Episode #112: “I pretend I want to change. But I refuse to do anything different”

This conversation with Mike and Kate brings a completely new, and shocking, outcome to the podcast. They’re 29 and 32, with some massive life changes on the horizon. But they can’t save any money and lack the financial discipline to make real change for the sake of their family.

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Show Transcript

Download the full transcript PDF.

[00:00:00] Kate: Part of me is resentful to Mike that he wanted this house so bad and that now we have all these things to maintain. Renting was easier. Some days I’m like, God, I just want to move back into our camper van so we can travel the country. This just feels like a burden. This isn’t necessarily what I wanted. Yeah. We did decide to do this together. Part of me is like, I just did this for you. 

[00:00:25] Mike: There was a lot of time to bring these concerns up in the process of buying the house and to really stop us there.

[00:00:35] Kate: Yeah, and I remember a lot of fights about it too. And I don’t feel like my needs are important.

[00:00:42] Mike: I think because I’m just so resentful about it that I’m like, screw it all.

[00:00:47] Ramit: And how can you do this with the two of you and you’re about to incur more stress than you’ve ever had in your life with a baby? 

[00:00:59] Kate: Yeah.

[00:01:01] Mike: I’m terrified.

[00:01:04] Ramit: Are you terrified enough to make a change?

[00:01:06] Mike: Yeah.

[00:01:08] Ramit: Kate?


[00:01:15] Ramit: I’d like you to meet Mike, who’s 29, and Kate, who is 32. Mike is a chef, and Kate is a wellness advisor for a spa resort. Now, in their application, they wrote this sentence describing their situation. He wrote, “We are closing on a house next week, and also just found out she’s pregnant.” I think today you’re going to be quite surprised with the direction of this conversation, so let’s jump right in.


[00:01:44] Ramit: How long until the baby comes? 

[00:01:47] Kate: Due date is beginning of September.

[00:01:49] Ramit: And financially speaking, what has changed since you found out you were pregnant? 

[00:01:57] Kate: Two weeks after we were pregnant, we closed on our first home.

[00:02:01] Ramit: Wow.

[00:02:01] Kate: That is a fixer upper. And our home is important to us because we have– it’s a very small house, but it’s on a lot of land because being able to provide food for ourselves through farming is also really important. So that way we don’t have to rely on the grocery store as much anymore. That was the motivating factor of our house, was that it’s a small house. Perfect. Not a lot to maintain. It wasn’t maintained though, so there is a lot to put into it, financially. And it all happened at the same time.

[00:02:36] Ramit: Okay. You bought a house. You found out you were pregnant. 

[00:02:40] Kate: Yeah. 

[00:02:41] Ramit: And so what brings you here? Why now? 

[00:02:47] Mike: Um, well, I feel like we were doing really well until we got the house. I had read your book, and I had automated investing, automated savings, and I had a pretty good savings. I had some investments, and I pretty much used all of it to get the house. And I was the one that was really keeping track of our money, in conflict with Kate overspending.

And then once we got the house and I abandoned the automation and all that, now she’s the one that is keeping track of the money, and worrying about credit, and, uh, just looking up at it. And I have almost given up. Just said, okay, you’re in charge of the money now. And I don’t like that we’re not really on the same page about it. And I guess there’s something going on there with me that just, I don’t know. I gave up when we got the house. It took so much to get the house that I felt defeated, and it was like, oh, this work has gone to nothing. And now it’s like all the money is going towards fixing up the house.

[00:04:08] Ramit: Okay. Did you expect this when you went to buy the house, how much it was going to cost for the down payment and all that stuff?

[00:04:15] Mike: Yeah. And I was like, well, I have this savings. That’s what it’s for. And I have this investment. That’s what it’s for, right?

[00:04:21] Ramit: Okay. And then what changed?

[00:04:26] Mike: Uh, I don’t know. All the work of the house, I guess.

[00:04:32] Ramit: Expected, or not expected? 

[00:04:36] Mike: Uh, I expected to handle it easier, I think. 

[00:04:42] Ramit: Why’d you buy the house?

[00:04:44] Kate: The land, so that way we can have farm. We just got chickens today. Um, but mostly the land, so that way we can provide food for our family.

[00:04:55] Ramit: And this idea of providing food, did you both grow up doing something similar? 

[00:05:00] Kate: No.

[00:05:01] Ramit: Oh, that’s interesting. Do you think that there’s a financial conflict here?

[00:05:06] Mike: Well, we just got on the same page, but we were arguing over, uh, buying a mattress. There was some conflict around, I wanted one, she didn’t.

[00:05:15] Ramit: All right. Walk me through it. 

[00:05:15] Mike: I think Kate actually brought up the mattress first, sent me the link to the mattress, and then I was like, yeah, let’s do it. It was a pretty expensive mattress. And I think what brought–

[00:05:25] Ramit: Hold on. How expensive? 

[00:05:26] Kate: Uh, ended up being like 23, 22. Yeah.

[00:05:30] Ramit: All right. That’s a good price mattress. And so what happened then? 

[00:05:34] Mike: I said, let’s do it. And, um, we had to put it on a credit card. We actually used a payment plan, the Affirm thing through–

[00:05:41] Ramit: Oh God. 

[00:05:41] Mike: Online or whatever. 

[00:05:43] Kate: Both of us put a lot of emphasis into quality products that are non-toxic. And I’m pregnant and have a baby, and the baby’s going to be in our room, and I don’t want those off-gassing chemicals. And so that was what was most important to me in a mattress, regardless of the price. 

[00:05:59] Ramit: Okay. How did you decide how much you could afford? Can I go out on a limb and guess? 

[00:06:06] Kate: Mm-hmm.

[00:06:07] Ramit: Okay. Can I guess that you had problems sleeping, you said, we got to get a new mattress, you found a mattress you liked, and cost wasn’t really part of the equation at all?

[00:06:20] Mike: Yeah.

[00:06:21] Ramit: Wow. That’s so shocking. And was there any point where either one was like, 2,400 bucks, that’s a lot. Could we get one for less? 

[00:06:34] Mike: Uh, yeah, that did come up, but we wanted a mattress that didn’t have, uh, that was a little safer and more natural.

[00:06:41] Ramit: Okay, so let me ask you, Kate, where’s the conflict here? It sounds like one person wanted a new mattress, you both found one, you bought it, and you can afford it. 

[00:06:52] Kate: I think it’s more within ourselves than anything. Even more than with each other. 

[00:06:57] Ramit: What is it within you? You don’t want to have a payment plan? Okay. 

[00:07:01] Kate: Yeah. So I’ve always just been– when money comes in, I’ll save what I can, but I am here to enjoy my life. And now I’m like, oh my God, we have no savings, and we have a baby coming, and I’m going to have a cut in pay. And so now I have this inner turmoil of, I can’t believe I haven’t been saving more my whole life. I’m fearful of not being able to provide for our child.

[00:07:38] Ramit: Well, you’re going to be able to provide food. You got the chickens. 

[00:07:41] Kate: Yeah. 

[00:07:42] Ramit: So what are you fearful of not being able to provide? 


[00:07:46] Ramit: There are a few moments in people’s lives where they really genuinely care about money, and the major ones are getting married, having children, as you just heard Kate say, getting divorced, and retiring. But because most of us don’t really actively think about money on a regular basis, we don’t actually know how to act in those moments. It would be like me asking you, how are you going to react next time you get in a car crash? You’re like, I don’t know. You’ve probably never been in one. 

In times of uncertainty, we look to other people for cues, and this is why the first time you eat at a fancy restaurant, you observe the person next to you and see how they use their fork. And it’s also why people say identical phrases when it comes to moments like having children. They’ll say things like, I want to provide for our kids. I want to give them everything I didn’t have. I don’t want them to struggle like I did. And my favorite one of all, now that we’re having kids, we need a house with a lawn and an SUV.

Do you? Do you really? And what does providing for a child mean? Can we get specific? These are the conversations that are so important to have before one of these life situations happens to you. Otherwise, you might find yourself just looking to others for cues and doing exactly what everybody else does. 


[00:09:08] Kate: Security and stability.

[00:09:10] Ramit: What does that mean? 

[00:09:11] Kate: We are choosing to spend more money on– we put a lot of emphasis on spending on our grocery budget so that way we can buy good food. I am afraid that’s going to go away especially because we’re just starting our farm, and, um, I’m putting that above paying my loans. I’m just not paying them right now. And so I’m making that choice, but then that becomes like, what if these things get taken away from me because I’m not paying what I’m supposed to be on my student loans because I’m not paying those right now?

[00:09:48] Ramit: Okay.

[00:09:49] Kate: I have a lot of conflict about that.

[00:09:51] Ramit: It doesn’t sound like you’re conflicted. 

[00:09:53] Kate: I feel conflicted. Not even conflicted. I feel fearful that my choices are going to backfire on me because I just don’t know yet.

[00:10:04] Ramit: Okay. 

[00:10:04] Mike: Uh, it just feels like I need to go get more money to make her feel safer and to make us– I mean, I feel the same way. I feel concerned that having a baby’s going to cost us a lot more money, and we’re going to need more.

[00:10:19] Ramit: Yeah. And you probably are. So what are you going to do about that? 

[00:10:25] Mike: Looking at buying a diner.

[00:10:27] Ramit: What? What the fuck?

[00:10:29] Mike: Starting a restaurant. I’m a chef. Starting my own restaurant.

[00:10:34] Ramit: Wait, what? Have you run a restaurant before?

[00:10:37] Mike: Yeah.

[00:10:38] Ramit: You ran it? 

[00:10:40] Mike: I didn’t own it, but I ran it. Yes.

[00:10:42] Ramit: Did it make money? 

[00:10:44] Mike: Yeah. A lot of money. 

[00:10:46] Ramit: All right. Fine. Uh, good. All right, so that’s an option. You want to earn more money. Theoretically, you might start a restaurant. Okay. Would that solve the problem here? Trying to understand the real problem. You bought a house. You’re having a baby. You bought a $2,400 bed. What’s the problem? 

[00:11:09] Mike: We’re racking up debt and not able to rack up savings. 

[00:11:14] Kate: Yeah.

[00:11:14] Ramit: I agree with that. Kate, do you agree with that? 

[00:11:16] Kate: A 100%.

[00:11:17] Ramit: Okay. And is that a problem? 

[00:11:19] Kate: Yeah.

[00:11:19] Ramit: It is. Why Kate? 

[00:11:21] Kate: Because a couple years ago, I was making a lot of money. I started my own business while I was doing that, and I was spending money. I was still earning $55 an hour and wrapped up incredible debt.

[00:11:37] Ramit: How much debt? 

[00:11:39] Kate: Total, 27,000.

[00:11:41] Ramit: Is that credit card debt?

[00:11:43] Kate: Credit card debt.

[00:11:44] Ramit: Okay. In how long? 

[00:11:46] Kate: Six months.

[00:11:47] Ramit: Mm. Okay. And is that debt still around? 

[00:11:50] Kate: $17,000 left. Um, but both of those credit cards closed because I wasn’t making payments, and so I’m very fearful of that happening again.

[00:12:00] Ramit: Why are you fearful? What was the consequence for you? 

[00:12:03] Kate: I don’t even know why I care about this so much, but my credit score tanked, and now I couldn’t even– I’m not on our mortgage. I’m on our deed, but I’m not on our mortgage because no one will approve me because my credit is shot and I don’t have great payment history. That limits me in being able to help Mike with certain things, even though I’m still paying half of everything I need to pay. Um, but I’m not on the mortgage because they won’t approve me. Nobody will approve me for anything.

[00:12:40] Ramit: What do you think of your relationship with money, Kate? How would you describe it? 

[00:12:48] Kate: It’s changed. I used to be like, whatever, it comes easily. Money flows in, money flows out. And then since being pregnant, that has drastically changed. And now I’m like, oh my God, money doesn’t flow in anymore. It’s not as easy as it once was. Now I have a human growing.

[00:13:07] Ramit: Mm-hmm. 

[00:13:08] Kate: I don’t have that same mindset of like, easy come, easy go, which was my mindset for 30 years.

[00:13:16] Ramit: Yeah. What is your mindset now, if you had to describe it? 

[00:13:21] Kate: All I can think of is it’s like I’m holding on dear life and just extremely rooted in fear. I know exactly what’s in our account. I know exactly where everything’s going every month. I’m paying attention to it more than I ever have. I feel like I was spending money on things I didn’t necessarily value before, and that didn’t really make me feel like I was living the rich life that I wanted to live. And now I’m definitely spending money more on what I value and what makes me feel like I’m having a rich life.

[00:13:57] Ramit: Well, I don’t think anything we’ve talked about today is about you not spending money on a rich life. You bought a house because it’s about your values with food. You bought mattress because it’s about your values with health. I don’t that’s the question at all. I think you yourself have told me you’re fearful because you don’t have money coming in and you don’t have any savings, right?

[00:14:17] Kate: Yeah, that’s also a huge part. We have $0 in savings.

[00:14:19] Ramit: So isn’t that a bigger problem than living your rich life when you have a baby and $17,000 of debt? Why are we not talking about that? 

[00:14:28] Kate: Yeah. That’s a huge thing. I just pretend it’s not there.

[00:14:30] Ramit: Yeah, I can tell, and it’s a problem. We’ve been talking now for quite a while, and I’m trying to get you to tell me what the real problem is, but when I ask, you have a variety of techniques you use to dance around the topic. Actually, my behavior is better than it used to be. I’m actually spending money meaningfully. If you can’t get honest with yourself and with me, then we don’t really have a chance of making a change here. So would you like to take another crack at this? Kate, are you good with money? 

[00:15:09] Kate: I’m working on it. 

[00:15:10] Ramit: That’s an interesting answer, but not what I asked. 

[00:15:16] Kate: I’m not confident in being good at it at all.

[00:15:19] Ramit: Okay. How would I know if you were good? 

[00:15:23] Kate: Hmm. If I was paying all my loans. If I was paying every bill that we actually had.

[00:15:36] Ramit: Okay. That would be good. What else? 

[00:15:39] Kate: Um, one thing I have done over the past couple months is automate everything.

[00:15:46] Ramit: Okay. Don’t tell me what you’ve done. I want to know how would I know if you were good. Notice. What’s happening right now?

[00:15:52] Kate: I’m dancing around it. Yeah, my student loan debt and my credit card debt terrify me, and I’m completely ignoring them. I’m not making payments on any of that.

[00:16:05] Ramit: And what happens if you keep not making payments on them. 

[00:16:10] Kate: I honestly don’t know. Nothing’s happened with my credit cards. 

[00:16:14] Ramit: Mike, listening to this, how does this strike you? 

[00:16:20] Mike: It’s nothing I don’t know.

[00:16:22] Ramit: You’re not surprised?

[00:16:23] Mike: Not really surprising. No.

[00:16:25] Ramit: Mm-hmm. Are you concerned hearing Kate’s answers? 

[00:16:30] Mike: Uh, yeah. I mean, I’ve been concerned this– when we got to know each other, she had all of her student loan debt that was also unmanageable, and it’s been that way pretty much since I knew her.

[00:16:44] Ramit: How long you two known each other, and then, um, when did you both get– are you married? 

[00:16:50] Kate: Mm-hmm.

[00:16:50] Mike: Yeah.

[00:16:50] Ramit: Okay. How long did you know each other before you got married? 

[00:16:53] Kate: Eight years.

[00:16:54] Ramit: Okay. And how long you been married for? 

[00:16:56] Kate: It’ll be two years in August.

[00:16:59] Ramit: All right, so Mike, when you met Kate, she had unmanageable student loans. Did that concern you? 

[00:17:06] Mike: Yeah. It took us a really long time to combine finances because I was afraid of that as well, of getting into that.

[00:17:16] Ramit: Did you tell her? 

[00:17:17] Mike: Yeah. I told her that I have my own debts, and I’m working on paying that stuff off. And since she was not paying that stuff off, I said I didn’t want to help her until she did start paying it.

[00:17:30] Ramit: Then what happened? 

[00:17:34] Mike: Uh, she paid them a couple of months maybe, and then we both, after much hesitation, combined finances, and now all of the debt is just both of ours.

[00:17:52] Ramit: Why did you combine? 

[00:17:55] Mike: We were married. It felt like we should.

[00:17:59] Ramit: Okay. All right. Mike, when I asked you how it feels to hear Kate’s answers, you said you’re not surprised. You’ve heard it before, I’m sure. I’m hearing this for the first time. I’m surprised, and I’m troubled. I’m troubled because Kate doesn’t really know the consequences of not paying the debt off.

And in fact, you’re pretty candid, Kate, that nothing really bad has happened. They’ll send you more urgent envelopes, and you’re supposed to pay, and you pay a little bit, and then you buy yourself a few more months of reprieve. That can work for a while, but it’s not really a way to build a healthy family, certainly not a way to build healthy finances. Do you care? 

[00:18:55] Kate: So much.

[00:18:56] Ramit: Mm, I don’t know. You do? Tell me how I would know if I walked into your household with a clipboard. How would I know that you care about building a healthy relationship with money? 

[00:19:17] Kate: I don’t know if you would.

[00:19:19] Ramit: Yeah. Why is that? Why are you dancing around– I mean, I’m not trying to judge you here. I’m trying to understand what’s going on. So why do you think that you are dancing with your answers? 

[00:19:29] Kate: I don’t think I’m looking deep enough to find the truth.

[00:19:31] Ramit: Why? 

[00:19:34] Kate: Because I don’t want to know.

[00:19:36] Ramit: Mm-hmm. Because if you find out, what would it mean? 

[00:19:39] Kate: That I have to take responsibility.

[00:19:43] Ramit: Mm-hmm.


[00:19:44] Ramit: This is extremely fascinating to me. Notice that Kate has created a cobweb of techniques to shield herself from being honest about their money. And to tell you the truth, most of the time, her separate reality works just fine. It’s only now that she’s starting to feel actual consequences with a baby on the way.  She reacts extremely unpredictably using words like fearful and admitting she doesn’t really want to know about her finances because then she’d have to take responsibility. 

There are literally tens of millions of people in America in the same situation, and the truth is throwing a budget at them won’t work. Throwing a compound interest chart at them won’t work. They’re not even at the how stage. In fact, many of them don’t even realize what the actual problem is. They just feel bad, and they don’t know how to interpret that feeling or make sense of it. If you’re single, you can get by in this reality distortion field for a long time. But she’s married, and they’re having a baby, and now they’re facing severe consequences. And I think the worst one of all is that Mike has basically given up on caring about money in their relationship.


[00:20:55] Mike: I’ve gone the other way where she used to be and just go, I’m not looking at it, and I don’t think you would find anything that shows that I care about money now other than trying to be on the show.

[00:21:06] Ramit: You’re checked out of money in your relationship. Am I reading that right? 

[00:21:10] Mike: Mostly, yeah.

[00:21:13] Ramit: Are you checked out because you spent all the money you had saved and invested on this house and now it doesn’t feel good? 

[00:21:24] Mike: Yeah.

[00:21:25] Ramit: Okay. Are you checked out at all because of Kate’s relationship with money? 

[00:21:31] Mike: I think a little bit is that she’s picked up the slack now where she’s looking at the checking account and saying, okay, we have this to spend, and that’s spend, and here’s the bills coming up. I am like, all right, well, Kate’s worrying about it, so I don’t need to.

[00:21:48] Ramit: So Kate has now taken over that role. Is she good at it? 

[00:21:52] Mike: Uh, yeah, I’d say so.

[00:21:55] Ramit: Okay. How would you know if she’s good? 

[00:21:57] Mike: Uh, they haven’t taken our house.

[00:22:01] Ramit: Wow, it’s a bit of a low bar, don’t you think? 

[00:22:05] Mike: Yeah.

[00:22:07] Ramit: Is that a joke, or are you serious? 

[00:22:09] Mike: I mean, we have money for food, and we have money for gas, and we can pay most of our bills, not including our debts, but we can do what we need to do. 

[00:22:21] Ramit: Mm-hmm. For me, paying the bills is not being good with money. That’s a bare minimum. It’s table stakes. It’s like if I asked– you’re about to become parents, and if I said, um, are you a good parent? And you said, yes, I feed my baby. Is that enough to be a good parent?

[00:22:49] Kate: No. 

[00:22:50] Ramit: No. So why would we apply the same thing to our money? Have you two talked about your parenting style? 

[00:22:58] Kate: We’ve started too.

[00:22:59] Ramit: Has that series of conversations surprised you at all? 

[00:23:05] Kate: Not really. I think that’s something both of us have talked deeply about before, um, from our own personal wounds as children.

[00:23:14] Ramit: Yeah. 

[00:23:15] Kate: Um, and how we were parented.

[00:23:17] Ramit: Got it. Okay, great. I’m glad to hear you’re having those conversations. Have you ever had similar conversations about money? 

[00:23:25] Kate: No.

[00:23:26] Ramit: Kate, how were you raised? What do you remember about money as a child? 

[00:23:38] Kate: It was a source of stress, and my parents would also do whatever they could to make sure my brother and I could do whatever activities we wanted to do, no matter what the price was. And I was not allowed to have a job.

[00:23:55] Ramit: Why is that? 

[00:23:57] Kate: Uh, my mom strongly believed that when you’re a kid, you’re a kid, and you don’t have to work. But I also, now as an adult, feel like it was a form of control. 

[00:24:10] Ramit: Control in the sense of?

[00:24:13] Kate: I need her.

[00:24:16] Ramit: Oh. You can’t have a job because you’re a kid. But secretly, you can’t have a job because that would mean you have money, you have independence, you have other things to do besides depending on me. 

[00:24:27] Kate: And that’s why I went to college?

[00:24:29] Ramit: Did you go away for college? 

[00:24:30] Kate: Mm-hmm. 

[00:24:31] Ramit: Was that a source of conflict in your family? 

[00:24:33] Kate: Oh yeah. My mom wanted to keep us as close as possible.

[00:24:36] Ramit: Mm-hmm. 

[00:24:37] Kate: And I was only allowed to go to school four hours away, which was fine. I went to school for dance in New York City, and that’s what I wanted to do, but I didn’t want to go to school. I just wanted to move there and start dancing. And when I told her that, it was a huge fight, and she was like, if you don’t go to college, you’re not getting any money from us anymore. And I didn’t have a job. I had no idea how to make money.

[00:25:01] Ramit: How’d you do it?

[00:25:04] Kate: Student loans.

[00:25:07] Ramit: What do those student loans represent to you now? 

[00:25:09] Kate: Anger and resentment.

[00:25:12] Ramit: Tell me. 

[00:25:13] Kate: I’m so angry that I have this debt that I never wanted, and that when I first– my freshman year, I had no concept of money because it’s not a conversation in my household, and I wasn’t allowed to have a job. And my first year was $30,000 as loans, and my parents never raised a red flag. They were like, yeah, that’s fine. And so I now have $130,000 of student loans, and I have a Bachelor of Fine Arts and Dance.

[00:25:44] Ramit: Are your parents wealthy? 

[00:25:45] Kate: No, they’re upper middle class. 

[00:25:50] Ramit: Could they have paid for your college? 

[00:25:52] Kate: They paid $10,000 a year, and that’s what they said they would pay.

[00:25:56] Ramit: Okay. And what is their financial status now? 

[00:26:01] Kate: I don’t really know. Um, my mom just retired. I know now she’s all of a sudden having budgets, and, oh, I can only spend this much on you for Christmas. I can only spend this much on you for your birthday. They also live a life I don’t want. Um, so I don’t really look at what they do for money. My mom is a shopper, and just growing up was constantly shopping, constantly buying stuff for the house, constantly spending money on things. I’m like, why? 

[00:26:33] Ramit: For example, would she buy a $2,400 mattress? 

[00:26:37] Kate: No, but they’ll spend money on a $25,000 car. We pay for our cars in cash because we don’t want the debt. To me, that seems a lot.

[00:26:47] Ramit: Holdon. What the hell? You pay for your cars in cash because you don’t want the debt, but you pay for a mattress with two years of debt. 

[00:26:53] Kate: I know. Well, we bought the cars before we, uh, or the car, um, I just don’t– that’s also why I was so hesitant about the mattress. I don’t want to add another bill to my plate. I don’t want have another payment. I did because I realized that us fighting every single night was not going to work. Me getting terrible sleep was not going to work. Me freaking out about a mattress laid in with chemicals that’s going to harm us and the baby was not going to work. 

[00:27:25] Ramit: Kate, how about having tens of thousands of dollars of debt? Is that going to work? 

[00:27:29] Kate: No, it’s not working.

[00:27:31] Ramit: It seems to me that that’s the only one that you allowed to play out, to just add onto the debt. 

[00:27:37] Kate: Totally. I think because I’m just so resentful about it that I’m like, screw it all.

[00:27:43] Ramit: How old are you? 

[00:27:45] Kate: I’ll be 33 in two weeks.

[00:27:47] Ramit: It sounds like, in a way, your philosophy with money is, I’ve already lost the game, so I give up. I’m just going to basically play it out until something bad happens to me. 

[00:27:59] Kate: Yeah, that sounds accurate.

[00:28:01] Ramit: Now, if you were alone, I would say, all right, Kate, well, it’s your money. It’s not mine. If you want to play that type of game, good luck. But the issue is you are married to Mike, and you have a baby on the way. 

[00:28:16] Kate: Mm-hmm.

[00:28:17] Ramit: So what may seem fun, and flippant, and something people do in their 20s in New York is actually not that fun. And it’s not cool when you have a family, especially when you are the one who earns the primary income. But you don’t need me to tell you that, do you? 

[00:28:38] Kate: No.


[00:28:39] Ramit: I’m so glad I get the chance to dive deeper into people’s backgrounds on this show. See, if you heard just the first 20 minutes of today’s conversation, you might dismiss Kate. But now we learn her parents’ role in her taking on $130,000 of debt with a BA in fine Arts and Dance.

Now, we also recognize that she could have taken more responsibility to learn about these debts before she signed the papers. And we can understand why she resents her debt, even hates it, so much so that she simply avoids it. And because her parents never talked about money and she never really learned how it works, she suddenly arrived at this place where they’re low on savings, in debt, with a baby on the way, and she has no idea how she should react.


[00:29:29] Kate: Even though we’ve been together for a decade, I’m still trying to hide flaws and things that I feel very insecure about and pretend I’m not.

[00:29:37] Ramit: Mm-hmm. And you haven’t had any consequences, right? 

[00:29:46] Kate: Yeah, there haven’t been any consequences.

[00:29:51] Ramit: Your parents said, we’re giving you 10k. You stayed at college, incurred a lot of debt, still got a car, still got a house, still got groceries. What’s the problem?

[00:30:07] Kate: The problem for me now is, now with the house, it’s choosing to have a functioning bathroom or pay my loan.

[00:30:18] Ramit: And how do you make that decision? 

[00:30:22] Kate: I make that decision by, what do I feel like I need more at the moment? This is an either-or situation. What’s more important to me right now?

[00:30:30] Ramit: Would you say that’s a pattern that you’ve had for a long time? 

[00:30:32] Kate: Yeah.

[00:30:33] Ramit: What’s more important to me?

[00:30:35] Kate: Yeah.

[00:30:36] Mike: The consequences are that we’re not able to build a rich life because we’re always behind.

[00:30:42] Ramit: What do you mean? She told me that she got the mattress, and the house, and the groceries. She’s spending more consciously. Sounds like she’s got a rich life. 

[00:30:52] Mike: I wouldn’t say that. I think that there’s a lot more that we want to do with our money and with our lives than just get the groceries and just pay the bills.

[00:31:09] Kate: I feel incredibly selfish for the debt that I’ve racked up. And so I put off paying it off because I feel like it’s not fair for this $1,200 a month in payments that I’m supposed to be making to be going towards the debt that I’ve racked up because it was all– student loans were before. My credit cards were during Mike. Um, but it feels selfish. We don’t have high income. It is week to week. Uh, everything. We’re paycheck to paycheck. It feels like this need and this desire that I need to pay these bills shouldn’t fall on Mike. And so I just ignore them because I’m like, well, it’s not hurting Mike. It’s only hurting me.

[00:32:17] Ramit: Kate, can you talk to Mike? 

[00:32:19] Kate: Yeah. It’s only hurting me, not you. 

[00:32:22] Mike: It does hurt me though. It hurts us both as a family, and I know that it’s hurting you. It causes a lot of conflict about what we want, and what we can afford, and whether we’re fixing that bathroom or paying your loans. And then when we say, all right, we’re going to do the bathroom, then you’ve expressed that you’ve felt left out because we’re choosing to ignore your loans.

[00:32:51] Kate: I don’t ever want to make my debt a priority when everything is a necessity at the moment.

[00:32:59] Ramit: Mike, ask her if that will ever change. 

[00:33:02] Mike: Will that ever change?

[00:33:07] Kate: Unless we find ways to drastically increase our income, I don’t think so.

[00:33:17] Mike: Even when we have had a lot more income than this, the loans have always been at the bottom of the pile. There’s always been something more important than the loans. There’s never been enough to throw at them, no matter how much we make.

[00:33:37] Kate: Yeah. The payment feels incredibly unmanageable, and it feels like it’s always such a huge chunk of our income to put– my minimum payment is $850. That seems incredibly unmanageable when that’s one of our paychecks for the week. And so it always just feels like, okay, this has to come last because what else are we going to do? This is a huge payment that I don’t know how we’re going to– if we decide to pay this, how are we going to pay for food? How are you going to pay for gas to get to work?

[00:34:21] Ramit: Mike, go back to your question. 

[00:34:25] Mike: Is this ever going to change? Will we ever be able to put money towards those loans and towards that debt?

[00:34:37] Kate: If our current reality stays the same, no.

[00:34:41] Ramit: Mike, how does that answer strike you? I feel like that’s one of the first honest things Kate has really come out and said. Thank you, Kate, for saying that. Tell her. 

[00:34:52] Mike: That strikes me as defeated.

[00:34:55] Ramit: Tell me how you feel, not about her. 

[00:35:00] Mike: I feel defeated.

[00:35:02] Ramit: Okay. 

[00:35:04] Mike: I feel like I don’t know how to change things, and I don’t know how we’ll ever get to pay those loans either.

[00:35:13] Ramit: Okay. Both of you look defeated right now. Am I reading that correctly? 

[00:35:18] Kate: Yeah.

[00:35:19] Ramit: Feel good or bad? 

[00:35:21] Mike: Pretty bad.

[00:35:22] Ramit: Mike, I’m going to take your perspective for just a second, as if I heard my partner, Kate, just say, I don’t really think things will change in our current situation, etc. And my answer would be, that’s just not acceptable to me. I’m just not willing to live that kind of life. We’re too young. We’re too smart to give up on life in our early 30s with a baby on the way. I’m not going to do it, and I won’t allow you to do it either. Mike, what would it feel like if you said that? 

[00:36:05] Mike: Confident. Strong.

[00:36:06] Ramit: Yeah. You ever feel like that in a different part of life? 

[00:36:14] Mike: Yeah. In the kitchen.

[00:36:15] Ramit: Yeah. Tell me about that. What do you feel? How would you describe yourself there? 

[00:36:21] Mike: I feel like no matter what comes up or whatever challenges come my way, that I know that I’ll be able to figure them out.

[00:36:29] Ramit: Hell yeah. You get buried in there, you get too many orders, you’re missing some ingredient, you can figure it out, right?

[00:36:37] Mike: Yeah.

[00:36:38] Ramit: All right. Translate that to money here for a second. You don’t even have to believe it. Just play for a couple of minutes here. Take that same energy and bring it back to this conversation. 

[00:36:47] Mike: I think that no matter how deep we get, we’re going to be able to get out of it. It’s not a matter of if, it’s just when we figure it out. We’ll get through this, and whether we have to– whatever it is that we have to do, we know that we can do it. We’ve done it for our whole lives. We’ve been getting through it, and we’ll continue to keep doing that.


[00:37:20] Kate: I have a hard time believing it right now.

[00:37:27] Ramit: Yeah, me too. 

[00:37:29] Mike: Me too.

[00:37:31] Kate: I feel like we’re stuck in the trap of like, we need a house. We need these certain things because that’s what normal people do. And I don’t want that.

[00:37:47] Ramit: What? What do you mean? You told me. I asked you twice.

I know. Part of me does. 

You told me I bought the house because of land, and it’s very important for us to not be food insecure and to grow our own stuff. 

[00:37:58] Kate: Yeah.

[00:37:59] Ramit: Is that true or not true? 

[00:38:01] Kate: Some days it’s true, and some days I’m like, God, I just want to move back into our camper van so we can travel the country. That’s what I loved. But there was also a lot of sacrifices that had to be made that didn’t always make Mike happy. So now I feel like this house was– I’m always trying to look for the benefits, but part of it is also like, this just feels like a burden. This isn’t necessarily what I wanted.

[00:38:25] Ramit: Okay. Hold on, hold on, hold on, hold on. Is there anything in between a camper van and a house, a fixer upper on a ton of land? Is there any possible different type of option in between the two, say, something that 99% of America lives in? 

[00:38:39] Kate: Yeah. We’ve rented so much before, and honestly, part of me is resentful to Mike that he wanted this house so bad and that now we have all these things to maintain. Renting was easier.

[00:38:59] Ramit: Who decided to buy the house? 

[00:39:05] Kate: I know Mike wants to say we decided to do this together. Yeah, we did decide to do this together, um, and part of me is like, I just did this for you. 

[00:39:15] Mike: I think you would’ve said the same thing in a rental. And it was like we have all these short-term rentals and the instability of– I think it was the baby. It was the, okay, we’re going to get married, and have a baby, and get a house, and get some stability, and start making money, and farm our own land, and be able to sustain ourselves. And that was why we got the house with the lots of land, with the farm. There was a lot of time to bring these concerns up in the process of buying the house and to really stop us there.

[00:40:03] Kate: Yeah, and I remember a lot of fights about it too, and I don’t feel like my needs are important.

[00:40:16] Mike: What are your needs?

[00:40:20] Kate: I don’t think I’ve really given enough time to figure it out.

[00:40:24] Ramit: Well, Kate, you got a baby on the way. It’s time to think about it now. 

[00:40:27] Kate: Yeah. And I think that’s why our conflict is arising, because now I’m like, okay, what do I really want? What do I want to display for this baby? Because I can say things all day, but he’s going to do what we do.

[00:40:40] Ramit: So Kate, can you answer Mike’s question? 

[00:40:44] Mike: What are your needs?

[00:41:04] Kate: I don’t even know what my needs look like. Paying our bills. Paying my student loans is a huge one, and my credit card debt is a huge one. And I did, when we moved to the Berkshires. I started paying it, and you were pissed at me because that money couldn’t go towards a down payment, and so I stopped. It was a huge fight. You were pissed. So I stopped paying.

[00:41:31] Ramit: I just want to point out this dynamic that’s going on here. Mike is genuinely trying to understand your needs, and Kate, in your response, you’ve now turned your answer and weaponized it about something Mike did wrong. 

[00:41:43] Kate: Yeah.

[00:41:43] Ramit: Are you getting anywhere with this? 


[00:41:45] Ramit: Why are you doing it then?

[00:41:46] Kate: I don’t know. 

[00:41:47] Ramit: Think about it. Why did you just answer his very genuine question with your response? 

[00:41:54] Kate: I feel like I need to protect myself because even though it wasn’t an attack, it was just asking me genuinely, what are your needs, it feels really uncomfortable to even know what my needs are.

[00:42:11] Ramit: Why? 

[00:42:15] Kate: Because I’ve never even made myself a priority.

[00:42:19] Ramit: Why not? 

[00:42:26] Kate: I don’t feel like I deserve it.

[00:42:30] Ramit: Where do you think that comes from? 

[00:42:37] Kate: A really deep-seated belief from my childhood. That growing up I felt like every move I made wasn’t for me. It was for my mom. 

[00:43:01] Ramit: Mm-hmm. You still in touch with your mom? 

[00:43:05] Kate: Yeah. Sometimes not willingly.

[00:43:13] Ramit: You’re in therapy also, right? 

[00:43:15] Kate: Just had therapy today, and this was our, uh, main conversation. 

[00:43:18] Ramit: I’m glad to hear that. Has that been helping? 

[00:43:22] Kate: Yeah.

[00:43:23] Ramit: Good. 

[00:43:23] Kate: A lot.

[00:43:24] Ramit: Are you doing that solo, or are you doing it jointly? 

[00:43:26] Kate: Right now we’re both solo, and we have been both doing solo therapy. I’ve been in about three months. Mike’s been doing it for about two months, and we feel like we’re ready to start doing couples.

[00:43:35] Ramit: Great. I’m really happy to hear that. 


[00:43:40] Ramit: I’m always happy to hear that people who come on the show are seeing a therapist. And you’ll notice that once she mentioned it, I backed off of the topic of her mom because that’s between Kate and her therapist. One thing I do want to point out is how I think this podcast fits into the world of self-development and mental health, including therapy.

First off, I’m not a therapist. I have seen a therapist, and on this show, I frequently recommend that lots of guests go and see one as well. I think that we have a lot of options when it comes to improve ourselves. We can get books, we can listen to podcasts, we can hire coaches, and trainers, and therapists, but the honest truth is that most people won’t hire a therapist.

It’s expensive. It’s hard to find one, and worst of all, therapy is stigmatized in our country, which is exactly why I like to talk about it so openly. I think there are different levels of help that we can all use. Some of us start with an audiobook. Others join a coaching program. Many people start listening to this podcast thinking they have some esoteric financial problem only to realize that they actually need more ongoing help from a therapist.

Great. To all of those situations. I want to always be honest about who I am, and what I do, and where my circle of competence starts and ends. And I want to give a big thank you to all the therapists who listen to this show and send me your notes. I appreciate you and support the important work that you do.


[00:45:05] Ramit: Kate, I’m sure that you’ll be spending a lot of time with your therapist discussing these things. I don’t want to impede on that at all, in terms of your parental upbringing, but I am very curious from here, moving forward, what are the effects of the way that you treat money on your relationship with Mike? 

[00:45:28] Kate: So what came up in therapy today was that this fear just ends up coming out as anger, and it’s just constant anger.

[00:45:36] Ramit: Mike, you feel that? 

[00:45:39] Mike: Yeah.

Yeah. And I feel resented just like the loans.

[00:45:43] Ramit: Mm. That’s interesting. And Kate, do you want that? 

[00:45:50] Kate: No.

[00:45:51] Ramit: Okay. What do you want? What type of relationship would you want with Mike? 

[00:45:58] Kate: More compassionate, and more loving, and more open.

[00:46:04] Ramit: I love those descriptions. Would you be willing to try to embody those for a minute or two right now with me? 

[00:46:13] Kate: Yeah.

[00:46:13] Ramit: Okay. Mike, can you ask that same question again? And this time, Kate, give me those three words that you’re going to embody again. 

[00:46:19] Kate: Compassionate, loving, and open.

[00:46:22] Ramit: Beautiful. Go ahead, Mike. 

[00:46:25] Mike: What are your needs, and how can we help you get there? 

[00:46:28] Kate: I need to feel enough. I need to feel important and like I matter. I feel really resentful that you have cut back on working so much, and I feel like me and the baby aren’t important. Part of me feels really resented because even though you knew about my debt, my debt doesn’t matter, and that I’m just a burden. My debt and me are a burden.

[00:47:33] Mike: I understand why you would feel like your debt and you are a burden, but I would like to know how I can make you feel enough and why you feel so little and so small.

[00:47:52] Kate: That’s a good question. Um, I don’t really know exactly why I feel so small. I think a lot of it has nothing to do with you. And at the same time, it all does because I found somebody that kept recreating the beliefs I already have about myself, and I’ve never felt like I was important. Even when it comes down to that stupid bachelor party, I still don’t feel important.

[00:48:54] Mike: What would feeling important look like?

[00:49:02] Kate: When I ask for something, actually listening and honoring it. I’ve been asking for help bringing in more income for months, and it hasn’t happened, and that feels really stressful. 

[00:49:18] Ramit: Can I step in for a second? 

[00:49:22] Kate: Yeah.

[00:49:23] Ramit: Okay. Thank you for this conversation. It feels honest. It does feel open, so I really appreciate that. I want to recognize both of you. Mike, Kate has mentioned the income part of this equation. Is that a fair assessment, what she’s saying, that your income hasn’t gone up and you could if you wanted to? 

[00:49:46] Mike: I definitely have been bringing in less, and it’s been with the intention, and I’ve made this clear, to find better ways to bring in money in ways that make me happier. And I have started the side hustle, the dog boarding thing, and that’s brought in some money. I’ve got another job lined up, and I have things coming. I just feel like it might be not enough. I have heard you that you need more money, and that we need more money as a family.

[00:50:29] Ramit: Do you all know how much you need, or is this just, uh, more?

[00:50:34] Mike: Well, after looking at the conscious spending plan and filling it out, we got really discouraged because it was a significant amount more. More than I would be able to make just working in a restaurant being a chef. And that’s why I’ve branched off and cut back the hours to try to find other ways to bring in that amount of money.

[00:50:57] Ramit: Okay. So to answer my question again, what’s the number you need? 

[00:51:05] Mike: Kate has it.

[00:51:06] Ramit: It is curious to me, as Kate’s pulling us up, that, Mike, you don’t know the amount that you are “supposed to bring in”. Kate knows it. Do you find that curious? 

[00:51:19] Mike: Yeah. When we first filled out that conscious spending plan, it was like, holy crap, that’s more money than I could bring in. So then it just became one of those, I’m not even going to look at it things.

[00:51:33] Ramit: So both of you do this thing where when the news gets bad you just ignore it?

[00:51:39] Mike: Uh, I used to not do it as much. 

[00:51:41] Ramit: Why now? Is it that all the savings went away to the house? 

[00:51:47] Mike: Yeah.

[00:51:48] Ramit: I guess I used to always do it.

Yeah. Idon’t believe you changed. Oh, I spent all my money on a house, and suddenly, I changed. I don’t believe that. Okay. At least you’re honest. 

[00:51:59] Mike: Yeah.

[00:51:59] Kate: Yeah.

[00:52:00] Ramit: So let me get this straight. Both of you have ignored money for a long time, and now you’re surprised that you’re in this situation. 

[00:52:11] Kate: I don’t know if I’m surprised. 

[00:52:13] Mike: Yeah. Not really surprised.

[00:52:14] Kate: I’m not really surprised, but I think it’s now compounding where it’s like, okay, this is an issue now.

[00:52:20] Ramit: Well, it was always an issue. You just didn’t know it.

[00:52:23] Kate: It was always an issue. We knew it. We just pretended it wasn’t, and that it would hopefully get better without consciously making it better.

[00:52:30] Ramit: Can I tell you, though? I think you’re both still doing that. 

[00:52:33] Kate: Yeah. 

[00:52:34] Mike: Yeah. Yeah, it makes a lot of sense.

[00:52:36] Ramit: Okay. So you’re both still ignoring the problems here. All right. Kate, you pull that number up.?

[00:52:44] Kate: Yeah. So net, we would have to both jointly pull i, $12,000 a month. 

[00:52:49] Ramit: You’re pulling in 7,000 gross. So you need a lot more money is basically– 

A lot more money. Yeah.

[00:52:54] Ramit: All right. So let me see if I can state this in a different way. You both calculated your numbers. You realized you need a lot more money in order to effectively what? Cover your expenses. What else?

[00:53:09] Kate: Cover our expenses, save money, both in long-term investments and short-term investments, as well as have our own spending money.

[00:53:18] Ramit: What about the debt? 

[00:53:20] Kate: Oh, the debt. Yeah, sorry. Yeah. Fixed costs, which include debt. 

[00:53:24] Ramit: And so since you realistically didn’t see any path to that, you basically just got discouraged and nothing has changed. 

[00:53:32] Kate: Yeah. Because neither one of us have ever made that much money or come close to it. So it feels like a completely unreachable goal.

[00:53:44] Ramit: Yeah. I could see that. Can’t feel good to see the number you would need comfortably is higher than anything you two have ever made jointly. Then you got the house, you got the baby, etc. 

[00:53:58] Kate: Yeah.

[00:53:59] Ramit: So your conclusion is what? 

[00:54:02] Kate: We both shut down.

[00:54:03] Ramit: Yeah. What would be a different way? If you were confident and competent, what would you do? 

[00:54:11] Kate: Rise to the occasion.

[00:54:12] Ramit: How? 

[00:54:15] Kate: I honestly don’t know. Mike, do you have any ideas?

[00:54:22] Mike: Stop doing what I’m doing and do something different. Definitely not just keep doing the same thing. And that’s why I’ve cut back and looking at other avenues.

[00:54:35] Kate: Yeah. Um, I still think the other avenues are not super viable.

[00:54:43] Ramit: Oh, good. Let’s crush each other’s dreams while we’re talking about what it would look like to be confident and competent. You guys love pattern, don’t you? 

[00:54:51] Kate: Clearly. Yeah, I think encouraging myself and encouraging him instead of tearing down would be a huge benefit and definitely a confidence booster than a confidence deflator, which is definitely what we both do to each other right now.

[00:55:13] Ramit: It’s not– 

[00:55:14] Kate: It’s not good. 

[00:55:15] Ramit: No. How can you do this with the two of you and you’re about to incur more stress than you’ve ever had in your life with a baby? 

[00:55:28] Kate: Yeah.

[00:55:30] Mike: I’m terrified. 

[00:55:32] Ramit: Are you terrified enough to make a change?

[00:55:35] Mike: Yeah.

[00:55:37] Ramit: Kate? That pause tells me everything I need to know. People who are ready to make a change say, I will do anything.

[00:55:50] Kate: I don’t think I will.

[00:55:51] Ramit: That’s honest. You won’t because, why? 

[00:55:55] Kate: Um, I was going to say because I am not willing to sacrifice being happy, and at the same time, I’m not happy right now. If I were to break it down, my thought process doesn’t actually make sense. But the way that I see being able to make up that difference is working 60 to 80 hours, and I’m like, I’m not going to do that. That sounds miserable to me.

So there’s some things I’m willing to do and some things I’m just not because we’ve both worked 80-hour weeks before working in restaurants, and it sucked. It just didn’t feel fulfilling. I wasn’t doing anything else with my life except for working. I had savings. I had the money. We were able to go on a two-month road trip across the country and have plenty of money to spend. Sure. But my day-to-day sucked. So it’s like, am I willing to sacrifice everything just to have more money? No, I’m not. 

[00:57:01] Ramit: You’re being really honest with me. My job here is to help people as far as they want to be helped. Candidly, I don’t get the sense that you’re really willing to make a change right now. I mean, you just said it point blank. I think that you have some stories you tell yourself. One of the stories being that if you were to save money, you have to work 80 hours a week. I don’t find that to be true, but you have convinced yourself that that is the only way as a mechanism against change. 

And Kate, I can’t help if you are not ready to change. Mike, I can’t help if you are not ready to be direct in what you need with Kate. If you’re checked out, there’s nothing I can do to make you care. And so I really want for the two of you to be successful, especially with a baby on the way, but I don’t think that I can do anything to help you at this point. 

[00:58:05] Kate: Hmm. Yeah, that makes sense. 

[00:58:10] Ramit: I wish you both the best.