We have two kids. We love to travel. We love to have a good time. And so we’ve created this thing that’s just dragging us down, and we’re going to be doing this for the rest of our lives. Fuck that. Let’s get out of this, get rid of these things that are holding us back, and then we can start to do some awesome stuff. That’s how I look at it. What do you guys think?

Jack: [00:51:01] Yeah. We need to grab this by the neck and really attack.

Ramit Sethi: [00:51:07] Attack. Exactly.

Christina: [00:51:08] Yeah. I like it. I like it very much.  


Ramit Sethi: [00:51:11] And now for their follow ups. First, Christina. Christina writes, “The podcast was truly a life-changing experience with many insights. I was surprised how easy it was to talk with you about this very intimate topic. I consider my financial issues a weakness, and I do not want to be viewed as a weak person. Moreover, I think I hide behind more spending from the fact that I’m in debt just to make myself look better. 


“I realized that I always refer to help from my parents as help from my dad. Probably that’s the reason I never connected with Mike on the topic, since I’ve never observed that connection between my parents. I do understand mutual financial goals are essential and will take steps every day to build that connection. I admit I’m a spender and enjoy it. 

“However, we plan to take care of the credit card debt ASAP before any trips. Lastly, we were truly surprised to find out how much guilt-free money we will have when we updated the CSP. We plan to invest a lot and save up for a Singapore trip that actually was canceled for July, 2023.” 

Jack said, “Being a guest on your podcast felt literally like being a guest at someone’s house. Warm and comfortable. I was actually surprised to see my wife and I so easily share our money struggles publicly, and I’m glad we did. Our talk together helped both of us realize that like other aspects of life, we need to create rules and stick to them. 

“We are now committed to having more money dates together to discuss our rich life and fine tune it as necessary. At least one in two months. I was personally surprised to see my wife change her mind about the trip to Singapore and make a better decision together. And by the way, we are not going to Singapore this year. Instead, we are going to plan a smaller trip close to home in California with a couple of nights with the kids.” 

I want to thank you Christina and Jack. And I want to remind you, on Thursday on this podcast, I’m going to do a special episode where I talk about how I plan my dream travel. I got a bunch of questions from you on social media. I’m going to answer them, including specific locations, numbers, everything. And on Saturday on the podcast newsletter, I’m going to share some peculiar things I’ve noticed about the way that we travel and spend money on it. You can get on that podcast newsletter at iwt.com/podcastnewsletter. Thanks for listening.