Episode #135: "It could cost us $50k to have a baby. Can we afford it?"

Kait is 36 and Em is 35. They’re married and pursuing IVF as a means to expand their family. But a misalignment on money stands in the way of a truly shared vision for their future. Em shuts down and delegates responsibility. Kait frantically checks accounts and worries about daily spending.

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Show Transcript

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[00:00:00] Kait: It frustrates me that Em doesn’t know parts of our financial situation. She only wants to talk about money when it’s good and we’re making money.

[00:00:09] Em: I guess I don’t care about it because I feel unprepared, and then I shut down. 

[00:00:18] Kait: I know that I don’t want to be in this dynamic forever. I think that we have a lot of things working against us right now. We have the HELOC. We have the wedding that we paid for on our credit card. We have the IVF that we’re paying for. We have a lot of things that have built up. What I am asking, I think, of Em is to temporarily get in this boat with me to help me help us release the pressure.

[00:00:50] Ramit: You feel like you’re rowing alone. If you could just have a partner in your boat, maybe you could get there safely together.

[00:00:59] Kait: Yes.We want the same things. We just approach how to do them in different ways. I think sometimes we don’t do that because we can’t get to a resolution.


[00:01:11] Ramit: I’d like you to meet Kait and Em. Kait’s 36. Em is 35. And here’s a little excerpt from the application that they sent me. As I read this to you, try to think about your first impressions. How much do you think they make, and how much do you think they spend? Listen in. 

[00:01:29] “I’ve read Ramit’s book and even implemented the strategies. I explained them to my wife, but she often gets frustrated with the limitations of our plan, including how little we can spend now in order to save and how long the timeline is. We’ve had some major fights and disagreements about this. I feel like we have a great 12- to 18-month plan, but my wife feels like we’ll never get there. How can I help her feel more confident and excited in the plan? And what can we do to start to live our rich life now?” 

[00:02:01] I think you’re going to be surprised in today’s conversation, especially when we start talking about the numbers. Before we get to the episode, I want to tell you about this email I got. This asset management firm emailed me, and they wanted me to be involved in their firm. They basically wanted to put my picture on their website. I was like, no, thanks. And then they wrote back again asking a little bit more intently, can we introduce you to our CEO?

[00:02:23] I said, you know what? I appreciate it, but no. Finally, they wrote back and just point blank, in writing, said, I don’t think you understand. We’re going to pay you a $100,000 to be an advisor to our firm. And I declined again. They were shocked. Do you not understand you’re getting money to do nothing? I have the actual email. 

[00:02:43] And this Saturday, in my newsletter, I’m going to share that email along with the psychology of being discerning with who you work with, how to protect your reputation, and be very careful about who you associate yourself with. Most of all, you’re just going to see that there are firms out there literally paying hundreds of thousands of dollars just to be able to put someone’s picture up on their website.

[00:03:06] You’re not going to find my picture on their website, but there’s some other people who I was surprised to see there. You can only get it this Saturday, December 23rd, by signing up at iwt.com/podcastnewsletter. Now let’s get to the episode.


[00:03:21] Kait: I think that the financial discussions that we have and the way that we communicate about money, it causes enough friction in our relationship that it makes a lot of things not fun and not enjoyable. And neither one of us want that in our life. We don’t want to live our life that like that. And I think that, yeah, it’d be really, really challenging to move forward in a happier relationship.

[00:03:50] Ramit: Good to know. Okay. Em, how about you?

[00:04:10] Em: I agree. A couple of podcasts that I did listen to of you, and I watched the Netflix show, which I thought was really I opening, I can’t recall exactly what statistic, but most divorces, they don’t start with someone cheating or someone leaving someone. They start because couples aren’t having the foundational or building block conversations. And a lot of those conversations are around finances. And so that just woke me up to wanting to change.

[00:04:30] Ramit: When you were speaking to my colleague, you said, communication is our superpower, but communicating about finance has really challenged our identity. Wow. I’m seeing nods from both of you. What does that mean?

[00:04:46] Em: Being in a same sex relationship and also it was an early relationship with the same sex for both of us, we had to talk about everything, even if it was things that we weren’t ready to talk about. Things were on the table because we wanted this to work, and therefore we had to have hard talks with our family, had to have hard talks with each other, have hard talks with friends, and things like that, and that really, from a core relationship foundation type of thing, I think, was a huge building block for us.

[00:05:21] And we were able to fall in love and grow in love very quickly. And that was really beautiful. And when it came to doing a lot of the very serious things first, we went through a pandemic, and then we got married right after. We moved in together. We bought a condo. We did just a lot of things very fast.

[00:05:46] We started a small business right after the pandemic. We moved fast, but we didn’t really talk through all of those big moments as financial decisions. It was only after those things that we started to talk about where we were at financially as we started to just strengthen our union together. And we weren’t on the same page about it. And that was a moment where we were like, oh, shoot. This is not normal for us.

[00:06:17] Kait: I had a financial coach. We have a financial coach, and I had used her previously. And after we combined our finances, got married, started living in the same space, I invited Em to a meeting with our financial coach, and it was on that call I just realized that the way that I communicated about money and the things that we were talking about in that meeting, Em was not responding to them.

[00:06:43] Ramit: Like what?

[00:06:44] Kait: In the same way. She shut down on that call. If Em doesn’t feel confident or comfortable with the– if she doesn’t know the answer, I think that she has a tendency to shut down or deflect. Instead of just communicating, hey, I don’t know the answer to that. Let me go check or get the answer, do some research, and we’ll come back. She shuts down.

[00:07:08] Em: I think instead of me participating in those, to do some information gathering, I just shut down and figured, okay, these are the headlines, and I need to go do some work after this, and it felt heavy. It felt heavy.

[00:07:21] Yeah, it felt heavy. I felt like, oh, it’s going to take a lot of time. Like, don’t have a lot of time. I don’t know how I’m going to find this information. I have a lot going on at work. I have a lot to do, and this just feels like it’s going to take hours and hours to get on the same page.

[00:07:39] Ramit: Did it feel fun? 

[00:07:41] Em: No.

[00:07:42] Ramit: Does money ever feel fun to you?

[00:07:45] Em: When I’m spending it.

[00:07:47] Ramit: Oh, that’s an honest answer. Like what? What do you love spending on?

[00:07:51] Em: Food.

[00:07:52] Ramit: Food. Like eating out? Delivery? What are we talking about?

[00:07:55] Em: I love to cook, so it would be very– I’d love to just go to the grocery store and just rake up a big bill and invite a bunch of people over and have a great dinner.


[00:08:05] Ramit: It’s interesting that they say their superpower is communication, but with money, they have a block. That’s extremely common. You see, with things like differences in decor, we intuitively know how to solve it. Let’s look at pictures on Pinterest. Ugh, that’s a disgusting rug from Crate & Barrel. Oh, I guess we were just raised different. Oh, look at this rug. Wow, we both like it. Let’s buy it. We can find a way to compromise. It’s relatively easy. 

[00:08:32] But with money, there are layers upon layers of complexity. First off, most of us don’t even know the basics of money ourselves. We don’t know the difference between a Roth IRA or an index fund, for example. Then we have these invisible scripts we picked up from our parents often in the form of scarcity.

[00:08:47] Finally, we have immense social pressure around money, for example, to buy a house, or to be a provider, or to save more. And to effectively have money conversations, it can feel like you have to be an expert in 10 different things to even sit down and talk about it for the first time. No wonder talking about money feels so hard, even to a couple who has a superpower of communication.

[00:09:13] Well, my goal is to show you that you don’t need to be some multimillionaire working on Wall Street to know how to talk about money. You will have to learn a lot about yourself. You will have to learn a lot about your partner. You might be surprised how you see money differently, but I believe that the two of you can develop a really healthy, positive view of money together regardless of how much you make today.

[00:09:37] We’ll be right back after this.

[00:09:40] Now, back to the show.


[00:09:43] Kait: So we were thinking about going on vacation next year to go see my sister. So she was saying, I think it would be awesome to go see your sister in February. And it was a spontaneous. I had heard nothing previous about doing this, and I think she wanted me to be really excited about going to visit my sister. And I was not excited because, in my mind, I’m thinking about how much is that going to cost? Have we budgeted for it? How are we going to make that happen. 

[00:10:17] When are we thinking about doing that? We already talked about going to Florida in January. It seems like that would be an expensive thing to do right after we’re going to spend X amount of money in January. 

[00:10:33] Em: So initially, when I brought it up, like, this would be fun. We could surprise her, but I didn’t want to surprise Kait because we’re working on this budget or this plan. And so I wanted to loop her in because I wasn’t actually sure how I would do that without Kait knowing. So that’s how I felt initially.

[00:10:51] Ramit: What’d you say when you brought it up?

[00:10:54] Em: I actually didn’t ask her directly. I said something like, hey, if I were to buy you like a diamond ring someday, how would I do that?

[00:11:05] Ramit: Wait.

[00:11:05] Em: And Kait was like, why?

[00:11:07] Ramit: Hold on, hold on. This was about the sister trip?

[00:11:11] Em: Yeah. Because I was trying to figure out how I could temperature check spending money without her knowing, or figuring out how I could spend money that we had on something that she didn’t necessarily know exactly what the end thing would be.

[00:11:28] Ramit: How long do you think I, a straight guy, would last in a relationship like this? Because I already have enough trouble understanding sometimes straight women. You’re asking a question about a jewel that’s a hypothetical that relates to a sister trip. This is blowing my mind. Okay, hold on. And Kait, did you get what she was asking?

[00:11:51] Kait: Yeah, I did. I understood that she was asking if I wanted to surprise you with something– like, if I want to surprise you with something big, since you know everything that happens in our finances, how would I do that?

[00:12:03] Ramit: Okay. Okay. Damn. All right. It’s like you’re speaking a language that’s in the ultraviolet range. All right.

[00:12:13] Em: To be honest, I don’t think it’s women and women, or men and men, or men and women. It’s me.

[00:12:18] Ramit: It’s you. Is that right? Has this been common for your whole life?

[00:12:23] Em: Kind of. I think it’s a family thing, but yeah. 

[00:12:26] Ramit: You speaking indirectly. 

[00:12:28] Em: Very. 

[00:12:28] Ramit: Okay, okay. We’ll get to that. Just hang on to that. I’m filing it away. So then her response, as she mentioned, was a little bit confused, etc., etc. How’d you feel when you got her response to that?

[00:12:39] Em: I felt a little deflated, to be honest, because I felt like we combined the excitement and the finances all together, and I didn’t love that.

[00:12:57] Ramit: In retrospect, if you could go back and do it again, what would you do differently, if anything?

[00:13:04] Em: We did talk about this situation together, and I think something that would have been helpful is to approach her directly, not even about the trip but just about the actual spending. Like, hey, if we were to ever do something, or I wanted to ever do something for you as a surprise, can we start to set up a plan that allows us to do that for each other?

[00:13:26] Ramit: Great. Okay. Love that. And have you actually come up with an answer to that question?

[00:13:32] Em: No.

[00:13:32] Ramit: No. Okay. Hypothetically, that would have been great. We talked about talking about it, but we haven’t actually talked about it.

[00:13:39] Em: I doodled a diamond on my notepad, and that was–

[00:13:43] Ramit: Okay. All right. So are you going to go see your sister, Kait? 

[00:13:51] Kait: I don’t know. We didn’t close the loop on that trip.

[00:14:01] Ramit: Is that common, that you have conversations about money, but you don’t come to a resolution now?

[00:14:08] Kait: Yes, yes. I think, in general, these are the two different types of languages that we speak. Em is very spontaneous, and just in general, not even with finances, but she’s spontaneous and likes to surprise me. And she likes to go on adventures and do things like that, go out to dinner, go on vacation, live our life in a way that’s enjoyable.

[00:14:34] I see things through a financial lens first. I would love not to do that. I would love to go to my sister. I’d love to go out to dinner when she asks me to. I would love to be more spontaneous. So I think that’s part of the reason why we’re here. I think we want the same things. We just approach how to do them in different ways. And I think sometimes we don’t do that because we can’t get to a resolution. 

[00:15:07] Ramit: Can I assume that you are the financial leader or the financial person in your relationship?

[00:15:16] Kait: In terms of planning, yes.

[00:15:19] Ramit: Okay. And what are you not the financial person in terms of?

[00:15:24] Kait: In terms of bringing in the money.

[00:15:28] Ramit: Ah, okay. All right. So Em, you’re a higher earner. Kait, how would you describe what you do with the money?

[00:15:37] Kait: I think I strategize.

[00:15:41] Ramit: Okay. Interesting. And how did you come to this very interesting dynamic? The higher earner brings it in, and then, Em, what do you do with the money once you bring it in? It just goes into your account, and you’re like, I’m good.

[00:15:56] Em: Pretty much.

[00:15:56] Ramit: Pretty much, like, as long as I have something in my checking account, I’m cool. Is that it?

[00:16:01] Em: Yeah. Kait, you should share the situation and how we came up with it.

[00:16:11] Kait: Yeah. Right before we got married, we made a decision to start a small business. So I run the small business. I’m the CEO of the things the small business. But our small business is not yet profitable. So I’m not bringing in an income on myself. So we combined our finances, and a 100% of that comes from Em.

[00:16:38] And then from there, I think I’ve taken on the role as the financial strategist, I guess, in terms of when the money comes in, what are we going to do with it? So that’s a new role for me. I’ve never really thought about that. I’ve never really been good at saving, money or investing money, or anything like that.

[00:17:02] But I thought that since we were starting to build a life together, and we are on the same page about the life that we want to build together, and we’re starting a family, that it felt like a opportunity to step in and just take responsibility. And I also think that because I’m not bringing in income, it feels like I can add value in that way.

[00:17:30] Ramit: Okay. And you had this conversation together. You both agreed this is how you want to work it.

[00:17:36] Kait: Yes.

[00:17:36] Ramit: All right. Good. That’s healthy that you had the conversation about, hey, starting a business. It’s not quite bringing in any money and sure would be helpful if we need some financial strategy. All that is great. All right. So where is it not working? 

[00:17:56] Kait: I think initially, that was great. That’s the conversation that we had. In my role, in that role as financial strategist, I had questions about what different accounts were, what the logins were. So different accounts.

[00:18:14] And as I started to dig through, there were loans that we had and decisions that we had made together when we moved into the house. We took out a HELOC loan for construction and things like that. So we’ve made some financial decisions. We paid for a wedding on a credit card. So we had some debt, and we didn’t really have a financial strategy to pay any of that off because the money was going into her bank account and not doing much after that. 

[00:18:41] Ramit: I’m starting to sweat. I have to admit. I just want to say I’m starting to sweat. I heard HELOC. I had one thing come down my face. Then I heard you put credit card debt for a wedding. I start sweating over here. Okay.

[00:18:53] Kait: The credit card debt is gone, though.

[00:18:56] Ramit: Okay. Thank God. How much did you take out for your wedding?

[00:19:01] Kait: I think we put about $50,000 on credit cards.

[00:19:08] Ramit: What the hell?

[00:19:09] Kait: For our wedding. Yeah.

[00:19:10] Ramit: Are you serious?

[00:19:11] Kait: Yeah.

[00:19:12] Ramit: You’re talking to the one guy in the world who’s like, spend a lot on your wedding if you want to. Just one thing, guys. If you can afford it. if you put on a credit card, you can’t afford it, right?

[00:19:28] Kait: Yeah. Totally. 

[00:19:29] Ramit: All right. You found some skeletons in the closet. And 

[00:19:32] Kait: I found some skeletons, and as I started to work through them and ask questions, those are the types of questions that would make Em uncomfortable and that there would be some friction when we got into conversations about those questions. So for example, I said to Em, what is the bank account that the HELOC is under?

[00:19:56] Em: I guess it’s my Citizens, Kait. Can you look there?

[00:20:01] Kait: I already looked there, and that’s not where it is. So I need you to think of maybe another account that you opened, or go through your email and see if there’s another account.

[00:20:12] Em: I don’t really have a lot of time right now, so I’m going to have to look at it later.

[00:20:19] Kait: I have time to do this right now, and it’s important, and I feel like you should prioritize this because we need to get on top of this and start paying this money back because there’s an interest rate, and every month that we don’t pay it back, we have to pay more and more money.

[00:20:42] Em: I get that it’s important, but I just have a lot to do today, and this just feels really heavy.

[00:20:49] Kait: Do you know how much the interest rate is on our HELOC loan that we’re currently not paying back?

[00:20:55] Em: I don’t know, probably 2%.

[00:20:57] Kait: It’s more like 17 or 18%.

[00:21:04] Em: How did this happen? You know I would ask that.

[00:21:09] Kait: Yeah, you would.

[00:21:10] Ramit: All right, all right. Let me pause. Okay. First of all, great work. You two are great actresses, even though that was real. How honest would you say that was relative to the actual conversation?

[00:21:25] Kait: Yeah, I think the words that we were saying back and forth were right, but we were being very nice and careful.

[00:21:30] Ramit: Right. I think– 

[00:21:31] Kait: In the reenactment.

[00:21:32] Ramit: Probably a little less nice when you had this– because I could how it could become very stressful. 

[00:21:38] Kait: I’ll just be honest. It frustrates me that Em doesn’t know about the interest rates. the aspects of those parts of our financial situation. I would really love for her to understand.

[00:21:58] Ramit: Do you know why she doesn’t understand them or seem to care?

[00:22:00] Kait: They’re not interesting to her. She only wants to talk about money when it’s good and we’re making money.

[00:22:11] Ramit: Well, why don’t you ask her? Maybe you’re right.

[00:22:16] Kait: Em, why don’t you care about the interest rate on our HELOC? 

[00:22:20] Em: I guess I don’t care about it because I just assume that when I opened the HELOC, what was true that day would just stay true throughout its entirety. And so I just feel like it’s a trick or something when things change, and I go on autopilot. And then when something changes, I feel unprepared, and then I shut down. 

[00:22:54] Ramit: And the HELOC is for some construction stuff. What’d you do?

[00:22:57] Em: So when bought this condo, it needed some updates in the bathroom and the kitchen, and so we took out a HELOC for $50,000 to redo the kitchen and bathroom and get it in good shape for us to move into.

[00:23:14] Ramit: Out of curiosity, who suggested you take the HELOC? 

[00:23:20] Em: I think our mortgage broker, right?

[00:23:24] Kait: Yeah, I think our realtor and our mortgage broker.

[00:23:27] Em: Yeah.

[00:23:27] Ramit: Tell me. Say it out loud. I want everybody to hear.

[00:23:29] Kait: Yeah, our realtor and–

[00:23:30] Em: Our realtor and mortgage broker.

[00:23:32] Kait: When we were looking at the property.

[00:23:34] Ramit: And so they suggested–

[00:23:36] Kait: Takeout this wall and–

[00:23:37] Em: They were like, tack it on to your mortgage, and then you just make one payment a month

[00:23:42] Ramit: So interesting. And what do you think their incentive was in suggesting that to you?

[00:23:47] Em: Commission.

[00:23:47] Kait: To get us to buy–

[00:23:48] Ramit: Oh, that’s so weird. Oh, you guys could just take a HELOC. Oh, well, add to my commission. That’s beside the point. Of course it will. I’m legally obliged to tell you that, but anyway, you can have such a cool, beautiful bathroom. Don’t take advice from brokers or realtors ever again.


[00:24:06] Ramit: They have an interesting dynamic. One partner brings in the money. The other is the financial strategist. I’ll tell you what I like about this, is that they’ve talked about money. They affirmatively made that decision for their roles. Now let me tell you what I don’t like. I don’t like that one partner essentially just delegates money to the other and then is hands-off.

[00:24:29] That gives you short-term problems like we’re seeing with Em and Kait, but even bigger long-term problems, such as divergent views on what to do with your money. And of course, the biggest risk of all, what if one partner dies and the other is left without knowing how anything works? Now I ask them how they grew up with money. Listen to the gender issues that Em encountered as a child. Unfortunately, this is too common, far too common with young women. 

[00:24:56] We’ll be right back after the messages from these sponsors. 

[00:24:59]  Let’s get back to Kait and Em. 


[00:25:01] Em: This is going to sound bad. Maybe not bad, but I grew up very comfortable, upper middle class, I would say.

[00:25:11] Ramit: Why does that sound bad? 

[00:25:12] Em: No, what I’m about to say could be, is I just didn’t know there was an end. I didn’t know that there was a budget. I didn’t know that we had to get something not name brand. I just didn’t know that that wasn’t a thing. We weren’t spoiled by any means, but my mom would rather spend $500 on a J. Crew jacket that I’d have for 5, 6, 7 years than to just buy me a jacket at JCPenney’s and it be done in a year.

[00:25:45] My dad, he started a family business. And so he was very much in charge of business, earning, finances, planning, everything, investing, and my mom, she made a decision to be a mom, caretaker. And so she raised all of us kids. There’s three and three. So three boys, three girls, and he was very supportive of all six of us.

[00:26:14] But the way he showed support for the boys was very different than the way he showed support for the girls. And so my brothers, I think, ended up with just more of that shotgun riding with my dad of, here’s how money works, and here’s how money can work for you, where my sisters and I didn’t get that same type of coaching and development. 

[00:26:39] Ramit: What did you hear instead?

[00:26:41] Em: How much money do you need? How much does that cost? Like, oh, I got it. Or, I’ll open an account for you, or, I’ll cover it, or, don’t worry about it, those sorts of things.

[00:26:53] Ramit: And zooming out now at the 50,000-foot level, looking back, what lessons did you internalize from what your dad communicated to you about money?

[00:27:08] Em: Make enough money so that what’s in your account is more than what you’re spending, and save. Open a savings account, and do the, what is it, the rule of threes, invest 30, save 30, and spend 30, or whatever it is, something like that.

[00:27:28] Ramit: That would be amazing, but you’re like, I don’t really want to invest. It’s too heavy for me.

[00:27:34] Em: Yeah. I had an account with Northwestern Mutual, so I just would basically send 30% of my earnings. 

[00:27:43] Ramit: Okay. And do you like the mentality? I was going to say, I’m not saying one is better or worse, but I do think that everybody should be taught how to make their money grow for them. I do think that investing is important. And I don’t think there’s any reason that women should be taught that you should squirrel money away only, and that men should be taught like, hey, make your money grow and turn into millions. What do you think?

[00:28:09] Em: I would agree with you. I think my family, as we’ve all grown, we’ve definitely all developed different stances on money and investing. 

[00:28:20] Ramit: Like what?

[00:28:23] Em: It’s not just the boys invest and have passive income and have their money grow for them and the women don’t. My one sister, she’s a serious go-getter. Her and her husband are just absolutely brilliant in their careers and brilliant in savings. And I think that they do a really great job. Maybe it’s even more extreme than I’ll ever get, but she’s cutthroat, and it’s admirable. 

[00:28:50] And I have a brother who’s maybe less aggressive on things. He’s very much low risk. He’s got a really big family. He’s got a lot of people to take care of, and so he is really particular about how he spends his money and what he does with his money.


[00:29:08] Ramit: Parents, you have to talk to your kids about money, especially your daughters. And I say that because I talk to too many people whose parents never talk to them. And when it comes to women, I frequently hear that the only things they were told about money, save money, don’t spend a lot, and hide a little money just in case something bad happens.

[00:29:32] That is not effective teaching for any child, and I’m begging every parent out here to begin having regular, proactive, positive conversations about money. Of course, the only way you can do that is if you yourself have a positive relationship with money. 


[00:29:52] Ramit: When I saw you recreate your conversation, I noticed a few things. I noticed a bit of frantic energy from Kait. It’s like, I need this. I need this. I need it right now. I have this time right now. Where is it? And like, this is really important. And if we don’t get it, something bad is going to happen, and I need you to know. Okay. Kait’s nodding her head yes. Kait, you agree? 

[00:30:18] Kait: Yes.

[00:30:18] Ramit: Kait, where’d that come from, that energy?

[00:30:23] Kait: I think it’s my general energy when I have something that I want to get done. And I don’t have a lot of patience.

[00:30:33] Ramit: Oh, okay. So is this true in other parts of business and life?

[00:30:40] Kait: Yes, I’d say so.

[00:30:41] Ramit: Both. Okay. All right. Is there an area of life where you are accomplished but also relaxed?

[00:30:49] Kait: Yeah. I throw pottery, so I have an artistic side, a creative side, and I think that when I’m creating and doing something like that, it helps me slow down and focus, and I can relax.

[00:31:10] Ramit: What did you call it? Throw pottery?

[00:31:12] Kait: Yeah. 

[00:31:13] Ramit: What is that?

[00:31:13] Kait: Throwing on a wheel, on the pottery wheel.

[00:31:18] Ramit: That’s called throwing?

[00:31:19] Kait: It’s called throwing. Yeah.

[00:31:20] Ramit: Oh, I didn’t know that. Okay. Wow.

[00:31:22] Kait: You throw a pot.

[00:31:23] Ramit: Oh, cool. All right. So you have to be pretty methodical, pretty slow, but there’s no rushing doing an express pot. All right.

[00:31:31] Kait: Exactly. If you rush, you’ll crush the pot.

[00:31:35] Ramit: Okay. Interesting. 

[00:31:37] Em: I would say, this is recently, but we started doing some workout classes together, and she does seem to turn everything else off but that session. And at the end, I can see her with just some very natural dopamine and endorphins, just leaving, feeling good. And that’s been, I think, another area where I’ve seen her just focus on the moment.

[00:32:11] Ramit: Wow. Kind of cool to hear that about yourself, huh, Kait? 

[00:32:15] Kait: Yeah. 

[00:32:16] Ramit: It’s nice. I want to talk about IVF because I understand that the two of you have gone through or are currently going through IVF. Is that right?

[00:32:25] Kait: Yes.

[00:32:26] Ramit: Okay. And that adds another layer to your story. So can you just walk me through where you are in the IVF process and how you even got started here?

[00:32:37] Kait: Yeah. So we are a queer couple. So in order to have a baby, we obviously need some medical intervention, a little bit of help. And so in order to get started, there’s a lot of upfront costs that a couple will have to put upfront. So not many insurances will cover IVF or any of the process.

[00:33:08] And that was true for us. So in order for us to start our journey, we had to make an initial investment, about 15 to $20,000 that we’ve spent already. And we don’t yet have a baby, and I’m not pregnant. So it’s still a work in progress. Yeah. So it’s a huge financial burden that is on us in addition to the emotional burden going on a journey like that. 

[00:33:42] Ramit: And physical. 

[00:33:44] Kait: Yeah. 

[00:33:44] Ramit: Yeah. Okay. How did you discuss the financial part as you were thinking about the IVF journey? Because when you’re first starting to think about IVF, it’s hard to know, is insurance involved? How much does this cost? How long does it take? How did you go about having those conversations?

[00:34:06] Kait: Right. So we did have some savings that we came into the relationship with. And so we decided that having a family was important to us. And like Em had mentioned initially, these are the types of hard conversations that we have to have as a queer couple, and they’re conversations that we had even before we got married.

[00:34:30] So we always knew that our family was important to us and that that was going to be a huge priority. So we immediately prioritized a portion of our savings account– it’s about $50,000– to IVF, the journey.

[00:34:48] Ramit: And you were both on board with that. Was there any disagreement at all?

[00:34:53] Em: None.

[00:34:54] Ramit: Wow. That’s really nice to hear. All right. So you both agreed, started the journey. Now, IVF, very unpredictable. It could take a variety of different lengths, and all kinds of things can happen. Financially speaking, are you on the plan that you thought you would be? Do you think that IVF has ended up being more expensive than you thought? Talk to me about where you are today on the financial side.

[00:35:23] Kait: Yeah. We’ve gone through IUIs and IVF. So they’re all under fertility treatments, but they’re a little different. We’ve done both. And so if you go through IUIs, they’re a little less expensive. And if they work and you do end up getting pregnant early on, then obviously you don’t end up spending as much money. 

[00:35:47] But if they continue to not work, then you have to continue to spend money and continue to buy donor sperm, and all of those things. We did think that it would happen sooner for us, and so we definitely have spent more money. Like I said, we had $50,000 in mind. It was a very conservative number, and we’ve spent about 20 of it. We also plan on going through reciprocal IVF. 

[00:36:18] Ramit: What is that?

[00:36:20] Kait: It’s when you use the other partner’s egg with the donor sperm, and you put it in the opposite partner. So I’ll be carrying our children. And so we would be using Em’s egg, taking that with the donor sperm, and then I would be carrying. And that is not covered by insurance and could cost about $20,000.

[00:36:49] Ramit: It’s a significant amount, and it’s not clear how much it’s going to cost in the end. Okay, so it’s a lot of money.

[00:36:57] Kait: Yeah.

[00:36:58] Ramit: First of all, I just appreciate you talking about this. This journey is hidden behind closed doors for so many people. Most people never experience it. And of those who do, certainly for me, I’m getting the opportunity to learn what it’s like as a queer couple going through IVF, because I don’t know– if you have, say, a straight couple, a lot of times, they just don’t even know anything about IVF. And the ones who do may have some fertility challenges.

[00:37:24] But yeah, I just appreciate everyone being able to hear the journey that you’re going on, especially how uncertain it is in so many different ways. I’m wishing you the best on that journey.

[00:37:37] Em: Thank you for the kind wishes. We’re excited.


[00:37:39] Ramit: I am thankful that I get to explore IVF with Em and Kait. These are the kinds of topics that are rarely talked about openly, especially with numbers. Now, what I notice is that they’re quite good at planning for certain expenses, but with other parts of money, they’re not connecting.


[00:37:58] Ramit: Did you grow up believing you would always be upper middle class? 

[00:38:03] Em: Yeah. 

[00:38:04] Ramit: Okay. You still believe that?

[00:38:06] Em: Yes.

[00:38:07] Ramit: And so upper middle class to you means what?

[00:38:11] Em: Upper middle class means to me that we are comfortable. Our money is invested. It’s being saved, and we’re able to spend to live life comfortably, for what that means for us– not living out of our means. I don’t mean that. But if we want to go to dinner on a Wednesday night, we can just go to dinner on a Wednesday night. Or if we don’t want to, we don’t have to.

[00:38:38] Ramit: Can you currently go to dinner spontaneously on a Wednesday night? Everybody, look at Kait’s face. 

[00:38:49] Em: I would say the answer to that is yes, but if we say yes to every Wednesday night, we are affecting a future yes to something bigger.

[00:39:06] Ramit: Like what?

[00:39:06] Em: Is it another sperm vail? Is it a bigger house in a different location? Is it a second car, something like that? What do we sacrifice in the future to have dinners every Wednesday night?

[00:39:23] Ramit: Okay. And just out of curiosity, how much are the dinners when you go out?

[00:39:28] Em: What do you think, babe? 250? 

[00:39:31] Ramit: Oh, you do like to eat well. All right. What are you ordering for 250? 

[00:39:36] Em: We like wine.

[00:39:38] Ramit: Okay. Where do y’all live? What’s the area?

[00:39:41] Em: Boston.

[00:39:41] Kait: Boston.

[00:39:42] Ramit: Oh, okay, so you have very nice restaurants. You like wine. Okay. Fine. 250. And how often would you say you got to a meal like that?

[00:39:52] Em: Not as often as we used to.

[00:39:54] Kait: Yeah, we’ve cut back. I think probably twice a month.

[00:39:59] Ramit: Twice a month. All right. And what’d you used to do?

[00:40:02] Em: Couple of times a week. 

[00:40:04] Kait: Five or six times a month.

[00:40:06] Ramit: Fine. All right. Kait, can you go out to dinner on a Wednesday? Do you agree with Em, or do you disagree?

[00:40:14] Kait: Yeah. I agree with exactly what she said. I think we can’t go out every Wednesday. 

[00:40:19] Ramit: Mm-hmm. 

[00:40:20] Kait: But I definitely think that if she suggests dinner on a Wednesday spontaneously, it gets a reaction from me.

[00:40:27] Ramit: What is that reaction?

[00:40:30] Kait: Should we be doing that? I feel guilty. 

[00:40:35] Ramit: Oh, okay. So, Em, you’re more spontaneous. Hey, let’s go out to dinner. Let’s see your sister. Let’s do all these things. And then, Kait, you’re the– how would you describe yourself when it comes to the money?

[00:40:49] Kait: Frantic.

[00:40:51] Ramit: Frantic.

[00:40:51] Kait: Worried. Guilty.

[00:40:52] Ramit: Worried. Like a dragon who’s protecting the treasure. 

[00:40:57] Kait: Yes. I like that. 

[00:40:59] Ramit: And just breathing fire sometimes. Is that accurate?

[00:41:02] Kait: Yeah, it is.

[00:41:04] Ramit: Okay. I get the dynamic. Em, when you suggest, let’s go out to dinner or something, and then you get that response from Kait, oh, I don’t know. What will it mean? Won’t be able to do this. What do you do?

[00:41:16] Em: I think in the past, I definitely would push her to go out to dinner, like, oh, this will be fun. We need this. Let’s just l have a night, forget about everything going on. And coax her into it. And she shared with me that that was something that I was doing, and that made me feel icky.

[00:41:37] And so I’ve stopped doing that. But now I think I’ve swung the pendulum in the opposite direction where I don’t really ask anymore, or if I do ask and she says no, I immediately am like, yeah, yeah, yeah, it’s fine. I shouldn’t have brought that up.

[00:41:51] Ramit: Are you guys in therapy? You sound very conversant in therapy talk.

[00:41:56] Em: We are.

[00:41:57] Ramit: All right. Good. It’s cool. I mean that is a compliment. She told me that I was doing this dynamic. I’m like, all right, cool. All right. That’s awesome. I love hearing that. So you have already built bonds on communicating and having these conversations with each other. As you said to me, communication is your superpower, but it seems like for some reason, money is the one thing you can’t seem to communicate on. Why is that?

[00:42:25] Kait: We don’t know. I think that’s something we hope that you can help us with. My hope is that we can find a balance because I don’t think that this is a dynamic that I want. I know that I don’t want to be in this dynamic forever. I think that we have a lot of things working against us right now. 

[00:42:49] I mentioned we have the HELOC. We have the wedding that we paid for on our credit card. We have the IVF that we’re paying for. We have a lot of things that have built up, and what I am asking, I think, of Em is to temporarily get in this boat with me to help me help us release the pressure.

[00:43:17] Ramit: You feel like you’re rowing alone, and where you need to go is over there. And it’s a bit of a distance away. And you have waves coming at you. You have IVF. You have these loans. You have all kinds of stuff, and you can’t do it alone. If you could just have a partner in your boat, maybe you could get there safely together.

[00:43:37] Kait: Yes. It’s the reason why we’re together, is because we love to go on adventures with each other and to be spontaneous. But for me, in order to do those things, we have to first be responsible and pay attention to the things that are right in front of us, and then we’ll be able to be more spontaneous, and yeah, enjoy life a little more.

[00:44:05] Ramit: Em, what do you hear when you hear her sharing that example?

[00:44:09] Em: I think she’s been asking for those things, and I think she deserves someone to row the boat with her. 

[00:44:22] Ramit: You think that there’s a way that everybody can feel good about money? Everybody.

[00:44:31] Kait: Yeah.

[00:44:32] Ramit: Okay. Lots of nods around the room. What’s the way? Tell me.

[00:44:35] Em: Maybe putting moments of fun into the plan.

[00:44:40] Ramit: I totally agree. That would be amazing. Are you on Chapter 3 or less in the book? You are, right?

[00:44:47] Em: I just started, I think, Chapter 4, the Conscious Spending Plan.

[00:44:53] Ramit: Yeah. I knew it. I knew it. Because go about five more pages, and you’re going to be like, oh, that idea I had was really good. Here it is.


[00:45:01] Ramit: Okay, now I want to get into their finances, which I promise is going to surprise you. If you want to follow along and use my free template for your own finances, go to iwt.com/csp for the conscious spending plan. That’s iwt.com/csp.

[00:45:16] We’ll be right back after this.

[00:45:19] Back to the show. 


[00:45:21] Ramit: How was it filling out the conscious spending plan together?

[00:45:24] Kait: It was good.

[00:45:24] Em: It was good.

[00:45:25] Ramit: Yeah? How long did it take?

[00:45:27] Em: Ten minutes.

[00:45:29] Ramit: Thank God. All right. Let’s see here. Kait, can you read the net worth stuff? Read the bold word and then the number next to it.

[00:45:39] Kait: Okay. Assets, $1,265,000. Investments, $141, 000. Savings, $54,000, and debt, $789,000 for a total net worth of $671,000. 

[00:46:06] Ramit: Why are we talking about 80-dollar dinners? Can anyone explain this to me? I’ll start with the dragon. Kait? 

[00:46:16] Kait: Yeah. I don’t know. I don’t know if that’s good. Honestly, I don’t know if that’s good.

[00:46:25] Ramit: I really love my job. So you’re 36 and 35 years old. Your net worth is $671,000. Is that good or bad? Let’s just start there.

[00:46:35] Kait: Probably good.

[00:46:37] Ramit: Probably good. I’m glad you said that. Em, good or bad?

[00:46:41] Em: Bad.

[00:46:43] Ramit: It’s bad. Okay. How come?

[00:46:46] Em: It’s that compare mentality. 

[00:46:48] Ramit: You’re comparing yourself to your 25-year-older siblings.

[00:46:53] Em: Yes.

[00:46:55] Ramit: Okay. All right. You’re right. When I compare myself to Bill Gates, I also feel horrible.

[00:47:02] Em: Bad. Yeah.

[00:47:02] Ramit: I feel so bad. Oh gosh. Warren Buffett. I’m a total failure at life. My portfolio, it’s nothing. What if you compared yourself to people your age?

[00:47:16] Em: Yeah. I guess before we started this financial journey, I would have also answered bad, but again, it’s those new lenses that I put on. I feel really good about where we’re at.

[00:47:31] Ramit: So sometimes what I say is that the way you feel about money is highly uncorrelated with the amount in the bank. Well, here we go. 

[00:47:41] Kait: Yeah. 

[00:47:42] Ramit: That’s case in point.  All right, let’s take a look at your income. I found it particularly interesting. Em, walk me through your gross combined monthly income. What is this number?

[00:48:26] Em: 28,226.

[00:48:29] Ramit: That’s monthly for everyone listening. Not annual income. They make 28,000 per month. What’s the total annual income, Em?

[00:48:37] Em: It’s right around 338,000.

[00:48:42] Ramit: Okay. Did you know that number?

[00:48:44] Em: Yes.

[00:48:46] Ramit: I love it. Okay. Love it. Love it. Thank you for bringing that average up. Again, 50% of people on this show do not even know how much they make on an annual basis. All right. This is what I love. According to these numbers, one of you makes 27,000 out of $28,000 per month, and the other one makes $560 per month. Can you please explain this to me?

[00:49:10] Kait: So I own a small business, and I only pay myself what goes into my Roth IRA. 

[00:49:20] Ramit: Okay. I don’t mind it. That’s smart. That’s smart. Okay let me explain for everybody listening why Kait does that and why I’m totally on board with it. So Kait goes, I’m young. I want to max out my Roth IRA, especially because my income is relatively low right now, so I can afford to put in the full amount to your Roth IRA.

[00:49:44] So she just pays herself that much. She’s going to take that, invest that post tax money. It’s going to grow forever. And then she’s not going to pay any taxes on the gains, which will turn into a lot of money over time. Meanwhile, she also can afford to pay herself basically nothing because Em is earning this huge salary. So they can run their household on that. Kait, did I get that right? 

[00:50:07] Kait: Yes.

[00:50:08] Ramit: Em, how’s your salary so high? Everybody wants to know. 

[00:50:11] Em: I’m a VP at a tech company. I’m happy with my salary. My hesitation is just from an equity perspective. I’m paid much less than men of equal title in the same industry.

[00:50:31] Ramit: What?

[00:50:32] Em: They’ve been doing a lot of work over the last year with me being a part of the charge to lessen the wage gap, especially at my company, but just industry wide. Other VPs of the same level at different tech companies do make a lot more. Where we’re at as a company, we are working hard to make it more equitable for everyone. But yeah, I definitely want my earnings potential to go up.

[00:51:01] Ramit: How do you feel about your salary?

[00:51:03] Em: I want it to be more.

[00:51:06] Ramit: Kait was shaking her head no. Kait, speak up.

[00:51:10] Kait: Yeah, she’s not happy with her salary.

[00:51:12] Ramit: How do I do this thing? Let me just see this for a second. Everybody, look closely. This is the number we’re talking about per month, $27,666. Now, I’m not saying, Em, that you shouldn’t want more. Of course you want equity. I get that. I’m just saying on an absolute basis, can we agree that for somebody in their mid-30s, this is a pretty good number?

[00:51:38] Em: Yes.

[00:51:39] Ramit: Okay. All right. Again, not taking anything away from all the work that you’re doing. And from what you’re saying, you probably should be compensated much more. All right. You’re in your net monthly income is 16,960, which tells me you’re investing a ton in your 401k, probably maxing it out. Right?

[00:51:56] Em: Yes.

[00:51:57] Kait: Yes.

[00:51:57] Ramit: All right. That’s a lot of money. Good. Well, I have no comments on your income except that it’s great. And it seems like it’s probably going to go up. Right? 

[00:52:06] Em: Yes.

[00:52:06] Ramit: Kait, are you going to make more in the business?

[00:52:10] Kait: Yes.

[00:52:11] Ramit: When?

[00:52:13] Kait: Next year. I have a plan to pay myself next year. So we had a really great year this year. I’m able to pay myself a little bit next year. And in addition to that, I have a couple of side hustles that I’m going to be working on. So my goal is to bring home about three to $4,000 a month.


[00:52:35] Ramit: Here is a couple who is financially doing so many things right. Now, to the untrained eye, you might just see a couple with a high income and say, oh, that must be nice. But I see a lot more beneath the surface. They’ve discussed financial roles in their relationship. They are carefully maxing out their retirement accounts, which is why there’s such a huge disparity between gross and net.

[00:52:57] Is everything perfect? No. They put 50k for their wedding on a credit card. Don’t do that. They took that HELOC that was probably unnecessary. And they’re here because they’re not connecting around money. But from a purely numbers perspective, and even a lot of their process, they are doing great. And I want to take a second to applaud that.

[00:53:17] I think with money, we are all too quick to point out all the things that are going wrong, all the things we’re not achieving. We even compare ourselves to people that are decades older than us. I want you to cultivate the habit of feeling grateful, accomplished, competent. You can feel good about money even if you have debt, and that’s important because feeling bad is not going to produce long-term behavioral change, but feeling good, along with using the systems that I teach in my book and my programs, will.


[00:53:51] Ramit: Savings goal are at 23%. That’s a lot. Why are you saving $3,000 a month for a down payment? What is this? Why? Deep breaths on this call.

[00:54:06] Kait: So we have that money set aside. And the thought is that if we want to buy another house in the future, that we could contribute the money towards that. Although I think we’re both in agreement that right now we don’t need to buy another house. We’re comfortable here. But with the plan to grow our family, we will grow out of space in this house. And also, we don’t want to pay a higher interest rate. I think our interest rate on this mortgage is 3%.

[00:54:34] Ramit: But if you were to buy a new place, your interest rate would naturally be much higher, right?

[00:54:39] Em: Especially right now in the market.

[00:54:42] Kait: When we started talking about IVF and when we do eventually grow a family, the plan is for me to stay at home with our kids. And so I think the longer that that has taken, it has started to weigh on me a little bit that I’m not bringing home any additional income, so any pressures on myself. 

[00:55:06] Ramit: I certainly don’t want to be the one to add that pressure, but I’m glad you’ve had those conversations. That’s awesome. You’re a team. I hear it. All right, let’s keep going. Your fixed costs are 48%. What am I going to say? I have no comments. You have a 3,300-dollar mortgage, which is 13%. When I factor in your utilities, that’s fantastic. What is this, a condo you own?

[00:55:30] Em: Right.

[00:55:31] Ramit: Okay. That’s the one you’re in right now?

[00:55:33] Em: Yes.

[00:55:34] Ramit: All right. Looks good. So your 54,000, if we broke it out, you have money for IVF and some of the money for this new potential house.

[00:55:42] Kait: Yes. 

[00:55:43] Em: Yeah. 

[00:55:44] Ramit: Hey, how long could you go in this house with a baby? 

[00:55:51] Kait: I think we have different perspectives on that day-to-day. We have one extra bedroom, so we have an additional bedroom right now. So with one extra bedroom, we could go until that baby is more mobile. So once the baby’s born, a year and a half. So anywhere from two to three years from now, we need to look at buying another house.

[00:56:14] Ramit: If you rented the house that you have right now, how much would you get for it? one you’re in.

[00:56:20] Em: We were quoted 4,300. 

[00:56:21] Kait: 4,000. 

[00:56:22] Ramit: 4,300, and you currently pay 3,300. Okay. Although you’d probably break even with maintenance and all that stuff, maybe. But okay. So would you potentially consider keeping this, renting it out, and then getting another one? 

[00:56:37] Kait: Mm-hmm.

[00:56:38] Ramit: Whoa, going to have a little real estate empire over here. I don’t mind it. For everybody listening who thinks I hate real estate, I don’t mind it, if you can get the numbers to work. Very interesting. Okay. Maybe you end up doing that. Maybe the next place you get, you buy. Maybe you rent. You could certainly do that. There’s lots of options you have. I wouldn’t rush into anything particularly with 8% interest rates, etc., but you have time. 

[00:57:10] I love that you’re planning. In fact, I just want to highlight this on. This is a very, very savvy savings goal. First of all, you’ve broken it up by different names. They’re named accounts. That’s awesome. You have a baby saving and spending at $50 a month. Amazing. And especially amazing because you’re doing this before there’s a baby.

[00:57:30] And I just love that. And of course, the longer you save, the less you have to save. So 50 bucks a month right now is going to turn into a lot of money. That’s amazing. You got this amount for debt payoff and house payment. Let’s just call it house payment. Okay. All right. Looks good. Blah, blah, blah. What kind of car do you drive?

[00:57:53] Em: A Volkswagen Tiguan. I think it’s 2021.

[00:57:56] Ramit: All right, fine. Your groceries are 600 bucks. That’s pretty low. 

[00:58:01] Em: Right? 

[00:58:02] Ramit: So it’s what? The food spend is all eating out? Is that it?

[00:58:06] Em: Yeah.

[00:58:07] Ramit: Why are you guys laughing?

[00:58:09] Kait: She thinks it’s too low. Because groceries is too low. 

[00:58:11] Ramit: She thinks it’s too low. 

[00:58:12] Kait: She wants to spend more money on groceries.

[00:58:16] Ramit: Em, how do I say this nicely? You’re in your household income is $28,000 per month. If you want to spend an extra $200 a month on groceries, you don’t have to sacrifice on a t-shirt. Do you know that? And I’m going to show you the actual math because I want you to make better decisions when it comes to your money. I want you to feel comfortable. So right now, this number, your fixed costs number is 48%. 

[00:58:46] Just to give you an example, let’s say we add an extra 500 bucks a month. I’m just playing here just for fun. Watch this number that’s currently 48%. Okay, let’s see what happens. It jumps up to 51%. It’s nothing. Let’s add 1,500 bucks a month. 57%. Okay, now we’re getting a little high. All right. I don’t think you need to do that. But an extra 100, just look at the number. It literally changes nothing. What do you take away from that, Em?

[00:59:13] Em: I think the takeaway for me there is it’s not about being $50 dollars over or $50 under. It’s figuring out what’s that sweet spot and staying within the range that keeps our fixed costs at the percentage point that we want it to be at, what we need to be saving or spending on.

[00:59:37] Ramit: Yeah. And take advantage of the fact that you’re obviously very good at your job and that you have a great relationship where you can be great at your job, and Kait, you can be great at starting your business. I always ask myself, what do I get? Whenever I’m doing something that’s a lot of work, I go, what do I get? 

[00:59:57] Literally, I put my hand out, and I go, what do I get? What do I get for working hard at my business, etc.? I get to travel, and I get to stay at beautiful hotels. I get to surprise my friends and family, and I get to not have to count the prices when I go to a restaurant. I just don’t want to.

[01:00:20] I set a range. I’m generous with myself, and then I never have to check it. So what do you get? If you love food, pick a range that is comfortable, but then you get to be able to get the nice pasta if that’s what you want. How does it feel to hear that?

[01:00:41] Em: It feels nice. Relaxing.

[01:00:43] Ramit: Yeah, I love that word, relaxing, peaceful.

[01:00:51] Em: Yeah.

[01:00:51] Ramit: I love the transformation when we first started talking to where we are now. You two are much more open about– I can definitely and very clearly see the love between you, and I love being able to connect that to your money because when I see this money, I don’t just see a conscious spending plan. I see beautiful vacations, and I see you eating amazing food with friends and loved ones. That’s what I see, and that gets me excited. 

[01:01:23] Remember this. This is really important. This is where people find comfort in their numbers, in this order. They find comfort in their checking account, then their savings account, and last, their portfolio.

[01:01:41] Kait: Yeah.

[01:01:41] Ramit: Now, can I tell you how I find comfort?

[01:01:44] Em: Your portfolio first.

[01:01:46] Ramit: Yeah. If my portfolio were a blanket, I would call it blankie, and I would lie with it and just cuddle up. Now that’s comfort. And that also grows, and it compounds. That’s comfort. The thing that drives me insane is people finding comfort over this tiny thing. I go, that? That’s providing you comfort, something that’s earning basically no interest, some little checking account just because you can see it? And so what I want people to do is to dream bigger.

[01:02:19] Comfort comes from your portfolio. That’s like a moat. Nobody can mess with you when you have your moat of wealth. Something goes wrong? Yeah. Okay. You pull out for them your checking. It’s too big? You got your savings. Some opportunistic thing comes along, or you want to buy a huge house or whatever, boom, portfolio. So I want everybody to reverse what they love. Portfolio first. That’s the third person in your relationship. 

[01:02:46] There’s the two of you and your portfolio. That’s love. Second is your savings. You got a nice savings. It’s a healthy amount, and you’re growing it. Checking is irrelevant. Whatever’s there, cover it. Put a little bit extra so you can float it, and let’s not talk about checking. It’s just uninteresting. That’s how you have a healthier relationship with your money. All right?

[01:03:15] Kait: Yeah. Awesome. I want an investment blankie.

[01:03:18] Ramit: Yeah. Damn, I need to create some merch.

[01:03:22] Kait: Yeah, you do.

[01:03:23] Ramit: It’s a blankie, and it just says, Your Moat.

[01:03:27] Em: Now you got this dragon a moat.

[01:03:29] Ramit: I know. You know what? I need a merch store. And after every podcast, we’re going to have some new little thing. Damn. That would be amazing.

[01:03:38] Kait: If you start selling dragon stuffed animals, I want a percentage. 

[01:03:44] Ramit: One last thing I want to do, speaking of investments, I would like to plug in your investments. Have y’all ever done this where you plug in your investment numbers?

[01:03:53] Kait: No. With the number that we were just working with, that extra $12,000 a month.

[01:04:01] Ramit: All right. Let’s play with it because I want you to see what numbers we’re dealing with. Because when you first got on the call, we’re talking about 80-dollar Wednesday lunches or whatever. I’m like, no, I’m not talking about this with them.

[01:04:15] Kait: They were 250-dollar dinner.

[01:04:17] Ramit: Yeah. All right. So here’s the current amount you have. Okay. Invested. And do you know how much you’re going to add every year based on just your current income in your mid-30s?

[01:04:31] Kait: 46,000, something like that.

[01:04:36] Ramit: Right about that. Yeah, exactly. So let’s be conservative. Let’s call it 46,000. I would have said 50, but let’s just say 46,000 to be conservative. I like it. Years to grow, how long?

[01:04:49] Kait: 30.

[01:04:49] Ramit: Yeah. You’ll be 65 by then. Again, just good calculation. And what percentage should we assume? Em, I’m asking you. What percentage should we assume here?

[01:04:59] Em: Eight.

[01:05:00] Ramit: Oh, good. I’ll say seven because I like to be conservative, but eight is also valid. Let’s say seven, though. Let’s do it my way. All right. How much, Em, are you going to have if your income does not increase one bit for the rest of your life and you just keep this plan up? How much are you going to have?

[01:05:16] Em: About two million.

[01:05:18] Ramit: Damn, someone’s run some numbers before. Well, it’s actually a little bit more than that. Five million, 5.7 million. What do you say? Em looks completely uninterested in this number. Hold on, let me zoom in on this face. Em, that’s five million bucks. That’s adjusted for inflation.

[01:05:38] Em: It’s awesome.

[01:05:39] Ramit: She’s like, that’s really cool. I can buy that. I can go to Italy and get that pasta. Em, that’s a lot of money. Kait, you feel safe? Anybody here feel comfortable?

[01:05:50] Em: Yes.

[01:05:51] Ramit: All right. It’s a lot of money. What I want to do is I really want to congratulate you because now you’re playing big. And of course, you can play with it. You don’t have to wait 30 years. You want to see what happens at 20, just to say, oh, maybe we retire early? All right. 2.5 million. But maybe you start earning a lot more. I’m sure that business is going to crush it. And maybe instead of 46,000 a year, you’re contributing, you turn that into 65,000. At your income, it’s totally possible. 

[01:06:21] So what happens? 3.3 million in 20 years, and 7.6 million in 30 years. And of course, if you just let it sit there, 11 million by the time you are 70. The numbers are huge. Point is you started big. You started early. Now what matters is consistency. And the only way that the two of you can be consistent is if you both feel good about money.


[01:06:51] Ramit: I really enjoyed speaking to Em and Kait, and my approach today was to focus more on the positivity because their numbers are solid and their strategy is generally very good. What I wanted to do was to shift them from feeling like money is a burden, like they’re a dragon being totally uninterested in money, to taking a victory lap and saying, hey, we did that.

[01:07:14] I took this approach because I saw that they have done this same thing in so many other parts of life. And what I wanted to do was to connect their feeling of accomplishment and togetherness with their money. Em and Kait are a great example of not needing to go deep on the tactics because they’re quite smart.

[01:07:32] They’re going to figure it out. But the real opportunity is to change the way they talk about money, they behave with money, and most importantly, the way they feel with money. Let’s hear their follow-ups. First, let’s hear from Em. 

[01:07:46] Em: One of the big things for me was participating more. So I started to add different reminders on my calendar that come up on a monthly basis to check our HELOC loans, our Mint account, just to make sure that I’m showing up in a way that allows Kait to be able to have those conversations with me, where I don’t feel as though I’m being bombarded, but that I’m participating in my own rescue a bit more, and not depending on Kait for all of that, because I know that stresses her out.

[01:08:21] One of my base takeaways was the plan and what it means. The plan is a budget, but what it really is is that if we have goals in our life, we need to make sure that we’re planning and creating pathways for us to achieve those goals. The last takeaway that I’ll share with you is one of the things that I loved what you said was to play big means to be consistent. 

[01:08:48] And what that meant to me based on our conversation is when we started to look further out into the retirement timeframe, but that in 10 to 12 is our opportunity to create some really big wealth. And chunking it down like that has me really excited for some of the things that we can do as we keep earning, as we keep investing, and continue to grow not just our finances but our goals and growth towards them. So definitely appreciate it.

[01:09:23] Ramit: And now, Kait’s follow-up.

[01:09:25] Kait: One of the things that surprised me about our conversation was when you picked up on my frantic energy that I have around money. It was a useful moment for me because I think that I put so much importance, and I want so badly for money not to cause anxiety that I actually make it cause more anxiety.

[01:09:50] Something I took away from our conversation is that we actually are in a really good place. We actually don’t need to maybe save as much. We can spend a little more and maybe look at investing a little bit more, so we actually have a very good, solid financial foundation.

[01:10:09] Something I noticed was that what I could do is to contribute more financially, and I think that that’s going to help me feel more confident about the money that we do make and about spending money, and also just to check our finances less and not be going through the transactions on a day-to-day basis. Take a zoomed-out approach and only look at our finances. 

[01:10:37] Something that I plan on doing this month is actually Em and I are going to go out on one of those 250-dollar dinners that we deserve, and we can afford, and we should go out on, and we are going to have a lot of fun. So thank you so much. And we hope to talk to you soon. 

[01:10:56] Ramit: Now I want you to watch this episode which has some similar and surprising dynamics in it.