Episode #183: “I saved $5k for an engagement ring, but she secretly took the money”

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[00:00:00] Ramit: On today’s episode–

[00:00:01] Michelle: I pretty much got myself in a huge student loan debt.

[00:00:04] Matthew: I don’t have debt like that, so seeing that now, it’s just like, what do I do here?

[00:00:08] Ramit: Meet 33-year-old Michelle and 31-year-old Matt. They’ve been dating for seven years, and they are stuck in relationship limbo.

[00:00:15] Matthew: Pretty shocking just to see the amount of bills that she has per month compared to what I have to pay per month.

[00:00:20] Ramit: Michelle is a nurse with a good income, but she has a mountain of debt that includes credit cards, a personal loan, and student loans.

[00:00:27] Michelle: Coming here is going to be the only shot I have because I literally don’t even understand why I do it.

[00:00:33] Ramit: Matt works in finance. To him, money is simple. He just follows his system.

[00:00:38] Matthew: She just needs to be more responsible and held accountable.

[00:00:41] Ramit: Yet, despite Matt’s help, Michelle is paralyzed by the size of her debt. She’s worried Matt is going to leave her.

[00:00:48] Michelle: I’m worried that he’s going to realize that he can’t trust me with money and that he doesn’t see a future with me because I’m financially irresponsible.

[00:00:56] Ramit: Can I help Michelle understand the root of her money problems so she can turn this around and create a Rich Life with Matt?

[00:01:02] Have you ever taken money from him?

[00:01:04] All right. I’ve got Michelle and Matthew’s CSP in front of me, getting ready for our conversation. Let’s take a look. Zero assets, $47,000 in investments, 263K in debt. Since they don’t have any assets, it’s probably not a mortgage. It’s likely student loans. Maybe there’s some credit card debt, maybe a car loan.

[00:01:22] Moving down to income, Michelle makes a lot more than Matthew, but as I move down the fixed cost, I can see Michelle’s debt payment is $2,542 while Matthews is only 136. Probably suggesting that the bulk of that $263,000 debt is Michelle’s. Hmm. What’s going on here?

[00:01:44] Okay. Overall, Matthew’s numbers seem fine. Michelle’s numbers are a different story. Investments pretty low. Miscellaneous spending is high. Could be that she’s overspending. It seems like it. That’s interesting. Let’s see what’s going on on their application.

[00:02:00] We don’t live together. We had to move back home because we couldn’t afford it. He doesn’t trust me with money. I’m very scared he won’t trust me to have kids with me. We aren’t engaged, and it’s holding our future back from moving forward. I want to feel some self-worth.

[00:02:20] Looks like there are as lot of factors at play. Pretty big stakes in terms of moving the relationship forward, which is stagnant because of money. We’re talking about marriage. We’re talking about kids. I think this is going to be a pretty substantive discussion. Let’s meet Michelle and Matthew.

[Interview]

[00:02:38] Michelle: You said in one podcast, if psychologically you don’t understand why you’re doing it, you’re going to continue doing it, the patterns with money. And I’m literally in that position where I have no excuses for myself anymore because I don’t know why. It’s so big, and it’s so overwhelming, and it’s even bigger than me that I can’t even realize it.

[00:03:02] Ramit: What do you mean why?

[00:03:03] Michelle: My relationship with money.

[00:03:04] Ramit: What is your relationship with money?

[00:03:05] Michelle: It’s not good. It’s not really existent. I’ve worked since such a young age. I have no money saved. I have a lot of debt. It’s not a healthy relationship. So when I signed up I was like, “I think you’re really the only person that can help me.”

[00:03:28] I want to pay off all my credit card debt, pay off all those debts first, and then also pay off my student loans. I feel like I’m constantly in debt to people because of my mistakes, and I just don’t want to owe anyone anything. I’m worried that he’s going to realize that he can’t trust me with money and that he doesn’t see a future with me because I’m financially irresponsible.

[00:04:01] Ramit: Has anyone ever told you that you can pay off your debt? No one, right? You can. Let’s talk about money in your relationship. So how long have you been together?

[00:04:15] Matthew: I would say about seven years.

[00:04:17] Ramit: Okay. And I understand previously you lived together and right now you’re not. How long did you live together before you both moved in with your parents?

[00:04:28] Matthew: So we moved in together in November of 2022. And then we moved out in January of this year.

[00:04:35] Ramit: Okay. So basically a little over a year living together.

[00:04:38] Michelle: Mm-hmm.

[00:04:39] Matthew: Yeah.

[00:04:39] Ramit: Okay. What happened that caused you to move out?

[00:04:43] Matthew: We came to the realization that we’ll just save money living at our parents’ house and then hopefully one day be able to afford to buy a condor, a house, or an apartment.

[00:04:57] Michelle: We were spending a lot trying to fix the place, but it was already run down.

[00:05:03] Ramit: And were you both okay moving back to your parents?

[00:05:07] Michelle: No, I wasn’t.

[00:05:08] Ramit: Okay. Why?

[00:05:10] Michelle: Because I knew that it was going to suck.

[00:05:12] Ramit: Yeah. Okay. What about for you–

[00:05:14] Matthew: For me, they’re like my roommates now, but I have no problems with them, and they accept me for being able to come back. They’re always trying to help me.

[00:05:23] Ramit: Okay, cool. I appreciate it. So you moved out. You moved back to your parents. So it was you and your mom.

[00:05:30] Michelle: And my sister.

[00:05:31] Ramit: Oh, okay. And living situation wise, how is it?

[00:05:35] Michelle: The three of us?

[00:05:36] Ramit: Yeah.

[00:05:36] Michelle: It sucks.

[00:05:37] Ramit: Oh, how come?

[00:05:40] Michelle: Because I feel like I’m the mom, so I’m the one that cooks. I’m also the one that spends at the grocery store the most because of that. And so that’s one thing I also feel like I’m just the one that they go to for everything. It just always feels like I’m responsible for like my two kids, my mom and my sister.

[00:06:04] Ramit: You ever have a problem saying no in your life?

[00:06:06] Michelle: Oh, yeah.

[00:06:07] Ramit: Lot of things, right?

[00:06:08] Michelle: Yeah.

[00:06:09] Ramit: Personal?

[00:06:11] Michelle: Yes.

[00:06:11] Ramit: Professional?

[00:06:14] Michelle: Oh yeah.

[00:06:15] Ramit: Okay.

[00:06:17] Matthew: She says no to me. No problem.

[00:06:19] Ramit: Yeah? Is that true?

[00:06:21] Michelle: No. I recently realized that I am a people pleaser.

[00:06:27] Ramit: You recently realized. I realized it in five seconds. What do you mean you just recently realized it?

[00:06:31] Michelle: I remember that it was something to do with, I don’t know if it was with my mom, always doing favors for them, or if it was with my sister, where I even like sometimes put it before even doing something with Matt. I’ll even be like, no, I have to do this for them. And if my sister got out of a breakup and it really was a lot on her, I would always be there for her instead of leaving to his house, which is my safe space.

[00:07:07] Ramit: Interesting. The space that the two of you had together was your safe space, even though the rental was not particularly great. Right?

[00:07:15] Michelle: Honestly, wherever he is, it’s my safe space.

[00:07:19] Ramit: Wow. That’s pretty much the nicest thing you could hear.

[00:07:23] Matthew: Very nice. Thank you.

[00:07:25] Ramit: And yet you moved back into this tumultuous household where you are defacto the person who cooks and manages all the responsibility. What do you make of that?

[00:07:44] Michelle: That I don’t put myself first.

[00:07:46] Ramit: Mm-hmm. Why?

[00:07:48] Michelle: I don’t find myself worthy. I feel like when I do these things that they want me to do or if it makes their life easier, that makes me worthy, I guess. It gives me a sense of worthy.

[00:08:09] Ramit: Has a chance to. Maybe if I cook this one dinner, maybe if I listen to my sister’s challenges with her relation, maybe if I do this and that and this, then they will?

[00:08:21] Michelle: Respect me.

[00:08:22] Ramit: Yeah. Do they?

[00:08:24] Michelle: No.

[00:08:26] Ramit: Maybe if you give it 10 more years. What do you think?

[00:08:29] Michelle: Yeah.

[00:08:30] Ramit: Or maybe there’s a completely different way to look at this whole situation. Because while you have put yourself back in that situation, what have you taken yourself out of?

[00:08:41] Michelle: My future with Matt.

[00:08:43] Ramit: Yeah. And meanwhile, what’s going on with your finances as you moved in? Presumably you’re saving a lot of money, right? No. You’re not paying rent anymore, are you?

[00:08:54] Michelle: I am.

[00:08:55] Ramit: What? Who are you paying rent to?

[00:08:58] Michelle: My dad.

[00:08:59] Ramit: Okay. How much are you paying?

[00:09:02] Michelle: 360 a month.

[00:09:04] Ramit: 360. What were you paying when you and Matt were splitting it?

[00:09:07] Matthew: It was 650.

[00:09:08] Ramit: What? Hold on. I have no problem people moving in with their parents, but I’m like, “Cool, you’re going to save 1,000 bucks or 2000 bucks a month.” Saving 300 bucks a month, and now you’re cooking, doing all this stuff. Are you basically losing money now living with your family?

[00:09:24] Michelle: 100%.

[00:09:25] Ramit: This doesn’t make any sense to me. Not only the relationship, the financial part of it.

[00:09:30] Michelle: Yeah.

[00:09:32] Ramit: What the [Bleep] is going on right now?

[00:09:33] Matthew: Yeah, I’m not sure. I didn’t know she was losing money.

[00:09:35] Michelle: Yeah. I feel like I’m always losing money being there.

[Narration]

[00:09:39] Ramit: Did you hear what Michelle just said? She moved back in with her family to save money, but she’s actually losing money every month now. And Matt didn’t even know. This is a very telling example of how money is not simply about numbers. So many of us make financial decisions because we feel we should. We feel we should save money, so we simply jump from one thing to another.

[00:10:04] I need to move back in with my parents. I need to buy a house. I should cut back on brunch. We are missing one essential thing, actually making big financial decisions using real numbers. If you really listen, you hear why. Did you hear the words Michelle used to describe herself? I’m a people pleaser. I don’t find myself worthy. Matt is my safe space.

[00:10:30] She knows something is wrong, but without knowing how to probe into it, she defaults to her worldview of not trusting herself, leading to her moving back in with her parents. I’m curious to learn more.  So let’s get back to how they talk about money in their relationship.

[Interview]

[00:10:48] Ramit: When was the first time you had a real conversation about money?

[00:10:54] Matthew: I don’t think we’ve ever had a conversation about money.

[00:10:56] Michelle: I don’t think we’ve ever. Yeah.

[00:10:57] Ramit: In seven years.

[00:10:58] Matthew: She doesn’t really like talking about that.

[00:11:01] Ramit: Okay. What’s your experience?

[00:11:02] Matthew: Then I also don’t push her on it because she’ll be writing in a planner, let’s say, of all her bills. I’ll go over to take a peek and she’s like, “No, no, no. Stop. Don’t look.” I do keep peeking, but it’s always the same thing.

[00:11:15] Ramit: You go across the room and you pull out your binoculars. You go, “What’s on that?”

[00:11:20] Matthew: Set up a mirror behind her.

[00:11:22] Ramit: Why do you think that Michelle says, no, no, no, about you looking at her finances?

[00:11:28] Matthew: Probably because she’s embarrassed.

[00:11:30] Michelle: Yeah, I am. I’ve even told him,” I’m not ready to show you.” Even though it’s been seven years. It wasn’t until recently, honestly, that we had this coming up that I actually was upfront about it in general.

[00:11:41] Ramit: You sat down and talked about the numbers?

[00:11:43] Michelle: We didn’t sit down and talk.

[00:11:44] Matthew: She filled out the CSP, and that’s where I saw the number.

[00:11:48] Ramit: First time.

[00:11:49] Matthew: Yes.

[00:11:50] Ramit: What was that like for you?

[00:11:52] Matthew: Pretty shocking just to see the amount of bills that she has per month compared to what I have to pay per month.

[00:11:58] Ramit: And what was it like for you to do the CSP?

[00:12:01] Michelle: Honestly, it was very overwhelming. It was depressing at the same time just because I saw the debt ratio, and it was literally all mine. It’s just a letdown, I don’t know where I went wrong with everything, or I just never started, I guess. But it’s just a letdown, especially now that I have my adult job and knowing that I make decent money and knowing that I have nothing to show for just puts me down, honestly.

[00:12:39] Ramit: It’s interesting the way that you talk about money because you are early 30s, right?

[00:12:44] Michelle: 33.

[00:12:45] Ramit: In a way you’re talking about money like you’re 75 years old. Like, “Oh, I just wasted my life. I got nothing to show for it.” But when I look at it, I go, “You’re at the beginning of your career.” I’m seeing a young woman who has a professional career as a nurse maybe didn’t learn about money, and you’re starting off. What do you think about the difference in our perspective?

[00:13:10] Michelle: I wish I would think of it like that a little more because I’d be a lot easier on myself, maybe a little more forgiving for the mistakes I’ve done. I feel like my own worst enemy when it comes to money, especially, it’s something so embarrassing and so shameful. I feel like I just carry this scarlet letter with money. It’s something that takes a toll on me, and I feel like I judge myself based on it.

[00:13:44] Ramit: Can you read back some of those words you just said to me? Did you catch them? Scarlet letter, forgiveness.

[00:13:50] Michelle: Yeah.

[00:13:51] Ramit: Worst enemy. Not even worst critic, worst enemy. What else did you say?

[00:13:57] Matthew: Shame. The main one was the scarlet letter. I thought that was pretty interesting.

[00:14:03] Ramit: What do you think about that?

[00:14:05] Matthew: Pretty brutal to compare yourself to that.

[00:14:08] Ramit: Talk to yourself a lot like that about money?

[00:14:10] Michelle: Yeah.

[00:14:11] Ramit: And other things in life too?

[00:14:13] Michelle: Yeah.

[00:14:15] Ramit: And then, Matt, do you talk to yourself like that about money?

[00:14:19] Matthew: No. I have a good system, I think, where I just get paid, pay my bills, and then whatever’s left over is what I either invest or save.

[00:14:30] Ramit: Quite a different perspective on money, right? Shame, judgment, scarlet letter. And then, Matt, you used the word system. Doesn’t seem emotional to you at all. So how do the two of you relate about money?

[00:14:44] Michelle: We don’t. Every time I would watch the show when it was on Netflix, I would cry just because it’s so relatable. They all said stuff that I’ve said. And to him, he’s just like, “No. Well, it’s not that hard. You just have to pay it.” And I’m always like, it’s not that easy.

[00:15:04] Ramit: Money’s different. Why?

[00:15:07] Michelle: I honestly have no idea. I’m definitely irresponsible with it.

[Narration]

[00:15:11] Ramit: Notice the pattern of Michelle avoiding money conversations and ignoring money herself. When she finally confronts it, she immediately uses words of deep shame and guilt. You can see this so often in people’s relationship, for example, with food. It’s not as simple as telling them, just eat less, or just spend less when you truly understand the psychology involved.

[00:15:38] Hearing someone talk about themselves like this always makes me sad. Think about it. Most of us would never, ever talk about our friends like this. We would never call our husbands or wives these words, yet some of us use these words with ourselves over and over for years, and we really start to believe it.

[00:15:58] We’ll delve deeper into Michelle’s money psychology after this quick break from our sponsors.

[00:16:03] Now back to our conversation.

[Interview]

[00:16:05] Matthew: She just needs to be more responsible and held accountable for herself.

[00:16:11] Michelle: I always let bills pile up and insurance lapse. I guess that happened back in April. I had to give my registration in, and so technically it was suspended. And so now I technically don’t have it. I can’t drive it for two months because of that.

[00:16:33] Ramit: Okay. So what do you do?

[00:16:35] Michelle: Literally rely on my parents taking me somewhere, like to my work. I don’t go anywhere. Or him getting me. It’s only been a week with it. I’m responsible for people’s lives as my profession, and then it’s like, “Hey, mom. Can you get me from work?”

[00:16:55] Ramit: I’m not laughing at you.

[00:16:56] Michelle: No, it sucks.

[00:16:57] Ramit: Okay, it’s [Inaudible], but let’s get to the root of why it happened. You didn’t file a registration. Why?

[00:17:04] Michelle: There wasn’t enough funds because I spent it in other stuff that I shouldn’t have been.

[00:17:10] Ramit: Which was what?

[00:17:11] Michelle: Food, ordering Uber Eats. When I get home from work, I don’t want to cook anything. And then living at home, like I said, my mom doesn’t cook, so nobody’s cooking for me. So just wanting to order something.

[00:17:27] Ramit: What do you get?

[00:17:29] Michelle: It’s really depending. Maybe diner food.

[00:17:32] Ramit: You order a diner food to be delivered? I can’t think of a worse meal. What do you get?

[00:17:37] Michelle: Pancakes.

[00:17:40] Ramit: That does sound pretty good.

[00:17:41] Michelle: Or a burger. If I can’t make up my mind, it’s pancakes.

[00:17:44] Matthew: And French toast.

[00:17:45] Ramit: How much does this cost? I do love understanding the total amount. Because you know when you order like a Chipotle bowl or something? It’s like, I don’t know, 13 bucks. And then if you get it delivered, it’s $37. But I’m like, okay, it makes sense. I’m not blaming anybody. Somebody needs to be paid for that. How much does your pancakes cost when you get it delivered

[00:18:06] Michelle: About 20. With delivery and everything probably 20.

[00:18:10] Ramit: I don’t believe that. 20 bucks.

[00:18:12] Michelle: 24, 24, 25. With the tip and everything.

[00:18:14] Ramit: For two pancakes.

[00:18:15] Michelle: Yeah. Pretty much.

[00:18:18] Ramit: Does anyone else find this funny?

[00:18:19] Michelle: No.

[00:18:20] Ramit: $24 for two [Bleep] pancakes?

[00:18:22] Michelle: I know. And it’s all because I get home so tired, I don’t want to make it for myself.

[Narration]

[00:18:26] Ramit: We once ran a pilot program on food and fitness. We hired a full-time personal trainer and we helped people lose weight and put on muscle. And some people changed their entire lives using that program. But I have to tell you, the psychology of food and weight that we learned was absolutely shocking.

[00:18:46] For example, we had a student who would binge late at night, and they would describe in vivid detail how they would be eating snacks at the kitchen counter, knowing they shouldn’t be and hating themselves for every second of it. That’s the word they use, hating themselves. But they just couldn’t bring themselves to stop.  

[00:19:05] We asked them why they did it, and they said the same thing Michelle said, “It’s dumb. I know I shouldn’t. I guess I just can’t get control of myself. I’m irresponsible.” And we said, “No, we don’t believe any of that.” And we pushed them to go deeper using the 5 Whys technique.

[00:19:20] It turned out they were hungry because they’d skipped lunch. Why? Because they didn’t pack a lunch. Why? Because they were late out the door that morning. Why? Because they had stayed up the night before watching Netflix.

[00:19:35] They were blaming themselves for this massive moral defect, but what we found was something much simpler and behavioral. You need to set a time to go to sleep and follow it. Now, food, of course, has so many different reasons for why we behave the way we do. It’s not often as simple as this. There are often much deeper issues, and for those I would highly recommend speaking to a trained specialist.

[00:20:01] But today, do you see the connection, and do you see how I’m doing the same thing here with Michelle? She let her insurance lapse. Why? Because she didn’t have enough money. Why? Because she orders from DoorDash. Why? And so on.

[00:20:15] Sometimes the best thing you can do is to stop assigning moral judgements to yourself and instead treat your behavior like a scientist. What am I doing? Why do I do that? Why? Why? Why? You can learn more about how to use this approach in my program Success Triggers at iwt.com/products.

[Interview]

[00:20:39] Ramit: Okay. So that’s one. You get the $12 each pancakes. Fine. And then what other bills did you have?

[00:20:46] Michelle: My student loans. That’s a huge chunk of it. And then I have my credit card debt.

[00:20:51] Ramit: Huh?

[00:20:52] Michelle: My credit card debt.

[00:20:52] Ramit: What’s that for?

[00:20:54] Michelle: A lot of dumb stuff.

[00:20:56] Ramit: Like?

[00:20:56] Michelle: A lot of shopping, a lot of Uber Eats.

[00:20:58] Ramit: You said shopping. You shop a lot, and you said, “It calms me.” What does that mean?

[00:21:05] Michelle: It just makes me feel like I’m not in the position that I actually am.

[00:21:09] Ramit: Which is?

[00:21:11] Michelle: Broke.

[00:21:13] Matthew: It distracts her from her life.

[00:21:16] Ramit: Have you helped her with her debt?

[00:21:19] Matthew: Yeah, I did. I co-signed a loan for her.

[00:21:21] Ramit: What? How much?

[00:21:23] Michelle: It was–

[00:21:24] Matthew: 15,000.

[00:21:25] Ramit: What was the loan for?

[00:21:27] Michelle: Consolidating.

[00:21:28] Ramit: Consolidating your debt?

[00:21:29] Michelle: Yeah.

[00:21:29] Matthew: Yeah, I’m not really sure what she did with that.

[00:21:32] Ramit: What? Hold on. What’s happening right now? You co-signed a loan for your girlfriend. Did you ask like, “Hey, maybe I might be open to it, but I need to see your finances, and we need to make a plan.” Did you say that?

[00:21:50] Matthew: I didn’t see her finances or ask to make a plan. I just trusted her to, I guess, do the right thing. I guess I just thought she would know what she was doing.

[00:22:01] Ramit: What do you mean? She’s had debt for so long. She tells you about money all the time. Right?

[00:22:05] Matthew: I didn’t know what kind of debt she was in. I didn’t know the amount.

[00:22:09] Ramit: Are y’all hearing this as you talk about it? What does it sound like to you?

[00:22:13] Matthew: We just need to talk more.

[00:22:15] Ramit: Oh, that’s for sure. That’s the bare minimum. I’m glad you’re here. That’s right. Sometimes people need me as an excuse to talk about money for the first time. But do you see the alarm on my face?

[00:22:26] Michelle: Yeah.

[00:22:26] Matthew: Yeah.

[00:22:27] Ramit: What do you think is going through my head right now?

[00:22:31] Michelle: Why would you trust her with that?

[00:22:33] Ramit: Yeah. Why would you trust her? Why would you co-sign a loan? And it’s not just about you, Michelle. I’m not saying that you are untrustworthy. I am saying I wouldn’t co-sign almost anybody’s loan. And if I did, I’ll be like, “Read my book,” and I would quiz them of every freaking sub-chapter.

[00:22:54] Explain this to me. What about this? What happens if this happens? I would make them work. So to me, this speaks to a complete lack of relationship about money between the two of you, a lack of transparency and honesty; the fact that he did not know you had even 20k of debt, much less 10 times that, and Michelle, your inability to handle money. You took a loan to consolidate money and ended up in a worse place. Have you ever taken money from him?

[00:23:36] Michelle: Yeah.

[00:23:38] Ramit: What happened?

[00:23:40] Michelle: When I wasn’t working, he had money saved up in his safe. And since I really wasn’t working, because I was studying, I would take and then I would say I was going to replace. Before he noticed, I would replace it. And then it just never happened. And then one day he went to go grab something from it, and I didn’t even know how to tell him.

[00:24:17] Ramit: What happened, Matt?

[00:24:19] Matthew: It was just missing, and I was just really disappointed.

[00:24:24] Ramit: Did you say anything?

[00:24:25] Michelle: Yeah.

[00:24:26] Ramit: What? What was the conversation?

[00:24:29] Michelle: Honestly, there wasn’t a conversation. It was actually silence. But honestly, I still live with that guilt so bad because literally, he’s never judged me about it. He’s never made me feel less of a person for even doing that. And I went and betrayed him.

[00:24:58] Ramit: Does this sound like a healthy relationship with money to the two of you?

[00:25:02] Matthew: It hurt, and I just lost trust.

[00:25:07] Ramit: Did you tell her that?

[00:25:09] Matthew: I don’t think so.

[00:25:12] Ramit: You want to tell her right now?

[00:25:15] Matthew: I lost my trust with you, and it hurt.

[00:25:20] Michelle: I’m sorry.

[00:25:22] Matthew: It was going to be her ring. That’s what I was going to pay for her ring with. She’s always asking about a ring, and that’s the reason why she hasn’t gotten it yet.

[00:25:35] Michelle: Because I took the funds that he had for it. I get really scared that he’s going to question if he sees a future with me and even my ability to be a parent, because of that dumb stuff I’ve done.

[00:25:57] Ramit: I feel like right now we’re opening up, lifting the lid on something, and it feels treacherous. It feels dangerous. Does he want to stay with me? Does he think I’m going to be a bad parent? I’m going to guess that you have lifted the lid up, and this is so scary, you’ve just covered it right back up and pushed it away in the past.

[Narration]

[00:26:21] Ramit: This goes so much deeper than spending money on DoorDash pancakes. Michelle feels guilty about taking money from Matt’s safe, as she should. We’re talking about $5,000, which is a big deal. And now she’s scared that he’s not going to stick around to build a future together. But he hasn’t expressed wanting to leave. If anything, he hasn’t reacted angrily enough for what I would’ve expected.

[00:26:45] Can you imagine what this conversation would be like if the genders were reversed and a boyfriend stole from his girlfriend’s safe? I see gender dynamics here. I see personal psychology. I see a common dynamic where someone continues to blame themselves, but after a while you start to say, “Okay. Now what?”

[00:27:05] You can blame yourself, but it’s almost starting to seem like a defense mechanism. And the question is, what are you going to do about it? I want to explore Michelle’s childhood so I can understand what sorts of money situations were modeled to her when she was growing up. We’ll dig into that after this break.

[00:27:23] And real quick, if you enjoy these videos and you want to be the first to know when we drop a new one, make sure you hit that Subscribe button. It really helps my team and me grow.

[00:27:32] Now back to our conversation.

[Interview]

[00:27:34] Ramit: You ever felt good about money?

[00:27:37] Michelle: No.

[00:27:39] Ramit: If you didn’t feel bad about money, what would you feel?

[00:27:44] Michelle: I have no idea.

[00:27:46] Ramit: It’s pretty common. People who have felt bad about money for so long, it’s like having a leg pain times 1,000. You get used to it. You forget what it was like to not have that. And then if I ask you what would it feel like to not have that, people go, “I don’t know. It’s been with me forever.”

[00:28:06] Michelle: I’m definitely irresponsible with it.

[00:28:09] Ramit: Okay.

[00:28:11] Michelle: I wasn’t taught anything with it. It was a control thing growing up. So I always said, “I’m not going to be controlled by money.”

[00:28:19] Ramit: Who controlled it?

[00:28:20] Michelle: My dad. He was the sole provider. He worked long hours, maybe 16, 17 a day, Monday through Friday. Barely got to sleep. And my mom was a stay-at-home mom to take care of me and my sister, and he was the one that was in control of everything, pretty much.

[00:28:39] Ramit: When you say control, give me a specific example where he exerted control using money.

[00:28:46] Michelle: If he would say something mean to us or something, or get out of line, he would like buy us something or give us money. That’s how it started. Also, with my mom, my mom for a while was in credit card debt, and I know my dad lost his lid when he saw Macy’s bill, and then he paid it off for her. But it’s like my mom always had to go to him for money, and I didn’t like that. Because I felt like it took her independence away.

[00:29:19] Ramit: Because she had to ask for money, she was in a less powerful position or subservient, like, “Please give me money.”

[00:29:27] Michelle: Yeah. Or even sometimes he would just blatantly be like, “Oh, well, I’m the one that pays bills. I’m the one that has money.” As I got older and I started talking back, that’s what I remember the conversations would be.

[00:29:41] Ramit: So he would say, don’t talk back to me. I’m the one who provides for this family.

[00:29:45] Michelle: Yeah. Or, “Don’t say that. You’re going to need my money.” Or it’s like, “Oh, it’s always my money.” Or, “You’re brokie. You’re brokie.”

[00:29:55] Ramit: What did you feel when you heard your dad saying these things?

[00:29:59] Michelle: I felt like it was disgusting. I feel like he just thought that because he came from another country, he had to work from such a young age, and he’s done very well for himself for being born in another country and not really knowing the language and coming up. He’s done his American dream. But then because of that, I feel like we’ll never do good enough. He’s just like, “You guys will never understand. You guys are spoiled.”

[00:30:25] Ramit: I think it’s true. You will never understand. I will never understand what it’s like for my parents to have been born in India and come here. That doesn’t necessarily make me spoiled. What did your mom say as these conversations were happening between you and your dad?

[00:30:42] Michelle: Oh, she’d stay quiet.

[00:30:44] Ramit: How come?

[00:30:46] Michelle: I’m assuming she felt maybe that way about herself too, so she just would try to avoid it.

[00:30:56] Ramit: Did you ever talk to your mom about money as a kid or as a teenager?

[00:31:01] Michelle: No.

[00:31:02] Ramit: Never?

[00:31:03] Michelle: No.

[00:31:03] Ramit: How come?

[00:31:05] Michelle: Because it was my dad more that had it, so I would just go to my dad. Let’s say for a field trip and stuff like that, my mom would just always make us be the one to ask for it. She would never ask for us.

[00:31:17] Ramit: Looking back, do you see that as normal or abnormal?

[00:31:21] Michelle: Abnormal, completely.

[00:31:23] Ramit: Me too. What happened as you got older when you were a teenager?

[00:31:27] Michelle: My dad still was the one providing, and then when I was able to get a job at 14, I started working.

[00:31:34] Ramit: What did it feel like when you started getting a paycheck?

[00:31:38] Michelle: Great. Because I didn’t need to ask my dad for anything. In a way made it seem like I needed him less, even though I didn’t, because I was still living in his house and stuff. He would look for any other excuse in a way to poke at you. When it started changing the most was when I had to go to college and get student loans. And that’s when it all went bad.

[00:32:05] Ramit: What happened?

[00:32:06] Michelle: My dad is my co-signer for my loans. I had to apply to private student loans, Sallie Mae. And then when I was done with school, I had to start paying the student loans, and my dad was like,” I don’t even remember signing these loans,” the cosigner ones.

[00:32:31] Ramit: Whoa.

[00:32:32] Michelle: Yeah. And so then he would go on this tangent, saying, till this day he still says that, we forged his signature, even though I literally remotely remember the fights we would get into because of it. Because I tell him like, “If you don’t want to do it, I can just work. I’ll just delay.” He’s like, “Delay another semester? No, do whatever you got to do.”

[00:32:58] And then I would try to explain to him. He wouldn’t want to be involved to be honest. He would say he was too busy with work and all that, and so then he would just be like, “Here, do what you got to do.” And being dumb and young and not really understanding that interest increases and that I’m going to have to pay everything back, yeah, I pretty much got myself in a huge student loan debt.

[00:33:24] Ramit: How much did you graduate with in debt?

[00:33:27] Michelle: Overall?

[00:33:28] Ramit: Yeah.

[00:33:29] Michelle: 250,000.

[Narration]

[00:33:31] Ramit: This is so horrible. I cannot imagine growing up with a dad who talked to me like that, who talked to my mom like that, and then who lied about co-signing a loan. Yes, Michelle has responsibility here. She also signed for that loan. Now, I’m not a therapist, so I don’t feel comfortable characterizing how her father spoke to her, but let’s just say my personal view is I am extremely pissed at him.

[00:33:57] If you grew up under that kind of household, can you imagine how you would react? I don’t think most of us can. So Michelle graduated with $250,000 in loans. Let’s keep going.

[Interview]

[00:34:11] Ramit: Looking back on the financial relationship you had with your dad regarding the co-signing of the loans, what words come to mind for you, the first words that you feel?

[00:34:20] Michelle: It’s really messed up that he actually feels that I would have the ability to go– or honestly, just the morals to even go and forge that knowing that every time we got into a fight, I would go ask him, “What should I do about the semester?” I would try to see. He would say no. It’d be a huge thing. Do whatever you want. I’m going to need you because my mom doesn’t have any credit, so they’re not going to give it to her. It was just always a headache.

[00:34:50] Ramit: Why do you think he said that it was forged? Obviously that’s not true. Why do you think he’s saying that?

[00:34:55] Michelle: Because I think he feels stupid that he didn’t take the time to be involved. And also, his anger and his stress took the best of him. My dad is pretty good financially. He’s very strategic with his money. He works hard for it. But I think he feels probably dumb that he let me jump into that.

[00:35:24] Ramit: So he feels dumb. You think he feels angry, maybe ashamed, maybe overwhelmed that this happened and he didn’t realize the implications. And so his conclusion is to do what?

[00:35:39] Michelle: Blame it on me.

[00:35:39] Ramit: Blame it on you. In other words, not take responsibility, not create a plan. Just I need this bad feeling to go away.

[00:35:47] Michelle: Yeah.

[00:35:48] Ramit: Okay. Do you see any links between the way that your dad handles money and the way that you handle money today?

[00:35:55] Matthew: She avoids her problems with money, and he avoids talking about his problems with money.

[00:36:04] Ramit: What do you say, Michelle?

[00:36:05] Michelle: Yeah. He never spoke to us about money, problems with money or anything?

[00:36:09] Ramit: Do you talk to Matt about money?

[00:36:11] Michelle: No.

[00:36:11] Ramit: Hmm. Okay. That’s one. How do you think your dad feels about knowing that he co-signed a loan and now his daughter graduated with quarter million dollars in debt? How does he feel?

[00:36:24] Michelle: Guilt.

[00:36:25] Ramit: Guilt. You ever feel guilty about money?

[00:36:27] Michelle: All the time.

[00:36:28] Ramit: Two. What else? Does he make a plan? Is he methodical about what to do? Does he do his research and then come to you and say, “I think we should do this? What do you think?”

[00:36:41] Michelle: No, never.

[00:36:42] Ramit: Never made a plan.

[00:36:43] Michelle: No.

[00:36:43] Ramit: Okay. You ever make a plan with your finances? I’m going to do this. I’m going to pay off debt. I’m going to know the month and year.

[00:36:49] Michelle: I do it all the time. I try my best, but I never execute it because then it becomes overwhelming when I start seeing the numbers so big, to be honest.

[00:37:00] Ramit: I’m going to count that as three because writing a plan in a journal or ruminating on it, that can feel like executing a plan, but it gets you 98% of the way there. But that last 2% is fundamentally the only thing that matters. So 1, 2, 3 links between your dad and you. What do you think about that?

[00:37:28] Michelle: It sucks. Because that’s what keeps us from having a relationship now. All we do is fight about my student loans.

[00:37:42] Ramit: Any of this surprise you, Matt?

[00:37:45] Matthew: I’ve heard stories over these seven years, so not really, because she always comes to me crying or expressing what happened.

[00:37:58] Ramit: Yeah. It’s a really tough situation with your dad who’s supposed to love you in so many ways. And cosigning the check and then turning around and saying you forged it.

[00:38:12] Michelle: Yeah.

[00:38:13] Ramit: Obviously that’s not true, but beyond that, for a dad to say that about his daughter, there’s something fundamentally wrong. Can we all agree?

[00:38:22] Michelle: Yeah.

[00:38:23] Ramit: Okay.

[00:38:24] Michelle: I feel like overall I haven’t been able to grow. I haven’t been able to do anything.

[00:38:30] Ramit: With your finances, with your relationship, with your family.

[00:38:36] Michelle: Yeah.

[00:38:37] Ramit: With what else?

[00:38:39] Michelle: My relationship with Matt.

[Narration]

[00:38:42] Ramit: Obviously this goes a lot deeper than I can tackle myself. As a kid, she saw her dad being cruel and controlling with money. She saw her mom secretly racking up debt on her Macy’s card, and then her dad and the student loans as if taken out a quarter of a million-dollar loan was not bad enough, which again, she needs to take some responsibility for.

[00:39:05] Then her dad accuses her of forging his signature on the loans. Knowing all this, it’s no surprise that Michelle is unable to be open with Matt about her finances. Money to her is inextricably clouded with negativity, and he hasn’t been pushing her to have conversations because he knows all about this family history, and he doesn’t want to upset her. So he’s walking on eggshells.

[00:39:32] I think it is critical that they put everything on the table and start to actually get real about what their expectations are. We’re going to open up their conscious spending plan right after this.

[00:39:44] Now back to the conversation.

[Interview]

[00:39:46] Ramit: I think we need to look at the numbers. So the two of you put together a CSP. Did you do it together?

[00:39:53] Michelle: No. Virtually.

[00:39:55] Ramit: What was that like?

[00:39:57] Michelle: He didn’t really say much about the obvious big debt number.

[00:40:01] Matthew: I didn’t see it before she submitted it. I saw it the day after.

[00:40:05] Michelle: I didn’t finish it until the night of, and then that’s when I told him that I finished it. And like, “Is there anything you want to talk about?”

[00:40:19] Ramit: Interesting question. Is there anything you want to talk about? What do you think you were getting at by asking that?

[00:40:26] Michelle: Do you want to ask me about the debt? I just told him about the amount that I spent on Uber Eats, which was disgusting.

[00:40:36] Ramit: So that was the number you focused on, the Uber Eats number. And then you said, do you want to ask me anything else? And what did he say?

[00:40:45] Michelle: I think he said no.

[00:40:48] Ramit: How did you both view this CSP assignment?

[00:40:53] Michelle: He said it was easy.

[00:40:55] Matthew: I thought it was, yeah, pretty simple to fill out.

[00:40:57] Ramit: So you viewed it as filling out numbers on a spreadsheet?

[00:41:00] Matthew: Yeah.

[00:41:00] Ramit: Okay. And how did you view it, Michelle?

[00:41:02] Michelle: Really hard. Difficult, embarrassing, overwhelming.

[00:41:09] Ramit: Mm-hmm. Quite typical of the way both of you treat money, right?

[00:41:13] Michelle: Yeah.

[00:41:14] Ramit: For you, it’s easy. It’s a system. It’s numbers. I have them ready to go. Black and white. Done. For you, full of shame, guilt.

[00:41:22] Michelle: Especially when I saw the debt was both of ours. And then I felt guilt that I was like, here I am putting all this debt on you. Yeah.

[00:41:32] Ramit: But neither of you really talked about it. The point of the CSP is not to get your numbers precise, down to the third decimal place. That’s irrelevant. What is it designed to do? Get you to talk about it. And in fact, notice some of the machinations behind the scenes– waiting until the last second to finish it. Then saying, is there anything you want to ask me?

[00:41:56] It’s not really how you start a substantive conversation. It’s almost like I’m going to try to skirt past this as quickly and quietly as possible. Is there anything you want to ask me? No. Okay, good. Submit. So here we are, and the two of you haven’t talked about money even still.

[00:42:19] Michelle: Yeah.

[00:42:19] Ramit: Should we talk about it now?

[00:42:21] Michelle: Yeah.

[00:42:21] Ramit: All right, let’s look. So assets are 0; investments, $47,000. Whose investments?

[00:42:32] Matthew: I put my 401k there. And then I think I may have also put what I have in a trading account.

[00:42:41] Ramit: All right. Savings, zero; and debt, $263,000. For a total net worth of negative $215,000. All right, what do y’all think about that?

[00:42:53] Matthew: It’s insane.

[00:42:55] Ramit: Did you know that, Matt?

[00:42:57] Matthew: No.

[00:42:57] Ramit: What did you think it was?

[00:43:01] Matthew: 20,000 credit card debt and maybe 100,000 student loans for her.

[00:43:05] Ramit: So almost double what you thought.

[00:43:09] Matthew: Yeah.

[00:43:11] Ramit: And seeing it, what do you feel?

[00:43:14] Matthew: Just really confused on how we’re going to get out of this. Because I don’t have debt like that, so I never had a plan for myself to get out of if I was to get into debt like that. So seeing that now, it’s just like, what do I do here, kind of thing.

[00:43:32] Ramit: What do you do here?

[00:43:34] Matthew: Yeah. Well, it should be us, but what do we do here?

[00:43:37] Ramit: What if it’s her? Any of this debt yours?

[00:43:40] Matthew: A little bit. I have maybe 20,000 student loans and then 16,000 in a car debt.

[00:43:50] Ramit: All right. So 230 of it is yours, ballpark. So the way I would look at it, even if I’m in a relationship where we are not married, I would say, how is she going to handle this debt?

[00:44:06] Matthew: Yeah.

[00:44:07] Ramit: It’s a different philosophy, right?

[00:44:09] Matthew: Yeah.

[00:44:09] Ramit: Have you ever said that to her?

[00:44:10] Matthew: Well, I didn’t know. And because we were not married, I never pictured our finances together like that yet. But since we had to do the CSP, now it’s together and just changes the way I’m seeing it and thinking about it. If we get married, do I inherit this also? If something were to happen to her, how will this get paid off? God forbid. Just basically like, how can we afford anything with that number?

[00:44:44] Ramit: Michelle, what do you think hearing that?

[00:44:48] Michelle: I never felt like it would be our debt to take care of. I always felt like it would be mine, regardless of getting married and stuff. It’s still my debt. So I never thought I would expect him to be taking care of any of it.

[00:45:06] Ramit: Okay. But what about the substance of his comment, which is, how are we going to get married if she has that much debt?

[00:45:15] Michelle: That’s what I’ve felt that he’s thought this whole time.

[00:45:19] Ramit: Instead of fearing what he might think, he thinks it, he just said it. So let’s take that fear away. Now let’s go into the substance of his question, which is a super valid question. How are we going to get married and be in a relationship if she’s bringing $230,000 of debt? What’s your take?

[00:45:39] Michelle: I don’t know.

[00:45:40] Ramit: There’s nobody else coming to save you here. I think that’s part of my goal with our conversation, is for you to recognize the reality of the situation here. Let’s continue on. Income, 15,825 a month. Now this is interesting. $9,300 is partner one. Is that you, Michelle? Okay, great. And partner two is 6,400 a month. That’s you, Matt. Okay. So quite interesting.

[00:46:14] Michelle’s making more by roughly 50% or so than Matt, and yet the numbers are profoundly different. When we look at fixed costs, Michelle, you’re paying 99% of fixed costs from your salary. Right there, that’s unsustainable. You are broke. You’re losing money every single month. Meanwhile, Matt, you’re at 53%, which is a very healthy number. I assume part of this is because you’re not paying rent.

[00:46:46] Matthew: I’m not paying rent. Yeah.

[00:46:48] Ramit: Interestingly, by the way, Matt’s not paying rent. Michelle’s paying $360 in rent. 360 is also a great deal, don’t get me wrong, but at 99%, it’s difficult to live. And if we look at why, we see a few things here. What do you notice about your numbers in the fixed costs? What stands out to you immediately?

[00:47:09] Michelle: My debt payments.

[00:47:11] Ramit: Your debt payment is $2,542 a month.

[00:47:15] Matthew: That was the most shocking part. That was the number that was left off when I was doing the CSP. When I said I was done, I logged off and let her submit it, and then that’s, I guess, the final number she had to input, and then she submitted it.

[00:47:32] Ramit: So when you looked at it, you were like, “Oh, this looks fine. It’s fine.” Look at this. If I zero out all the debt. 58%. You were like, solid. We’re good to go.

[00:47:41] Matthew: Easy.

[00:47:42] Ramit: Right. But it’s not. It’s 99%. What else do you notice, Michelle, about your fixed costs?

[00:47:49] Michelle: That I shop a lot.

[00:47:51] Ramit: Yeah. Why? We determined it already, right? What is it?

[00:47:55] Michelle: Because it’s soothing.

[00:47:58] Ramit: Yeah.

[00:47:58] Michelle: Feeling avoidant.

[00:48:01] Ramit: Yeah, exactly. Gives you a sense of control, a temporary sense of control. But now let’s look at the effects of that. So the effects are that this number here, clothes target, Amazon, miscellaneous, is $748 a month. Your debt goes up and up and up. And your debt is at $230,000.  And then how does that affect your relationship now that the two of you know about these numbers?

[00:48:33] Matthew: Just pretty confused. I just don’t know how all that adds up.

[00:48:39] Ramit: Are you confused, or are you angry?

[00:48:41] Matthew: No, I’m not angry.

[00:48:42] Ramit: Oh, can I tell you my reaction? I would be angry at my partner, who we lived together, who I asked repeatedly, “Let me look at what you’re writing,” and you said no. And now you have this much in debt. How are we ever going to come together and get married?

[00:49:03] And what’s worse isn’t even the number. What’s worse is that I don’t have a plan. I would be angry because this is not just her debt. It’s the future for the two of you. I’d love to hear you talk about money now that you have seen these numbers. I don’t even know how to start. What would you even do? How would you get out of it? What’s the plan?

[00:49:30] Michelle: Get another job.

[00:49:32] Ramit: How does this conversation feel already?

[00:49:35] Michelle: Uncomfortable.

[00:49:36] Ramit: It feels horrible to me. I’m not even in it. You’ve never really talked about money. I hear that. But the first conversation that you’re having is getting really negative, really fast. Can we change the dynamic of that?

[Narration]

[00:49:51] Ramit: I’m about to walk them through the steps of your first positive money conversation, which is an exercise that I outlined early in my new book, Money For Couples. You can pre-order Money For Couples at iwt.com/moneyforcouples. And you could get the exact words to use to have better conversations about money in your relationship. iwt.com/money for couples.

[Interview]

[00:50:18] Ramit: What would you want to feel in your first money conversation?

[00:50:22] Michelle: I’d want to feel like there’s hope, like there’s a chance that there is a way out of it.

[00:50:28] Ramit: Okay. Let’s start by each of you sharing one way that this conversation about money is going to be positive.  

[00:50:38] Michelle: I would start it by saying that I’m sorry for the past and that I want to maybe set out a payment plan or for the money I owe him first off, because I feel like that one is a huge factor on me too.

[00:50:59] Ramit: Why is this conversation going to be good?

[00:51:01] Michelle: Because I’m being honest about my numbers.

[00:51:09] Matthew: This conversation’s going to be good because we’re finally communicating about our debt.

[00:51:18] Ramit: Okay. Next, how do you each feel about money today?

[00:51:23] Michelle: I feel really bad about money today.

[00:51:26] Matthew: I feel pretty confident about money just in a sense of how to manage it and make sure you pay your bills first, and then whatever’s left over be saved.

[00:51:41] Ramit: How about the two of you? You feel bad. You feel good. Any connection about how you feel about potentially your money together?

[00:51:55] Michelle: We can come up with a plan for me to be able to get out of this so you’re more comfortable and I’m more comfortable, and we can save for our future.

[00:52:06] Matthew: I feel that it’s definitely scary to see that number. But like you said, we can create a plan and just be really disciplined with what we’re spending on. I’m not saying we can’t have fun, but really just be mindful of going to Target or needing something from Amazon, things like that.

[00:52:36] Ramit: How do you want her to feel about money?

[00:52:39] Michelle: I want to feel confident, not like I’m in jail all the time. I want to feel free.

[00:52:49] Matthew: I would agree with that. I’d want to feel like it’s not holding us back from anything.

[00:52:56] Ramit: I have to admit, I’m surprised by that last one, because right now, Michelle, you seem pretty free to me. You spend on the things you want. Where’s the jail?

[00:53:10] Michelle: The one I guess I put myself in.

[00:53:13] Ramit: Yeah. So isn’t that the worst of all worlds? You feel constrained. You’re actually just spending more than you make. You just feel bad. In a way, it seems like you almost thrive on feeling bad. You used the word dwell earlier. It’s caused me to dwell. But I think with your money, you dwell on it so much.

[00:53:34] It is not healthy to ruminate obsessively and to dwell on it for years. So when I hear you’ve made mistakes in your past, okay, fine. Everybody’s made a mistake. I’ve made mistakes. Fine. Matt says like, just make a plan. Pay off your debt. She just needs to get better with money. But it’s not just that simple. I think step one is not dwelling on what’s happened in the past, but rather looking to the future. And what about the consequences? Matt, have you ever asked her directly and said, “We need to have a candid conversation about money?”

[00:54:19] Matthew: I don’t think so. Like I said, I’ll go over, take a look at the planner, she’ll tell me, “Don’t look,” or “Stop,” and I just back off.

[00:54:28] Ramit: It feels very childlike, the whole dynamic of like, “Let me peek.” It’s like, two kids in junior high looking at each other and like, “No, don’t look.” You’re in your 30. You’re talking about potentially marriage and kids. This doesn’t make sense to me as an adult. What do you think, Matt?

[00:54:51] Matthew: She just didn’t want to tell me, and I never went through with asking more questions to avoid arguments.

[00:54:59] Ramit: Because if you argue it means what?

[00:55:03] Matthew: Just more fighting and–

[00:55:05] Michelle: We could be done.

[00:55:07] Ramit: Yeah. Maybe. It means you’re a mean person and you get enough fights from your family. So when you come to Matt’s, you’re in a safe space, but your identity is now I’m the one who doesn’t fight with her. What else is Matt’s identity as it relates to you and money?

[00:55:29] Michelle: The one that helps me.

[00:55:30] Ramit: Yeah. He gives you money. He excuses when you make a bad mistake. He enables you.

[Narration]

[00:55:40] Ramit: Based on what we heard today, you’ll notice a lot of similarities in the way that Michelle behaves with money and the way her parents behaved with money. Listen as I try to help her make that connection.

[Interview]

[00:55:52] Ramit: Can you think of anyone else in your life who shopped and ran up credit card debt?

[00:55:58] Michelle: My mom.

[00:56:00] Ramit: Any connection there?

[00:56:01] Michelle: I thought of it for a little bit because I was like, “Why did I continue it?” Because she stopped it right away.

[00:56:07] Ramit: Why did she stop it?

[00:56:08] Michelle: She didn’t have any more funds.

[00:56:10] Ramit: Okay. And who found out about it?

[00:56:13] Michelle: My dad.

[00:56:14] Ramit: And what did he do?

[00:56:16] Michelle: He paid it off and told her to cut it up.

[00:56:19] Ramit: Okay. So you don’t have that happening in your life, in part because you earn your own income, right?

[00:56:24] Michelle: Yeah.

[00:56:25] Ramit: So your mom stopped–

[00:56:28] Michelle: Because of the consequences.

[00:56:31] Ramit: What are you realizing?

[00:56:33] Michelle: I don’t have consequences. Because it’s my income. So I’m not feeling like I owe anyone anything, but I do owe.

[00:56:44] Ramit: Yeah. I’m not advocating for you to give up your income and then for you, Matt, to come in and say like, “Stop shopping at Macy’s.” That’s not what I’m saying at all. I do think you’re onto something by realizing you don’t have any consequences. Have you ever realized that before?

[00:57:00] Michelle: And for a second I touched that and I was like, “Ooh, maybe that’s me.” And then I think I ignored it.

[00:57:08] Ramit: Kind of happens a lot, don’t you think?

[00:57:09] Michelle: Yeah. I avoid.

[00:57:11] Ramit: You uncover something. It’s like you lift it up and you go, “Oh, [Bleep]. I don’t like what’s under there. Ah, I’m out of here.”

[00:57:19] Michelle: Yeah.

[00:57:20] Ramit: It’s pretty interesting, right?

[00:57:21] Michelle: Yeah.

[00:57:21] Ramit: Any reminders from the way you grew up, somebody who uncovers something they don’t like and then–

[00:57:28] Michelle: My dad.

[00:57:28] Ramit: Your dad does it. He does it a lot, right?

[00:57:31] Michelle: Yeah.

[00:57:32] Ramit: Watching you see these connections between you, your dad, and your mom, I think people can internalize this in one of two ways. One, they can be become overwhelmed and feel broken and feel, my future has already been written for me in my past, so what’s the point? Everything I do is just because my dad said something in 1988 and now like, I have no agency. I have no control. That’s one.

[00:58:05] Or two, people can say, “Oh, [Bleep].” I never made the connection between why I behave this way and what my parents modeled. Now that I know that, what do I want to do about it? What do I want my future to be? Which one would you say that you are right now?

[00:58:29] Michelle: I feel like because of all the names that my parents have called me, I let them take over who I am. So it’s like, in a way, I’m like living up to their names.

[00:58:47] Ramit: You’re never going to be good with money. Right now you’re not good with money.

[00:58:51] Michelle: Yeah.

[00:58:51] Ramit: Oh, he called you a brokie? I can’t believe that. Like you said, I cannot believe any parent ever calling their child that. And you are broke.

[00:59:01] Michelle: Yeah.

[00:59:01] Ramit: So in a way–

[00:59:02] Michelle: It manifested.

[00:59:03] Ramit: Yeah. And just out of curiosity, if you weren’t broke, if you were good with money, if you were paying your debt off steadily, do you think they would love you more or less?

[00:59:17] Michelle: I don’t know if they would love me more or less, but they would feel less useful, because I wouldn’t need to depend on them.

[00:59:25] Ramit: Right now you do, right? You live in their house. You have to ask for a ride to work. You’re totally dependent.

[00:59:32] Michelle: Yeah.

[00:59:33] Ramit: So in a way, you have taken the ball that they tossed you and said, great, I’m going to run with this. What do you think about this, Matt? It’s got to be frustrating for you, somebody who says, “I have a system. My stuff runs. What’s the problem? Let’s just knock it out.”

[00:59:47] Matthew: Yeah. It’s just a little sad, I think. She’s just not focusing on herself, and I don’t know. She makes a lot more money than me, so I don’t understand how you make all this money and it all goes to your bills.

[01:00:05] Ramit: So you say that to her?

[01:00:07] Matthew: No, I didn’t say that to her. I don’t want to upset her. I just try to avoid an argument. So I’m also an avoider, but in other ways.

[Narration]

[01:00:15] Ramit: Finally, we are getting somewhere. They’re finally talking about money. Matt is expressing his concerns, and he’s also admitting that he doesn’t talk about money because he’s also an avoider. They both are. Although Michelle is also a worrier. Challenge now will be for Michelle and Matt to adopt new money behaviors.

[01:00:36] Step one is for both of them to have a series of real conversations about money. Do they have a future together? What are their expectations? What would success look like? And this is going to be uncomfortable, but it has to be. Sometimes the only way to build a Rich Life is to walk straight through the fire. But only Michelle can get this under control. Matt can’t do it. I can’t do it. She has to do it by herself for herself.

[Interview]

[01:01:06] Ramit: Do you trust her?

[01:01:08] Matthew: If I had a safe, no. But yes, I trust her.

[01:01:12] Ramit: Trust her with money?

[01:01:14] Matthew: No, not yet.

[01:01:16] Ramit: Could you get married if you didn’t trust her with money?

[01:01:21] Matthew: I think I just need to have control of what she’s doing. And I don’t want that. I don’t want to be micromanaging what she does because she’s an adult. She should know.

[01:01:34] Ramit: So could you get married if you didn’t trust her with money?

[01:01:39] Matthew: It’d be hard, but I think I could.

[01:01:42] Michelle: I see it like, no, you shouldn’t trust me with money, and no, you shouldn’t want to get married to someone like that.

[01:01:52] Ramit: And when you say that to him, what’s the intent there? Because I don’t think it’s for him to break up with you.

[01:01:57] Michelle: No, it’s not.

[01:01:58] Ramit: I think it’s so that he reassures you. You feel scared, you articulate those fears to him. He goes, “No, it’s okay. I love you. I’m not leaving.” And you feel reassured for the moment. And so what happens is the two of you enter into this dynamic where you’re constantly worried and ruminating over your fears, and you’re reassuring, but what I haven’t heard, Matt, is you saying, “Hey, I’m actually not okay getting married to someone who’s in $230,000 of debt, and worse, not actually making a plan to pay it off. I’m not okay with that. I’m not okay with building a family when we have hundreds of thousands of dollars of debt that’s only the minimum being paid.”

[01:02:34] You work in finance. You know this. I’m not okay with that. And so because you are walking on eggshells, afraid to upset Michelle, what happens? You end up stagnant. Nobody has any consequences. Michelle, have you had any consequences for Matt about finances? No. He didn’t even know the numbers until today. And you didn’t share them with him. So the reason I’m getting a little upset here is that I see your future that you’re sleepwalking into.

[01:03:04] If both of you go, “Hey. Fine. I’m okay with $230,000 of debt. I don’t mind taking it on.” I wouldn’t personally be comfortable with that, but at least you two would affirmatively discuss it and say, this is our family approach. Right now it’s just like each of you living independent lives hoping that nothing bad happens, and you can slip by the CSP, and you can slip by getting married. What kind of life is that?

[01:03:29] Michelle: A lie.

[01:03:30] Ramit: Michelle, you went to nursing school, grades made you drop out, and then you fought back, went back into an accelerated program, graduated, and now you’re a nurse making 120K. Right? How come you got so aggressive with that?

[01:03:45] Michelle: I think I just pretty much was tired of living a comfortable life, trying to act like I was okay with everything, even though I wasn’t.

[01:04:01] Ramit: Are you okay with that right now?

[01:04:03] Michelle: No.

[01:04:04] Ramit: All right. Then tell me what you want to do.

[01:04:07] Michelle: I want to get ahead of debt.

[01:04:09] Ramit: What would it mean to you if you could pay that off?

[01:04:12] Michelle: I would feel confident in myself and value myself a lot more.

[01:04:18] Ramit: Like the way you got your nursing degree.

[01:04:20] Michelle: Yeah.

[01:04:21] Ramit: You did that. Nobody else did that. You. One of the things I love is when I meet somebody who’s really accomplishing one part of life and then their finances are a little sloppy and they never make the connection. “Oh yeah, I go to the gym all the time. I do this, I do that, but my finances are a mess.” And I help them make that connection between the two of them. And you can see them sit up a little straighter. They realize the way that I do this is the same way I can do that. So you would feel confident. You would value yourself more. What would you do with your first Rich Life goal after you paid off your debt?

[01:05:04] Matthew: I probably get a dog.

[01:05:06] Ramit: What kind of dog?

[01:05:07] Michelle: German Shepherd.

[01:05:08] Ramit: It’s a beautiful thing to have a dog who you would love and take care of that would constantly remind you of what you accomplished. Hard work. It wasn’t easy. You did it. And you get to love this dog.

[01:05:25] Michelle: I’d feel proud of myself.

[01:05:29] Ramit: So looking at your fixed costs here, and then if we just work our way down, you’re investing a lot. And of course you’re spending more than you make. So let’s just focus on the area that you can control. When you just painted the picture for me of feeling pride, of paying off your debt, of potentially getting a dog, tell me what you could do right here in these numbers.

[01:05:56] Michelle: I could cut dining out, Uber Eats.

[01:06:00] Ramit: How?

[01:06:01] Michelle: I could  give myself $100, to be realistic.

[01:06:07] Ramit: Fine. $100 per?

[01:06:08] Michelle: Month.

[01:06:09] Ramit: Uh-huh. And what about the other times you come home from late from work and you’re tired?

[01:06:13] Michelle: Just come home and make something or have it precooked.

[01:06:16] Ramit: Right there. That would save you hundreds.  What about the Target stuff?

[01:06:23] Michelle: I would also slash that to $100 too by just buying the necessities that I need.

[01:06:31] Ramit: And then what else in your environment helps or hurts your chances of achieving your Rich Life goals?

[01:06:38] Michelle: Living in my house.

[01:06:39] Ramit: Yeah. Probably can’t move out tomorrow. So what could you do to make it a better environment?

[01:06:46] Michelle: I could set a goal of hopefully when to be able to move out because that’s something to look forward to.

[01:06:55] Ramit:  Great. What else?

[01:06:57] Michelle: Stay at Matt’s some days.

[01:06:59] Ramit: I think all those things are good. I think those are all very logistical things. I am willing to bet you have never said no to your family. How could you build those skills so that you could have a better relationship with your family?

[01:07:17] Michelle: Setting boundaries.

[01:07:18] Ramit: I think that’s a really good place to spend some money, get a therapist to guide you through those difficult conversations. Right?

[01:07:27] Michelle: Yeah.

[01:07:28] Ramit: To me, when I look at the dynamic and that you’ve both wanted to get married, but you haven’t, and the safe, and all this stuff, your priorities are very clear. I see you spending a ton on eating out. I see you spending a ton on this mindless stuff at Target. I don’t see you putting money to spend in yourself. I’m talking about mental health.

[01:07:53] Because to me that’s everything. Right now, the way you talk about money, it’s shame-filled, it’s guilt-ridden. It would not change until you learn how to say no, how to set boundaries, and how to get aggressive with this. I think a lot of our conversation has been you metaphorically leaning back, saying like, I feel bad. I hate this. I made a lot of poor decisions. I just don’t know what to do.

[01:08:22] But in order to be proud of yourself, what do you have to do? You have to go from here to here. You have to say, I’m sick of this. I’m making a plan. It might make a couple of people around me uncomfortable, and I’m still going to do it. And Matt, what about you? What role would you say you’ve been playing in this relationship as it relates to money?

[01:08:47] Matthew: Not getting angry with her and enabling her with the spending.

[01:08:54] Ramit: I don’t think you have to get angry, not with her, but I do agree. You’ve been enabling. What else?

[01:09:01] Matthew: Way better communication.

[01:09:03] Ramit: Yeah. Would you be willing to marry somebody who was in this much debt and had no plan for getting out of it?

[01:09:08] Matthew: I said it would be hard. So I guess helping her stay on track with the plan.

[01:09:15] Ramit: Part of the problem is that by you being the safety net for her financially and otherwise, Michelle knows she has faced no consequences. The hardest part of this is both of you actually setting standards for yourself. And I don’t know about you guys, but if I’m thinking about a marriage, which is the most serious bond of all, I’m setting high standards.

[01:09:41] This is what I need in a partner. This is what I expect. I’m not going to pick some esoteric thing like, “I need you to do your hair this color.” That’s not what I’m talking about. I’m talking about values. I expect us to have a healthy financial relationship. I expect us to be nice to each other, not to scream at each other. This is a type of love, right? It’s loving yourself and raising the expectations for your partner and then they meet it or they don’t.

[01:10:10] Michelle: I don’t doubt my love for Matt, but I doubt my love for myself. He won’t even say like, I don’t see myself marrying her.

[01:10:18] Narration: I know he won’t say it right now, and I’m not trying to get you to say that.

[01:10:20] Michelle: Yeah. And I’m answering that for him. So in a way, it’s self-sabotaging.

[01:10:27] Ramit: It is. Yes. For me, in a relationship, if I were there with somebody who had a bunch of debt, we would be talking about it. They would be bringing it up to me. I would not be chasing them. Even though a person in debt tends to avoid it. There’s a lot of shame. I get that. I would have created a culture where they felt safe enough to talk about it, and it was expected. If you have some major health issue, it’s expected you talk about it in this relationship.

[01:10:55] We’re in intimate relationship, I need to know. If you have a financial problem, a family problem, I expect you to talk about it just as you could expect that from me. Then it would be, tell me about your plan. How are you going to deal with this? If there’s something you don’t understand, let’s talk about it. But you’re an adult, I trust you to handle this. Because this is just one of a million things that a married couple would encounter.

[01:11:22] Right now you can’t retire. You can’t buy a house. You can’t do any of that. What about your kids? Matt, you want to have kids who are going to learn that dad is giving money to mom. Mom is hiding it and shopping. Does that sound like any couple you know?

[01:11:39] Michelle: Well, my parents.

[01:11:40] Ramit: Yeah. It’s just passed down. No, you elevate the conversation to a plan because this plan is the foundation for your relationship. Without it, you’ll be in half a million dollars of debt in a few years, and there’s no escaping that. What do you guys hear as I say that?

[01:12:03] Michelle: He needs to implement consequences.

[01:12:05] Ramit: What are those consequences?

[01:12:08] Matthew: That I won’t marry her.

[01:12:10] Ramit: I would not break off a relationship with someone just because they had debt, but if they did not show that they took it seriously, I would tell them point blank, this is what I expect in a partner. This is the easiest thing we’re going to do together when we’re married. We’re going to have a lot more challenges. So I need to know that I can trust you as a partner.

[01:12:33] Matthew: That’s my fault. I never expressed that I wouldn’t marry her. So I never laid down the law.

[01:12:41] Ramit: It’s not laying down the law. It’s you respecting yourself enough to know this is what you need in your life. You’re an accomplished guy. You talked about the gym. Your numbers look solid. Everything’s within the parameters. It’s like a machine. You ever describe yourself as a machine before?

[01:12:59] Matthew: Only when I’m working.

[01:13:01] Ramit: Okay. That’s a yes.

[01:13:03] Michelle: He is, though.

[01:13:04] Ramit: But that’s one of the reasons that the two of you haven’t actually been communicating, is, Michelle, you’re operating on feelings about the past. Feelings may feel real to you, and sometimes they are valid, in with reality, sometimes not. Meanwhile, Matt lives in the plan. He has his CSP. He has his numbers. It’s so easy for him. But what the thing you both have in common is you have a relationship you both want. It’s just that no one’s actually taking the first step to say, here’s what I need in a relationship. So what do you guys want to do from here?

[01:13:43] Michelle: I need to have my goals.

[01:13:46] Ramit: Yeah. Do you know what they are?

[01:13:49] Michelle: To have a dog with Matt, to get married, to have a family, and to just be happy and debt-free.

[01:14:00] Ramit: Great. Those are big goals. How do you get there?

[01:14:04] Michelle: By paying off my debt.

[01:14:05] Ramit: Make a plan to pay off your debt. You can’t pay off your debt tomorrow. It’s going to take years. You know that. It’s fine. You have to make a plan. So you’re going to make that plan or are you going to wait for Matt to make it?

[01:14:16] Michelle: No, I’m going to make the plan.

[01:14:17] Ramit: Yes, your plan. It’s her money. She owns it. You can collaborate. You can answer questions if she has them, but you can’t take the lead. That means this whole dynamic of hiding what you’re writing in the journal, it’s got to change. So you make a plan, and I would go to my partner, and I would say, look, this is the plan I’ve come up with. This is how long it’s going to take me. Here’s what I’m going to do in order to make it happen. What do you think?

[01:14:43] Because while it is not his money, you two are in a relationship together. And then Matt, you got to be honest. If it says it’s going to take 17 years to pay off, you might say, look, that’s too long. Can you find a way to pay it off faster than that? It’s going to be hard for you because you want to solve problems for her. It’s not your job. So then you’re going to start with the plan, cutting back on this, etc. And what’s Matt going to see from that?

[01:15:11] Michelle: Results by not needing to ask him for money, and also by paying him back.

[01:15:18] Ramit: Amazing. I actually find that very inspirational. I’ve known a lot of people who were in relationships where one person had debt, felt very ashamed. But what an attractive moment if that person takes responsibility and says, you know what? I made some mistake, and I’m not going to dwell on that.

[01:15:37] Here’s my plan. Watch me. Every month. Boom. Paid off 1%. Boom. Increase that number. Boom. Got a raise. Look at that smile on Matt’s face. He’s like, “That compounding? What are you talking about?” It’s really impressive.

[01:15:53] This number is big, and it’s only getting bigger. Part of what change looks like is making rapid changes. Going from leaning back to leaning way forward and getting aggressive. Trust me, you feel so good when you start getting that momentum. And then a month from now, you should see some big changes. You’ll be amazed how fast this can change. But remember, this comes from both of you. Not one– both.

[01:16:22] Matthew: I think I may take her to a jewelry store so she can get motivated.

[Narration]

[01:16:27] Ramit: A big thank you to Michelle and Matt for sharing their story with us. I am rooting for Michelle to get aggressive with her plan so she and Matt can start to build their Rich Life together. Now let’s listen to their follow-up videos. Up first, Michelle.

[01:16:41] Michelle: My biggest takeaway was that I realized how many financial decisions and choices I have to make. I have to really just buckle down and get started on a plan, and just how much it’s actually hurting my future with Matt. Changes I’ve started are, I deleted all the Uber Eats apps. It’s been a couple days. I have not ordered any food or anything. I called my loan with Matt and all those companies, and I put them on an auto pay to make sure that they’re always paid.

[01:17:21] I also decided to give 5% of my paycheck to a fund for me and Matt that he is in charge of for now for our future. I hope it helps him see too that it’s because I’m planning a future for us, and also it helps me see that at least I have something to look forward to. I never really thought of what my long-term priorities were because of how much I felt that I was drowning in all of that. And I really thank you for opening my eyes to it. Once you see it, it’s so hard. You can’t even not look at it and have to tackle it and do something about it.

[01:18:06] Ramit: And now let’s hear from Matt.

[01:18:09] Matthew: One of my biggest takeaways from the meeting was learning about how her relationship with money has a lot of commonalities with her parents’ relationship with money. Something that I’m trying to change and is definitely be more communicative about our finances together. And then also something we haven’t done is going to a therapist together. She goes to therapy, but I don’t, and so that’s something I’d like to start, and I think it would really help us.