Episode #188: “She makes 2x but wants me to treat her” Nate and Serena return

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[00:00:06] Serena: “I don’t know” is not a good answer. Sometimes now when we talk about money, I feel like I’m stepping into a landmine. I’m making more than Nate is now, but he’s going to be making a lot more than me.

[00:00:19] Ramit: Oh, so it’s a gradation.

[00:00:22] Serena: Yeah.

[00:00:22] Ramit: So what’s number where in your mind it changes?

[00:00:26] Serena: I’ve never even thought about that, to be honest.

[00:00:28] Ramit: Because it’s not a number. It’s not a number.

[00:00:33] Serena: Even now it overwhelms me to be able to be in a place to afford nice things for myself. I came from an immigrant background. There was never enough money. Seeing the stress that money played in my parents’ relationship, I feel like it was inevitable that I would run into the same thing.

[00:00:52] Ramit: I think that if you don’t change anything you will find yourself continuing to argue and to spin about money. And it will become even more painful.

[00:01:06] Serena: I really don’t like the sound of that. I love Nate. He’s my person. We’re engaged, and I’m thrilled. So why is it so hard for me to do this?

[Narration]

[00:01:18] Ramit: I love hearing your feedback about the podcast. I know a lot of you have been asking about follow-ups. What happens to the couples that I spoke to months ago, even years ago? Well, over the next two episodes, we’re going to dive back in with one of my favorite couples, Nate and Serena.

[00:01:36] We’re going to look back on their original conversation today and then next week we will have a new follow-up with their reactions of what it was like to watch their episode. And I have to tell you one thing. This couple was amazing. They were the first brave couple to be on video. They were incredibly honest, sometimes brutally honest, and also very sweet. Let’s look back at our original conversation, which took place two years ago.

[00:02:05] Meet Nate and Serena. They’re both in their late 20s. They are engaged, and they have a fascinating perspective on money. Serena was raised the daughter of immigrants, and for most of her 20s, she felt poor living in New York City. She’s only recently gotten a higher paying job. She now makes about $80,000 a year, and she has some very strong opinions on how money should be spent in their relationship. Nate makes $45,000 a year.

[00:02:38] He’s a resident, but in a couple of years, he’s going to be a doctor. And at that point, his salary will increase dramatically. Now, the crux of the conversation today happens around different expectations. Serena thinks that money should be spent and distributed a certain way. Nate is just too busy going to work to even really want to talk about it. And now let’s get to Nate and Serena.

[Interview]

[00:03:04] Serena: Nate and I are currently planning a trip, or we’ve done most of the planning, but we’re going on a trip next month to see my family in Asia for the first time ever, not just since the pandemic. I’ve been many times, but he has not, so this is really big deal for me. And pretty much from the beginning Nate said, “I cannot afford this trip. We’re really going to have to wave a magic wand in order for this to happen.” So I ended up fronting a lot of the costs. And so now–

[00:03:42] Ramit: How much?

[00:03:44] Serena: I lent Nate about $3,000 in order to cover his portion. And I was happy to do it. I think I didn’t anticipate the stress it would cause me to have him in debt, which I know sounds weird, but I’m not the kind of person that likes to have loose ends just unaccounted for. So I think having that question mark has caused me to be a little more nervous than I usually am about money. Specifically, to answer your question in the last month, I would say the cadence of like, so when Nate start paying this off, is starting to, I think, cause some issues.

[00:04:34] Ramit: Have you said that out loud, or is that just in your head?

[00:04:37] Serena: Oh no, we’ve talked about it. It doesn’t always go well.

[00:04:40] Ramit: So who brought it up?

[00:04:43] Serena: Me. It was probably something along the lines of, I know you’re stressed about money as you usually are, and that’s okay, but it would really help me to have an idea of when and how much we can start paying this back little by.

[00:05:00] Ramit: Nate, what do you remember about that conversation where Serena said, “Hey, I know you are stressed about money. When can you start paying me back?”?

[00:05:11] Nate: That’s pretty much how it was phrased in my recollection, which obviously is undebatable on my end when my response is, “Well, I don’t know, because of all these financial factors, and I’m constantly on the cusp of paying off credit cards every month and rent, and I’m not going to know until I get paid exactly how everything’s going to balance out.”

[00:05:40] I feel like that’s unacceptable as a response and ends up becoming the case that needs an answer. When am I going to pay her back, and how much exactly? When? Which fits with her personality as someone who plans a lot. But it can lead to arguments and things like that.

[00:06:09] Ramit: What did it feel like to you when she asks you that question?

[00:06:13] Nate: Well, if it was once a month, I think it wouldn’t bother me very much at all. It’s far more than once a month.

[00:06:21] Ramit: How much?

[00:06:24] Nate: At least weekly, if not more.

[00:06:28] Serena: Yeah, I feel like weekly is about right.

[00:06:32] Ramit: And at what time of the day would this come up? Are you brushing your or what?

[00:06:37] Serena: Probably within minutes of him coming home. Yeah. I’m like, “Hey, how’s your day? Nice to see you.” Our dog will greet him by licking his face for 30 seconds straight.

[00:06:49] Nate: Ten minutes.

[00:06:50] Serena: For a long time. And then, I’ll just bring it up like, hi, there’s something I want to talk about if that’s okay. I know you still owe me some cash for our trip. Can we talk about paying me back?”

[00:07:09] Nate: Usually I respond by saying, “I need a moment. Please give me a moment.” Because it takes me a long time to switch gears after I’m coming home from work, which is my own personality and just being tired all the time.

[00:07:24] And so really after that, because this is something that probably came up less than a week ago, I default back to, “Well, the answer hasn’t changed in the past six or seven days. I still need to wait until my paycheck comes in and I know what my credit card bill’s going to be, and I’m not completely in control exactly what credit card bill is because I need to pay for gas and do all these things. And so there are these factors that do change from week to week.” So basically–

[00:08:00] Serena: But you are in control of your spending. And so I think for me, and for me, and Ramit, that is usually how it goes. And me being me, I’m like, “Things haven’t changed or ‘I don’t know’ is not a good answer.” For me, the big thing for us is like, I need to have a plan, some idea. And it could be starting three months from now, I’ll be able to give you $100 a month. That would be fine with me.

[00:08:28] I think the issue we have now is there is no plan, so I’m just very much in the dark about where and when I can expect to be paid back. And do I need this money right away? No, I do not. I’m very fortunate to say that, but I think it’s like, I don’t want the just, again, the loose end of not knowing where and what.

[00:08:55] Ramit: Because what?

[00:08:55] Serena: Because it’s stressful to me and I know it’s definitely more stressful for Nate.

[00:09:00] Ramit: Hold on. Hold on. One step at a time. What’s stressful to you?

[00:09:05] Serena: Not knowing when I’m going to get it paid back.

[00:09:08] Ramit: Why?

[00:09:11] Serena: Okay, maybe stressful is not the right word, but annoying–

[00:09:16] Ramit: Why?

[00:09:16] Serena: I think is maybe more accurate. It’s not even like, what if he just doesn’t. We slowly forget and he never pays me back. I don’t think that’s going to happen. It’s just something, and Nate hinted at this, but if there’s something like a item on a list, I want to be able to cross it off.

[00:09:44] Ramit: Mm-hmm.

[00:09:44] Serena: And so for me, even though it’s not money that I owe somebody, which if someone Venmos me, they’re getting their money within 30 seconds. I’m very good about paying people back.

[00:09:58] Ramit: Stay with me. Why is it annoying to you?

[00:10:02] Serena: It’s annoying to me because I feel like it is something where we can’t move forward until we cross that item off the list.

[00:10:15] Ramit: I see. And moving forward would mean what?

[00:10:18] Serena: I would love to get to a place where we can go out to dinner more or save up together to go on a trip where it’s not like, okay, I’m going to front this and then we’ll figure it out from there.

[00:10:29] Ramit: Can you go on a vacation right now if he owes you $3,000 for this trip?

[00:10:35] Serena: Yeah. That’s what we’re going to do, I think, but yeah.

[00:10:39] Ramit: Okay. Could you go to dinner if he owed you a bunch of money?

[00:10:43] Serena: We do obviously go out to dinner and stuff, but it is still in the back of my mind when the check comes or–

[Narration]

[00:10:52] Ramit: This is a golden moment. I’m not sure what the real issue is yet, but I can also tell that Serena doesn’t really know what the issue is either. She says, “We can’t move ahead,” but when I ask her what that actually means, she says vacations and eating out, which they’re already doing. I think in my 20s I would’ve heard this and I would’ve started smiling, and then I would’ve gone in for the kill.

[00:11:17] “Hey, you said you can’t move forward without vacations, but you’re actually already taking a vacation, so I caught you in a lie. How do you reconcile that [Bleep]? That’s so illogical.” Well, I’ve evolved a little bit. It may be the case that Serena is illogical with money, but aren’t we all illogical when it comes to money?

[00:11:39] Also, I want to understand more about why she feels she can’t move forward. That, I think, is the real issue. Why is it vacations? Is there a meaning there I don’t yet understand? Or is there some context to their relationship that I don’t yet get? Sometimes I think it’s just asking more questions and a lot of times it’s just being a little bit more empathetic.

[00:12:02] Now, I will admit, deep down, I still love the feeling of hearing someone say something and then watching them contradict themselves 30 seconds later. To me, it feels like finding treasure. When you were a kid, you loved finding a quarter in the gumball machines. I loved finding logical inconsistencies. That doesn’t change, but the way I approach it has. Let me ask Serena a little bit more.

[Interview]

[00:12:28] Ramit: Talk to me about that. So the check comes. The server puts it down in the middle of the table. What goes through your mind?

[00:12:35] Serena: I know just based on where we’re at, based on what we usually do, we usually split the check, which I’m fine with. Nate will treat me sometimes and is really generous about, “Oh, let me get you a coffee. Do you want anything?” He’s great about that, and it’s really sweet, especially as someone that is not my first way to show love in a relationship. But he’s very generous in that sense. I guess what goes through my mind is I wish Nate could treat me, but one day we’ll get to that point, but tonight might not be that point, and that’s okay.

[00:13:13] Nate: But you just said that I do treat you more often than you treat me, so that’s  interesting.

[00:13:17] Serena: No, yeah, I know.

[00:13:17] Nate: Okay.

[00:13:21] Ramit: Do you wish he treated you every time?

[00:13:28] Serena: No, but I think when the check arrives, of course, I want to feel taken care of.

[00:13:37] Ramit: So Nate, what would you say if you were more generous when that check came?

[00:13:42] Nate: But it would probably be, “Do you want me to cover this?” Would probably do it. The problem would start being if Serena would reply, “Yeah, that would be great.” I can’t really afford it.

[00:13:55] Ramit: That’s a problem.

[00:13:57] Nate: Yeah, absolutely.

[00:13:59] Ramit: That’s like someone saying to their partner, would you like to fly in that private jet? And they’re like, “Yeah, sure.”

[00:14:04] Serena: Would love to.

[00:14:05] Ramit: It’s like, “Well, I can’t actually afford that.” So that’s cool. I’m glad you want to, but we’re not going. So how can you be generous, Nate, if you can’t afford the dinner?

[00:14:17] Nate: It’s an excellent question, and certainly, I can afford on very rare occasion to split a dinner. It’s how my financial situation is currently. There’s not a lot of leeway as I alluded to earlier. It’s difficult for me to take any financial hit in any direction and still being solvent.

[00:14:41] Serena: And if you’re in the back of your mind, like, [Bleep] a brick over here, I would say– sorry, can I swear on here.

[00:14:49] Ramit: You’re invited to, welcome to.

[00:14:51] Serena: Sorry, I should have asked that first. No, but I think even if you said something, suppose the check comes and you say, “I could treat you more often and one day I’m going to, and one day like, I want to get to that place, and I really appreciate you in the meantime,” I think the acknowledgement or appreciation of splitting a check. I don’t need a trophy for doing that. That’s pretty normal. I just think acknowledging it or saying something might help. Does that make sense?

[00:15:31] Nate: Sure, yeah.

[00:15:35] Serena: Yeah. That was not–

[00:15:36] Ramit: That was a very terse response.

[00:15:39] Nate: I’m thinking my way around it a little bit.

[00:15:41] Serena: Hold on, hold on. This is a great conversation. Nate, what do think Serena is really saying right now? What is she saying?

[00:15:49] Nate: I know consciously, Serena, you really do believe these things that the man doesn’t always have to pay and stuff like this, but it does sound a little bit like with you splitting the bill a little bit of that should be– I can be more appreciative of you contributing financially to the meal for sure, but underneath that, it seems like there are some latent notions about the man paying all the time or things like that, which are themselves problematic. But I think they are there subconscious.

[00:16:30] Serena: I don’t mean to be wishy-washy. I think it’s hard, and I’ll be the first person to say that I’m, I think, trying to have my cake and eat it too.

[00:16:40] Ramit: Why don’t we just invert the whole thing and see what happens. Nate says to Serena, “Serena, it would be really nice if you would offer to pick up the check a lot more of the time because actually I can’t recall you ever offering. And by the way, you make a lot more money than I do, so don’t you think it would be fair?” Look at that big smile on Nate’s face right now. Nate’s got the biggest smile I’ve seen in the entire time.

[00:17:03] Nate: It’s a conversation that’s happened.

[00:17:04] Ramit: Well, let’s have the conversation right now. Let’s just flip the whole thing and see what happens because we can’t be wishy-washy about these really important things which are causing conflict once a week minimum. Okay, so Nate, go ahead. Take it and run. Have the conversation.

[00:17:19] Nate: So Serena, it’d be nice if you paid the check sometimes, especially because you earn a lot more than I do.

[00:17:28] Serena: I totally understand that. If I’m going to be covering us, I would just like to know beforehand. But keep in mind, just because I make more money doesn’t mean I don’t have my own student loans and bills and stuff that I pay for. So I can treat you, but I can’t treat you all the time.

[00:17:51] Nate: Right. Which isn’t really what the question is. Nobody’s asking each other to be treated all the time.

[00:17:59] Serena: No, yeah, I know. I just think just because someone makes more doesn’t mean that I have a[ Bleep] ton of disposable income still. I have a fair bit and I’m not like worrying and stressing about day-to-day stuff, but–

[00:18:17] Ramit: Can I interrupt here? I feel like this is going in a bad direction.

[00:18:21] Serena: Yeah.

[00:18:22] Ramit: Let me ask one question and then make one observation. Are you both highly intellectual?

[00:18:29] Nate: Too much.

[00:18:30] Ramit: Yeah, I’m like, “Jesus Christ.” I love a good intellectual. Listen, I have a very long academic history myself, but what I observe is that you two talk yourselves around the issue a lot. The paying the check is a financial question. Absolutely. But it’s also a deeply emotional one. Serena, you actually explicitly said the word emotional. You said, “I want this emotional–” and then you didn’t, I don’t recall, really finish the sentence. You said the phrase, “I want to be taken care of,” which is highly emotional.

[00:19:07] So on your end, when the check comes and he offers– you created this very nice script for him to say, “Hey, I’d like to you to acknowledge this and that,” all emotional. And that’s totally fine. Money is emotional. But what’s interesting is that when we flip the script and he said to you, “Hey, I would actually like for you to pick up the check sometimes,” your answer was totally intellectual. Sure, I can, but then just because I make more money doesn’t mean I don’t have more expenses. I have of this and that. And what he’s really looking for is? What?

[00:19:38] Serena: Emotion.

[00:19:39] Ramit: Yes.

[00:19:41] Serena: Hmm. Sorry, baby.

[00:19:43] Ramit: Try to answer it this time, but meet him where he is and you’re not off the hook either. I’m coming back to you in just a second.

[00:19:50] Nate: I know. I’m aware.

[00:19:52] Ramit: Okay.

[00:19:52] Serena: So Nate asks me, “You make more than me. I would love it if you covered this check.” This is going against my nature, just so everyone knows.

[00:20:03] Ramit: What nature is that? What nature is that this is going against?

[00:20:09] Serena: I said it before. I like being treated. I don’t need to be treated all the time, but it is the vast minority of the time that I treat him.

[00:20:21] Ramit: Okay.

[00:20:22] Serena: I’m just saying, it feels weird. Feels a little weird. But let’s say we’re doing it, I think I–

[00:20:35] Ramit: Look at the difficulty in even saying this in a fake role play. This is amazing.

[00:20:39] Serena: Does this happen with other couples or are we just–

[00:20:42] Ramit: Yes.

[00:20:42] Serena: Okay.

[00:20:43] Ramit: And what I want you to access here is that you– you even just said it. You said, “This is going against my nature.” What we do in these conversations is we examine our very nature and where did it come from? Because the way that the two of you see money, treat money, talk about money, is deeply influenced by your culture, gender, socioeconomic background, but it’s not necessarily about the spreadsheet.

[00:21:08] And that’s what we have to grapple with. So in this artificial role play, which nobody’s going to hold you to, he asks you and says, “Hey, I’d like for you to pay more. One, it would be nice because you rarely do it. And two, you actually make a lot more money than me.” Go ahead and respond.

[00:21:28] Serena: Okay. I will treat you this time.

[00:21:33] Ramit: Why did you say that? Why did you say this time like that? Tell me. Think really hard. Why did you say that?

[00:21:44] Serena: Do you want to know also? I think just because I don’t want to make it a habit, and I know that’s really mean to say.

[00:21:58] Ramit: You don’t want to make it a habit because?

[00:22:02] Serena: Because I don’t want to pay for both of us all the time.

[00:22:06] Ramit: Can I just say that nobody’s expecting you to pay for both of you all the time? Fair enough?

[00:22:11] Serena: Yeah.

[00:22:12] Ramit: Let’s take that off the table. All right.

[00:22:14] Serena: This is so hard for me. My heart is pounding right now.

[00:22:20] Ramit: I know. I like watching the difficulty. This is quite cognitively taxing. And where do you feel it when you’re feeling what you’re feeling right now?

[00:22:32] Serena: It’s in my chest. Right here.

[00:22:35] Ramit: And I love Nate. He’s my person. We’re engaged, and I’m thrilled, so why is it so hard for me to do this?

[00:22:45] Ramit: Yeah.

[Narration]

[00:22:47] Ramit: That was one of my favorite moments on this entire podcast so far. Let’s lay out what’s going on here. Serena and Nate love each other. They really do. I can see it watching them, and if you’re watching this on YouTube, you can see for yourself as well. Serena makes more money than Nate.

[00:23:05] Nate pays for dinner more often than Serena. Serena says she wishes she felt taken care of, and she understands that Nate can’t afford to always pick up the check. Now, she suggests a very lengthy script he can use to acknowledge that maybe right now he can’t afford it, but hopefully at some point in the future he will, etc., etc.

[00:23:27] She wants him to acknowledge that while they are splitting the check. And when I ask them to invert the concept or flip the script, Nate asks Serena to pick up the check every so often because she rarely does, and she makes more money. And suddenly Serena responds by saying, “Well, I can’t always pick it up. I also have a lot of other expenses.”

[00:23:49] And when I urge her to try to meet Nate where he is, it’s excruciating for her to even voice the words, “I will pay for the check.” When I ask her why it’s so difficult to say that, she herself doesn’t know. Her heart is pounding. She says, “Nate is my person. I love him. Why is this so hard?”

[00:24:13] To me, this is such a beautiful example of how money, invisible scripts, culture, gender, and communication all roll up into the way we feel about money and the way we treat money, including how we treat money with our loved ones. Serena is struggling, but you would also be if I asked you to do something you’ve literally never, ever done in your life.

[Interview]

[00:24:39] Ramit: So let’s try it again. 

[00:24:41] Serena: Okay.

[00:24:43] Ramit: When he says what he says, what is he really saying to you?

[00:24:50] Serena: He’s saying he wants to be taken care of, just like I want to be taken care.

[00:24:53] Ramit: Yes, yes. Okay. Meet him where he is when you respond to him. He’s your person.

[00:25:04] Serena: I would love to treat you this time. [Bleep], I did it again. What is wrong with me? 

00:25:09] Ramit: It’s okay.

00:25:10] Serena: No. Okay.

[00:25:10] Ramit: Take as much time as we need.

[00:25:12] Serena: No. Then we’ll do it all night. I would love to treat you. It would make me really happy because I know that you are generous to me in many ways, and so it’d be my pleasure to pay for you.

[00:25:28] Ramit: Wow. That was fantastic. Nate, what did that feel like to receive?

[00:25:33] Nate: I felt excellent. It was really nice. Yeah, it feels difficult a lot of times to even ask her to pay, just in the sense that I don’t necessarily always think the framing comes with it and that’s the response I’m going to get. And so a lot of times, yeah, it just feels easier to split it or pick it up myself, but it feels nice to hear.

[00:26:02] Ramit: Yeah.

[00:26:02] Serena: Once I got there, it actually felt kind of nice to say, and I’m not [Bleep] you guys here.

[00:26:09] Ramit: Yeah.

[00:26:09] Nate: Stay there.

[00:26:13] Ramit: I like seeing you, Serena, build a bridge to Nate and connect on a different level than you’ve connected before. I would be willing to bet that the two of you have had these intellectual conversations where you spin over and over and just get nowhere. But just that moment with the heart pounding and having to pull yourself back two times from saying, “this time,” that’s a real breakthrough. Hearing yourself come to that realization, what do you realize?

[00:26:47] Serena: That it’s really okay to maybe be more generous than I am and to say it’s okay for me to pay for both of us sometimes. And I think also part of, I think what goes into my mind is like, if I pay for this nice dinner, if I pay for our bar tab, Nate doesn’t even care. I think seeing his reaction now, shows me that I think it’s a gesture that would actually go quite a long way with him, which is something I filled in for myself without thinking of what it would actually mean to him.

[Narration]

[00:27:31] Ramit: Big insight here. I’m extremely impressed with Serena. And everyone, take note of how she pointed out that she had assumed Nate wouldn’t even care. But now that they finally talked about it, she realized he actually would. What is something in your relationship that you assume your partner won’t care about, but you’ve never actually offered it?

[Interview]

[00:27:51] Ramit: I’d like to talk, Nate, about your financial situation, because that’s been looming in this conversation. You’ve mentioned a couple of things. You’ve mentioned that you come home tired at different times. You’ve mentioned that you don’t have a lot of money right now and that you would like for that to change. Tell me a little bit about the training that you’re currently in, how much you’re making right now, and what might change in the future.

[00:28:16] Nate: So I am a doctor. I graduated from medical school a couple of years ago, and I’m currently in training to become a specialist in a fairly lucrative field compared to most fields. I’m in my second year of four.

[00:28:34] Ramit: How much are you making now, and how much will you make after you’re done?

[00:28:38] Nate: So I’m making about $45,000 now, but after residency, I’m not going into academics or anything. So to make a salary of, say, $300,000 is probably not unrealistic.

[00:29:10] Ramit: I like talking to doctors. As you can tell from looking at me, I have a lot of doctors in my family. I’m the black sheep because I don’t have a MD. Also– 

[00:29:21] Nate: [Inaudible].

[00:29:22] Ramit: Thank you. Thank you. So you’re going to make 300k in two and a half years. Right now you make 45. And I assume that is where a lot of this financial stress comes from.

[00:29:33] Nate: Absolutely.

[00:29:34] Ramit: Yeah. I want to make sure people understand that residents really face a very, very challenging financial situation in the short term. A lot of them just go into debt. A lot of them just cannot go out. You can’t just be like, “Meet me at a bar on a Friday night.” They’re like, “I literally have no money.”

[00:29:54] And you’re like, “But you’re a doctor. How can that be?” And they’re like, “I don’t want to explain this for the 50th time.” But after a few years, that all changes. Even with your heavy debt– what do you have $450,000 of debt, something like that?

[00:30:09] Nate: Yeah. About half a mil.

[00:30:10] Ramit: Okay. So even with that, you still make a lot of money. And in general, if you’re smart, it’ll all work out great.

[Narration]

[00:30:17] Ramit: The key lesson here is that a high salary solves many financial problems. Yes, yes, I know you’ve probably been taught the opposite by a bunch of finger wagging naysaying financial experts who always say things like, “It’s not what you make. It’s what you keep.” Then they pull out a copy of the Millionaire Next Door, blow the dust off of it, and they say, “Read this.”

[00:30:40] And yes, it’s true. There are people who make a lot of money and they spend it all. I’ve talked to some of them on this very podcast. But there are a lot more people who make low salaries and are in financial trouble. If you have the ability to make a high salary, that solves many financial problems. With a high salary, you can afford to pay off debt rapidly. You can save more, and you can invest aggressively. 

[00:31:07] That’s why when he says he has about a half million dollars in debt, I just shrug. All right, fine. If Nate’s smart with his money, he can pay that off without it even being a huge burden at all. So I have little patience for people who spend their lives agonizing over 3-dollar questions like the price of dessert, because I know most of us should be spending time talking about 30,000-dollar questions. Or in the case of your salary, it can be a 3-million-dollar question over the course of your lifetime.

[00:31:37] If you want to increase your earnings, you have a couple of great. First, identify what your dream job is, build a network that will help you land that job over all your competitors, and then build the skills of interviewing and negotiating your salary. I’ve taught thousands of people how to do that, which is why so many of them get 5,000-dollar raises, 10,000, even 80,000-dollar raises. 

[00:32:02] I added a link to the Dream Job Program in today’s show notes. The second way you can increase your income is to build a side income, and you can do that by finding a side business idea, a profitable one, and then build a product or service. I’ve helped thousands of people start businesses in over 50 industries, including fitness, food, pets, cooking, and a lot more. I’ve included a link to my Earnable program in the show notes if you want to start a side business as well.

[Interview]

[00:32:33] Serena: I spent the bulk of my 20s being super broke in New York as super broke 20-somethings in New York tend to do straight out of college. And so I think where this shows up in our relationship is like, wow, I’m finally in this place where I’m not super broke, and I actually can afford to be like, “Hey, yeah, I’ll meet you for drinks. Let me know where.” Or, “Hey, let’s go out to dinner.”

[00:32:55] I feel like dressing up, going out, not cooking, whatever. And so I’m in that phase, but Nate’s not. And so that’s where the issues come up. I think it feels a bit like a cruel joke because it’s like, wow, I’m finally in this place where I can more or less afford to go out and not sweat it so much or at all. But I’m not going to just table for one. I could. It’d be very European, I guess, but I want to do these things with my person, obviously.

[00:33:33] Ramit: And Nate, what does it feel like to you?

[00:33:35] Nate: Frankly, it just feels a little bit stressful because she does want to go out on weekends and the question becomes whether I start a potential argument or something about, well, I can’t really do that. And more often than not, frankly, I just go along with it and it just worsens the financial burden.

[00:34:03] Ramit: And when you say it makes the situation worse when you just go along with it, so you all go out, you go to dinner or drinks or whatever, and then– am I reading this correctly? Two thirds of the time, Nate, you offer to pick it up, but from your finances you can’t really afford it. Is that how it plays out?

[00:34:20] Nate: Yeah. Usually offered a split and then she’ll say, “Oh, do you mind getting it?” And that conversation will essentially be like, “Well, I’ll be unhappy if we split, but if you get it, it’ll be fine.” And again, as we discussed earlier, I think that put it in a different light and hopefully that’ll change.

[00:34:38] But a lot of times, yeah, I do end up just putting my card down and saying, okay, right now, whatever. I’ll talk to you about this later, which I do sometimes to try and even things up.

[00:34:53] Ramit: What’s that conversation like when you bring up money with Serena?

[00:34:58] Nate: More often than not, it’s, “I looked at my bank account, and I really can’t afford this. Could you please help me out?” Often asking for like a split, but settling for anything even if–

[00:35:15] Ramit: What does that feel like to [Inaudible]?

[00:35:16] Nate: I don’t know. It feels like I have to grovel to my significant other for a little bit of help.

[00:35:22] Serena: You’re making me sound so mean.

[00:35:25] Nate: You’re not mean. You’re just comfortable. And it’s hard for you to understand that I’m not–

[00:35:32] Serena: I don’t want this to be a stressor. I think it’s like, I want you to feel comfortable saying that. I don’t want you to just put your card down because it’s like putting a Band-Aid over the situation, but not really getting to the bottom of it.

[00:35:45] Ramit: Well, that’s why we’re here, right?

[00:35:46] Serena: Yeah.

[00:35:47] Ramit: We’re here to get to the bottom of it. But it is an interesting reaction, Serena, that I asked him, “What does it feel like?” And his response was, “It feels like I’m groveling.” It’s very honest. Quite a haunting response.

[00:36:00] Serena: Yeah. I appreciate the honesty.

[00:36:02] Ramit: I do too. And then you jumped in, and what did you say?

[00:36:06] Serena: You’re making me sound so mean.

[00:36:08] Ramit: Right. And what were we talking about when you jumped in?

[00:36:13] Serena: Splitting the check afterwards.

[00:36:17] Ramit: No. We were talking about what he feels like having to come to you and ask for financial help.

[00:36:23] Serena: Yes.

[00:36:24] Ramit: I think what I’m hearing is there’s a lot of emotion in this relationship that is being ignored, a lot from both sides. But Nate is really saying– the word groveling, that’s not a word you want to hear your partner say in any scenario. Doesn’t matter if they’re earning $0. They should not be groveling the other partner for anything. So when my partner says groveling, what should my reaction be?

[00:36:54] Serena: My reaction?

[00:36:55] Ramit: Yeah. What should your reaction be when your partner says groveling?

[00:36:58] Serena: No groveling allowed.

[Narration]

[00:37:00] Ramit: God damn, I thought I was harsh, but Serena is absolutely savage. I can imagine my kids one day coming home and saying, “We got an A minus.” And then I say, “Sit down.” And I lecture them for three hours about their heritage and academic excellence and how if they don’t shape up, they’re going to end up in a gutter. That’s going to happen. But if Serena’s kids came home and said the same thing, she would literally just point at the door and say, “No roof for you tonight. Find your own food, you pathetic losers.” Man. Serena, I am inspired.

[Interview]

[00:37:33] Serena: No groveling allowed.

[00:37:35] Ramit: No, that’s not the– I’m thinking if I heard my partner saying, “Gosh, I feel like I have to grovel to Ramit.” I’m like–

[00:37:44] Serena: You don’t have to grovel. Yeah.

[00:37:46] Ramit: No, that’s not it either. I’m not going to tell them, “You don’t have to grovel” My response is, “Oh my God, I didn’t realize that you felt you have to grovel. Why do you feel that way? And what can I do so that you don’t have to feel that way.” It’s different, right?

[00:38:06] Serena: Yeah. One is focused on the other person and the other one’s focused on me.

[00:38:11] Ramit: Yeah, yeah, yeah. Part of being generous is looking at your partner, right? So when Nate’s over here and he’s hearing that you want– the check part, it’s not only about the money. It’s also about feeling connected, feeling taken care of for you. He’s hearing that, and we’re going to get to that. But what are you hearing about Nate?

[00:38:36] Serena: I’m hearing that it’s causing him stress to even consider splitting or asking me to cover.

[00:38:44] Ramit: Yeah, yeah. Or coming back to you after being like, “Hey, I have no money.” That’s horrible.

[00:38:49] Serena: No, it can’t be a good feeling at all and–

[00:38:54] Ramit: Keep going.

[00:38:58] Serena: I guess I didn’t realize that it was affecting you on that level. Obviously, I can pragmatically understand that not having enough money to go buy something or go somewhere is not good and it probably doesn’t feel very nice. But I guess I underestimated the toll it was taking on you and how it was playing into also how you communicate with me, not just within your own brain, but also just with me as your partner. I think enjoying the dinner or him making the reservation, those are all things that play into my feeling of being taken care of.

[00:39:51] Ramit: Love it. Love it. There we go. That’s awesome. So by identifying the feeling you want, and then we can start to say, “Well, what does that mean?” Sometimes being taken care of can be having someone pay for it, but it can also be planning it, making reservations, all that. There’s so many things besides money.

[00:40:07] Okay, now we’re talking. I love seeing the two of you build these bridges, and I’m certain that this is opening up a whole different level of being able to communicate for you. I just want to say it is totally normal for so many of the couples that I speak to not have this type of communication.

[00:40:25] I didn’t even have it with my own wife. We had to go talk to somebody so that we could get new tools so that we could communicate about money. So I appreciate you both playing ball. We are definitely getting somewhere. Do you both feel that way too?

[00:40:40] Serena: Yeah.

[00:40:40] Nate: Absolutely.

[00:40:41] Serena: This so cheesy, but I just want to run over and give you a hug right now.

[00:40:47] Ramit: Are you talking to him or me?

[00:40:48] Serena: Oh, both of you, guys.

[00:40:49] Ramit: Go. Go give him a hug. You guys can give each other a hug. You’re next door to each other. Go ahead.

[00:40:53] Nate: Okay. I’m taking a hug break.

[00:40:54] Ramit: Go ahead. This is amazing. So they’re both getting up. He’s going into her room. She’s got the dog in her hand.

[00:41:03] Serena: Wait. Oh my God.

[00:41:04] Ramit: The dog just disappeared from frame.

[00:41:06] Serena: He’s going to be angry at me.

[00:41:08] Ramit: Wait, do this on camera. Hey, I want to see this. I’m like the leering dude watching this couple give each other a hug. If it doesn’t happen on camera, it doesn’t– what a nice hug. Look at that. I love that. That is beautiful. You guys are too cute. Oh, she’s got to get her mic on, or her headphones. One sec.

[00:41:33] Nate: She’s too cute. I just dabble.

[Narration]

[00:41:38] Ramit: This is the first time I’ve ever seen this happening on this podcast. It’s the first time I’ve ever seen a couple get up and hug each other in the middle of an episode. You guys have to watch this. Now, we’re going to talk about their numbers, and as we go through the numbers, I want you to know a little bit about Serena’s numbers. Serena has no assets. She has $20,000 invested. Now let’s talk about Serena and Nate’s numbers. Serena has about $20,000 invested, $10,000 saved, and $81,000 in student loans.

[Interview]

[00:42:14] Ramit: All right. So your total net worth, negative $51,000. Okay. How do you feel about that?

[00:42:21] Serena: Not great.

[00:42:23] Ramit: Mm-hmm.

[00:42:24] Serena: A lot of people my age have student loan debt. I have more than average. My parents didn’t have anything saved for me to go to college.

[00:42:35] Ramit: Do you know when your debt will be paid off?

[00:42:37] Serena: I refinanced earlier this year, and I think I’m on like a 10-year plan. 

[00:42:42] Ramit: You’re 29, so that debt will be paid off by the time you’re 39. 

[00:42:45] Serena: Yeah.

[00:42:45] Ramit: Okay, fine. Nate, walk me through your numbers.

[00:42:51] Nate: So technically I have two cars at this point.

[00:42:52] Ramit: What kind of cars?

[00:42:53] Nate: A Hyundai and a Honda Civic.

[00:42:58] Ramit: My man. We can be best friends. Great cars. Great choices. I have no comments. No comments. All right. Moving along, your investments.

[00:43:09] Nate: I might have more than this, but I think I have over $1,000, give or take, in a Roth IRA and about 200 in stocks, bonds, generic stuff.

[00:43:24] Ramit: Okay, so 1200 bucks. And your debt?

[00:43:27] Nate: $450,000. Estimated.

[00:43:30] Ramit: Okay. What’s the interest rate on that?

[00:43:32] Nate: No idea.

[00:43:33] Ramit: Really?

[00:43:35] Nate: Zero idea. I haven’t been accruing interest because of the pause on repayment and– yeah, I don’t know. But essentially–

[00:43:49] Ramit: Serena, you didn’t suggest to Nate like,” Hey, have you made a plan for your student loan debt or anything?” Surprises me.

[00:43:57] Serena: I don’t really think we’ve talked about it. It’s the thing where I’ll be the first to say this is maybe irresponsible, but I feel like it’s almost something that I don’t even see worth talking about until he is making more money.

[00:44:12] Ramit: Yeah, that’s fair.

[00:44:12] Serena: To a point where it’s like he can’t even really make a significant dent in it. So it’s something I’m voluntarily not worrying.

[00:44:21] Ramit: Nate, your net worth is negative $432,800. How do you feel about that number?

[00:44:26] Nate: Mission accomplished. Yeah, pretty terrible, obviously. 

[00:44:32] Ramit: Why is it terrible?

[00:44:35] Nate: It’s just a lot of debt. It’s a lot, a lot of debt. And that’s almost exclusively medical school. I think maybe $27,000 of that is undergraduate.

[00:44:47] Ramit: Okay. I don’t care about the numbers. I care about how you feel about it. You feel, “terrible.” Is that really how you feel?

[00:44:56] Nate: It’s one of those things where I’ve ran a bunch of different numbers and I’ve contemplated my way through it and essentially came to the realization that during residency to put money in a Roth IRA ended up being more return than paying down minimally this debt that was still accruing interest. So in addition, a lot of jobs offer–

[00:45:26] Ramit: Wait, I’m not talking about your investment strategies. I’m talking about how do you feel about $400,000 of debt?

[00:45:33] Nate: I don’t think about it. I don’t think about it right now.

[00:45:35] Ramit: That’s more honest. Do you notice that when I ask how you feel, you often go into the tactical.

[00:45:41] Nate: Well, the tactical is why I don’t think about it, because I’ve thought about it and it’s out of the way for now. I can’t do anything about it. I have other more pressing financial concerns at this point.

[Narration]

[00:45:54] Ramit: Did you catch that? He did it again. A lot of men genuinely do not know how to answer a question about feelings. We see this as a recurring point on this podcast. Honestly, I know I didn’t. If someone had asked me at age 19 how I felt about something, I would’ve answered back, starting by saying, I think…

[00:46:18] In my culture, and to a large extent with men, we were not taught how to connect with our feelings. We were not even taught how to talk about them. And that’s really what you hear Nate doing. What’s interesting is that earlier he did open up. He really opened up when he said, I feel like I have to grovel to Serena about money. So we know that he has feelings. Of course, he has feelings. And we know that he can articulate them, but it’s challenging to get him to connect with them and say them out loud.

[Interview]

[00:46:53] Ramit: I guess what I’m saying, beyond the debt number, is the emotional part of your relationship, both of you with money, is super important and it’s super neglected. To not have ever used the word groveling until just now when the two of you have been together for a long time, that’s an issue. And to not have been able to connect on generosity before, that’s an issue.

[00:47:18] So I don’t doubt that the two of you can come up with a really good debt payoff plan. You two are very smart. I have no doubt about that. But the area of opportunity is to be able to communicate about money and be honest about your feelings. And I would challenge the two of you to steer away from your natural tendency, which is talking, talking, talking, the cerebral.

[00:47:43] All right. So let me tell you what I see when I see these numbers. What do you think I think of these numbers, negative 51,000, negative 432,00?

[00:47:52] Serena: You’re probably like, “Holy [Bleep], these people are really chill for how bad their financial situation is.” But it’s like, well, he’s a future doctor. She’s probably just– I don’t know. I went through many years of my life, again, where I was like struggling to make rent and student loan payments and all of that. And I very recently, like within the past like four months have been like, “Okay, I can pay more than a minimum now.”

[00:48:21] I’ve cried on the phone with student loan provider here, and I’d just like rather not do that anymore. You can see like my take home and everything. So I have extra cash at the end of the day, and we’ll go into that later, but I guess that was a long-winded way of saying I don’t think our situation is great.

[00:48:48] Ramit: I think that when I look at just the net worth part and knowing your ages, for you, Serena, I think, oh, 80k at 29. That’s really good. I bet you she recently got promoted and started making more money. Is that true?

[00:49:09] Serena: Yeah.

[00:49:10] Ramit: Yeah, yeah. And I can tell that. You see numbers, and I see a lifetime of decisions. And I could tell that because your income is relatively high compared to how much you have saved or invested. But that also tells me that, gosh, the fact that you’ve put that much away in probably what’s a very short time is very impressive at 29. And so yeah, you have 80k of debt, but you can pay that off. You know your debt payoff date. That’s impressive. Less than 5% of people know that.

[00:49:45] Serena: What?

[00:49:46] Ramit: Yeah. Do you know 90% of people don’t even know how much debt they owe? And 95% of people do not know their debt payoff date. I talked to a lot of people. Now, as for you, Nate, if I were in your position, I would be super chill about this. Let me explain why. If I were in your position, but I had my knowledge of compound interest and income and stuff like that, this is how I would explain it. 

[00:50:15]I’d be like, “Yeah, I have a [Bleep] load of debt right now, but in a few years I’m going to pay it off aggressively and then I’m going to invest a ton. So I feel super comfortable with my decision. I did it eyes wide open. And yeah, times are pretty tough right now. I know that. I could barely afford a cocktail. But I know that that’s going to change in a few years. 

[00:50:35] “And I know that being partnered with Serena, we’re going to do more than we can even imagine together.” That’s how I would look at it. Now, saying what I said to both of you, your short term is really tough. There’s no doubt about that. But can I just point this out? If you describe your net worth as terrible, and I asked you twice and you were like, “Yeah, terrible.” You weren’t kidding. It’s going to be very difficult for you to feel good about money.

[00:51:07] Nate: Mm-hmm.

[00:51:08] Ramit: Our language really reveals a lot about us. And if you say, “Oh, I feel terrible about it. This is horrible.” Then you’re going to interpret every decision as terrible. And by the way, it’s not going to change when you have a million dollars in the bank. You’re still going to feel terrible.

[00:51:24] Or you can say, “Yeah, I made a calculated bet. I know my specialty. It’s going to make 300k conservatively. And I’m a frugal guy. I don’t need a fancy car, Hyundai, blah, blah, blah. I’m going to be fine. We’re going to be better than fine.” That is just a totally different set of lenses to put on and look at the world through. Serena, how much do you make per year?

[00:51:47] Serena: I make 80k before taxes.

[00:51:51] Ramit: Okay, cool. And Nate, what about you? You make 45?

[00:51:54] Nate: Yeah.

[00:51:55] Ramit: All right. Fine. So 80k plus 45. All right. That’s pretty good income together, but you don’t combine your incomes. So let’s talk about your expenses. This is where I’m very interested. All right. We’re using the conscious spending plan, four categories. Let’s start with fixed costs. So your rent or mortgage is how much?

[00:52:20] Serena: It’s 1,260 combined. I pay a little bit more than half.

[00:52:36] Ramit: Huh? No, it’s not.

[00:52:25] Nate: No. It’s 2,560 total.

[00:52:29] Serena: Damn it. I’m terrible at math.

[00:52:31] Nate: Yes.

[00:52:33] Serena: It’s 2,560, so I pay a little more than half just because I make more. Nate pays 1,200 to my 1,360.

[00:52:41] Ramit: How’d you come up with those numbers? I know this was a juicy conversation. Don’t lie to me.

[00:52:48] Nate: Oh yeah. Oh yeah. It was a negotiation.

[00:52:50] Ramit: Okay. Tell me. I got to hear this.

[00:52:53] Nate: So rent prices as well as everything in the last year have skyrocketed where we lived. Last year we were paying the same. We were both paying about $1,000 each per month. And this year our rent went up almost 30%. And so I could not really afford to split the rent at all.

[00:53:19] And so on the other hand, Serena really wanted to stay in the area that we’re in. She really liked the area. I love the area too. Don’t get me wrong. But as opposed to moving elsewhere where there would’ve been slightly cheaper rent, but maybe not that substantial. 

[00:53:44] So she wanted to stay in the area, and the rent was too much for me to afford. So basically it took a long time of me saying, “I can’t really afford this. Can we balance this a little bit in a direction based on what we make?”

[00:54:01] Ramit: Let me make sure I understand. So you were each paying $1,000. Your rent went up. That made it very difficult for you, Nate, to afford it. Serena, you wanted to stay in this particular area, so you had a back and forth and you concluded with Serena, you’re paying a little bit more, like $160 more month for this apartment.

[00:54:22] Serena: Yeah.

[00:54:23] Ramit: Okay. All right. What do you both think about how you are splitting your rent?

[00:54:30] Serena: At first I was not thrilled at the prospect of spending more when we’re both splitting the apartment. But thinking about it, now I’m completely fine with it, and it’s totally normal. I don’t mind at all. And Nate is correct. It was 100% I didn’t want to move. I didn’t want to leave the area.

[00:54:57] Ramit: Is that why you offered to pay the extra 160 a month?

[00:55:00] Serena: I didn’t offer. It was something that Nate proposed and then after some back and forth that I was like, “Okay, I see where you’re coming from.”

[00:55:10] Ramit: Mm-hmm.

[00:55:10] Serena: I’m okay paying $160 extra.

[00:55:15] Ramit: Okay.

[00:55:15] Serena: Because it was more me that was wanting to stay here. And I make more, so I understood.

[00:55:25] Ramit: How much more do you make than Nate?

[00:55:28] Serena: I would say significantly more.

[00:55:31] Ramit: Hmm.

[00:55:34] Nate: I initially thought that it would be a good idea to basically take the net incomes and base it on that. But on the other hand, that would’ve put all of the increased rent on her shoulders. And essentially, as part of the discussion, I decided that it would feel unfair. And I understood from her perspective how that would feel unfair. And so I definitely, at some point– like I said, we arrived at whatever numbers we arrived at, which is about 160 more on her part. And I just took the w and ended the conversation.

[00:56:23] Ramit: I like that you take the win. That’s a philosophy of mine. Take the win. But I find it’s being used in a very peculiar way in this relationship. Like, that’s not the win I want you to take. Okay. Let me point out a few numbers. Again, these numbers just look like numbers to you, but to me, they tell a very rich story. So your fixed costs together represent 78% of your take home pay. Now, in my conscious spending plan, do you know the number that I recommend?

[00:56:55] Nate: 50 to 60, right?

[00:56:56] Ramit: Yes. What’s that smile, Serena?

[00:57:01] Serena: I was like, “I don’t know.” I was going to guess 40 to 50, but I was like, whatever it is, that’s significantly lower than what our current combined is.

[00:57:09] Ramit: Yeah. Nate, your fixed cost represent 97% of your take home pay. How can that be?

[00:57:18] Nate: Well, I spend about $600-ish on gas, give or take, every month.

[00:57:27] Ramit: You live far away. You have to drive. Is there anything you can do about it?

[00:57:30] Nate: No. I bought a Honda Civic, which gets slightly better miles to the gallon, but–

[00:57:38] Ramit: That’s a car regardless. And the two of you don’t want to move closer to work?

[00:57:45] Nate: It will be happening after this year for essentially details that have to do with my scheduling, with my program, and a bunch of nitty gritty stuff.

[00:57:53] Ramit: So you’re going to cut back on gas expense next year?

[00:57:56] Nate: Oh yeah. And also, I have housing provided for me for six months next year.

[00:58:01] Ramit: Great. All right. Can I just say, Nate, you’re making way less than Serena, and you’re paying essentially 50-50. That’s the problem. That’s the reason that when you go out to dinner– the two seem totally unconnected, don’t they? The amount you pay for your apartment and then going out to dinner and all this drama happening around the check coming, but it’s actually directly connected.

[00:58:33] Nate, you are spending too much for your portion of housing and therefore you have nothing left over. No wiggle room. You can’t even give Serena a straight answer on when you can pay her back $50 a month, and that’s causing stress. Do you see how it all rolls back to one thing that is seemingly invisible in your finances? 

[00:59:58] Nate: Yeah.

[00:59:59] Ramit: It’s this. So Serena, let’s say that my wife and I were dating and I was like, “Hey, move in with me, and I make like twice as much as you, but we should split it 50-50.” What would you say to that?

[00:59:18] Serena: I don’t think I would love it if it were me.

[00:59:24] Ramit: Okay. Would you love it if it were Nate?

[00:59:27] Serena: No.

[00:59:29] Ramit: Okay, good. Okay, great. So we could meet there. I think that the most successful couples I see, especially in situations like this where you have separate incomes, etc., is proportional. So proportional means if you’re making 65% of the income, you pay 65% of the joint expenses. And that would probably suggest that you pay more for rent and that Nate pay less. How would you feel about that?

[01:00:01] Serena: It’s like talking about the check. I think it would be really hard for me at first just because it’s not something I’ve done ever before and not something I even would’ve considered.

[01:00:17] Ramit: Yeah. Let me ask you this before you go on.

[01:00:19] Serena: Yeah.

[01:00:21] Ramit: Let’s just fast forward three years and Nate’s making 300, 325k. How much should he pay for the rent?

[Narration]

[01:00:32] Ramit: Okay. Forget everything I said earlier about how I’ve grown up and matured, and now I don’t try to expose logical inconsistencies, and instead I just ask nicer questions. Forget all that. I heard this. I had to go in for the kill.

[Interview]

[01:00:46] Ramit: Let’s just fast forward like three years and Nate’s making 300, 325k. How much should he pay for the rent?

[01:00:55] Serena: Yeah. This is something we’ve talked about. I would be super weirded out if we expected be to pay 50-50 for rent.

[01:01:04] Ramit: Wait, what are you talking about? You make more right now and you’re paying 50-50 basically.

[01:01:08] Serena: I know, but I’m not making–

[01:01:10] Ramit: That’s a double standard.

[01:01:11] Serena: I know, but I’m not making that much– I’m making more than Nate is now, but he’s going to be making a lot more than me.

[01:01:20] Ramit: Oh, so it’s a gradation.

[01:01:22] Serena: Yeah.

[01:01:22] Ramit: So what’s number where in your mind it changes?

[01:01:26] Serena: I’ve never even thought about that, to be honest.

[01:01:28] Ramit: Because it’s not a number. It’s not a number.

[01:01:33] Serena: Yeah.

[01:01:35] Ramit: I know you’re about to spend five minutes intellectualizing it, and we’re going round and round. It’s not a number. If you made $200,000 right now, Serena, do you think you would be proactively going to Nate and saying, “I should pay quadruple what you pay for our rent?”

[01:01:56] Serena: Proactively, probably not.

[01:02:00] Ramit: I love the honesty. I love it. This is the thing that’s going to allow the two of you to connect about money. And Serena, if we can keep on this path for a second, why not proactively? What would stop you from doing that?

[01:02:16] Serena: I think if we sat down and had a conversation or if Nate brought it up to me, then I think we would get to that place where it’s proportional to what we’re making. But I think it wouldn’t be my first inclination to do that.

[01:02:30] Ramit: Because?

[01:02:31] Serena: Because I think a little bit is probably societal, a little bit is probably selfish, where it’s like, I have this money. I want to be able to choose what I spend it on. I want to go do fun stuff.

[01:02:54] Nate: I think I know something.

[01:02:55] Ramit: One second, one second. Please let me finish this. Keep going, Serena.

[01:02:58] Serena: It just wouldn’t come to mind at first just because I can very easily battle off other things that are also important to me about how I spend my money.

[01:03:07] Ramit: Your 401k, your investments, your travel, family, gifts, all of those things.

[01:03:13] Serena: For sure.

[01:03:14] Ramit: You can always find something to of money towards. I have to ask you this. Who’s your person?

[01:03:25] Serena: Nate.

[01:03:26] Ramit: Mm-hmm. And of all those things, shouldn’t Nate be up there somewhere?

[01:03:33] Serena: Yeah. I don’t think I’ve ever really thought of Nate as, okay, this is someone that is a very important part of my life, if not the most important. But the way I spend my money doesn’t really reflect that, and I think it’s because I’ve never really thought of money as emotional. For me I think money has always been transactional.

[01:04:01] Ramit: That’s amazing. Think about it now. Now that you have this new lens. It’s almost like you took off the glasses you’re wearing, which were transactional, and you put on this red pair of glasses, and they’re emotional. And now that you have this set of lenses on, take a look back at some of the things we talked about, the fact that Nate comes home and within 15 minutes you’re asking him those questions. With the emotional lenses on, what do you now see about that scenario?

[01:04:34] Serena: I see him coming home in his scrubs looking really cute, saying that I miss him. Maybe offering to pour him a glass of wine, talking about our day, and ahead of time deciding on when is like a neutral time for us to talk about just more serious things in our relationship, whether it’s money or just something else that’s affecting us. But I think when he comes home from work is not that time.

[01:05:06] Ramit: Because it’s about more than just your need to check the box. Although that’s very important. You want to do it. We should find a way to do that. Absolutely. But the message of money communicates more than just numbers. Can I just point out that the two of you are soon going to make at least $380,000 together?

[01:05:28] Serena: Yeah. I can’t even process that.

[01:05:30] Nate: Same, honestly.

[01:05:31] Serena: You might as well be saying you’re going to make like 380 monopoly moneys together.

[01:05:36] Ramit: Well, should we talk about that? Because the fact that you can’t process it doesn’t mean it’s not going to happen. And the fact that you both have compartmentalized that very large top 5% income earners away is allowing you to fight over tiny questions about dinner out. So can the two of you have a conversation? Can you actually just sit with the concept that you’re both together going to be making almost $400,000 a year in less than three years?

[01:06:18] Serena: Okay. I don’t know what we would do with all of that money, to be honest. We don’t, and it feels like it would be happening [Inaudible] us.

[01:06:31] Nate: Yeah. Honestly, I filled out the same form with the future earning or whatever, and it basically was, I guess I’m paying a lot more towards my debt and savings. That’s part of it. I don’t know what it means. I don’t know. It’s literally six to 10 times more than I’ve ever made in my life, and it’s going to literally happen in the space of like one month. I’ve grappled with it and thought about it, and it’s just so foreign to me.

[01:07:16] Ramit: Serena, what’s going to change? If nothing changes in terms of the way that two of you communicate about money, behave, treat money, four years from now, what’s going to happen?

[01:07:27] Serena: It’s hard for me to think like granularly. I think like four years from now it would be really awesome to get to a place where talking about money, thinking about money would be a source of potential, like, what can we do with this money? Versus right now when we talk about it, it’s hard to not be stressed about it.

[01:07:53] Ramit: You think you’ll stop the stress the minute that he starts getting those 30,000-dollar a month paychecks?

[01:07:58] Serena: Not the minute I think we’ll be closer to it.

[01:08:04] Ramit: I think the stress go down. That’s for sure. I think it’ll be easier to sign a check at dinner. Rent will be no question.

[01:08:11] Nate: I don’t think the conversations will increase. I think what would happen is the stress would go down and so for us needing to have conversations about it would go down, but then we probably just wouldn’t have any conversations because it’s probably fine. But then that might start affecting the more longer term goals that we both have.

[01:08:33] Serena: Yeah.

[01:08:34] Nate: Feels like it might– sorry.

[01:08:35] Serena: I think there’s always going to be something too. Today it might be rent, or it might be splitting a check. But if we bring life into this world, that’s a whole other thing that is very much not on our radar right now.

[01:08:52] Ramit: Yeah.

[01:08:53] Serena: So there’s always going to be–

[01:08:55] Ramit: Yeah. Private or pubic school, renovation, vacation, should we pay for our family do X, Y, Z? Those are big decisions. I think that making five times what you’re making or whatever that number is, it’s going to be a lot more, that’s going to definitely reduce a lot of the day-to-day stress. Questions like, when are you going to pay me back? It’s going to be gone.

[01:09:16] Serena: Yeah.

[01:09:17] Ramit: Questions like, who’s paying for dinner? Mm, once you combine your finances, I think that question will go away because you can just use joint credit card. So that’s irrelevant. But I think that if you don’t change anything that you will find yourself continuing to argue and to spin about money, and it will become even more painful because one of you will say, “Why are we fighting about money? We make $400,000 a year. How can we still be fighting about money?” And you’re not going to know why you’re still fighting.

[01:10:00] Serena: I really don’t like the sound of that.

[01:10:03] Ramit: Do you believe that that’s possible?

[01:10:05] Serena: I think it’s definitely possible. I would like to know how to get ahead of it and avoid that fork in the road though.

[01:10:14] Ramit: Yeah. I want to show you how to do that, but I wanted to set the stage for the fact that just making more money does not solve your money problem. It’s a really common misconception. Basically, everybody thinks if I made $10,000 more or $25,000 more, if I had $100,000 in the bank, all my problems would vanish.

[01:10:37] And then they make it and they’re like, “Oh [Bleep], I’m still unhappy. I still worry about money all the time. My partner and I still fight.” And the point is you need to work on two things. One is improving your tactical financial situation so that your conscious spending plan is all dialed in. The second part is the money psychology. How do about money? What is our Rich Life? And that part is often neglected

[01:11:04] Let me just tell you what do if it were me, knowing what I know about money and I’m making 380k household income with all that debt. Oh my God. I would [Bleep] crush it. I would a debt payoff plan depending on my interest rate. I would invest the max of every account I could possibly do because I know in my early 30s, just three or four years of super aggressive investing, talking about 50, 60, 70, 80k in a year would make me multi-millionaire. Make us multi-millionaires, just those first few years.

[01:11:40] Next, I would definitely increase my lifestyle spent. Let me say that again because a lot of people, they go, “The hedonic treadmill. [Bleep] the hedonic treadmill.” I go, “[Bleep] you.” The hedonic treadmill is real, and we should accept it. If you’re making $380,000, you’re still living the same way you lived when you were making 45,000 as a resident, you [Bleep] up somewhere bad. You should go out to eat out more. 

[01:12:02] You should take a nice trip. You should buy a new pair of shoes, do a few things, but within reason. That’s what the conscious spending plan, guilt-free spending categories for. Because you got your percentages, it all flows. When you were making 45k and your guilt-free spending was 20 to 35%, you weren’t spending that much. It was probably below 20% because you’re really frugal. Cool. When you’re making $300,000 or 380,000 household income, that 20 to 35% is quite sizable. 

[01:12:35] Now, you could do it all with that kind of income. You have some choices to make. But that is how I would do it. I would stay in a small apartment. I would not go out and buy a house first day. I would keep the cars that I’ve got. I would invest super aggressively for three or four years. And by the way, during that time, I don’t know about your income, Nate, if it’s going to go up, but I bet your income will, Serena. 

[01:12:58] And so you’re starting from a place of aggressive investment and then slowly over time, maybe you have children, maybe you decide, okay, I want to cool it a bit on the investing. We’re investing super aggressively. I would like to be able to take a couple of more trips. That’s a great discussion to have. That’s just me. I’m not saying you have to do it, but that’s what I would do. And I would absolutely dominate my finances if I had 380k household income like you two.

[Narration]

[01:13:23] Ramit: God damn, that’s how you make money exciting. I talk about taking the win on this podcast, but I’m about to take the win for myself. I just eviscerated the hedonic treadmill losers. I laid out a sensible spending plan, including eating out and traveling. I offered two options for debt payoff, including based on interest rates, and an extremely aggressive investment plan to become a multimillionaire. Some dudes get excited about sports. I get excited about how to spend your newfound income, which just quadrupled overnight. You just learned something.

[Interview]

[01:13:55] Ramit: So based on a quick calculation, Serena, you make 65% of your joint income. And Nate, you currently make 35% of your total income. You’re essentially splitting the apartment like 55-45.

[01:14:15] Serena: Yeah.

[01:14:17] Ramit: How would you like to decide what to do for this apartment? Serena, why don’t you take the lead?

[01:14:24] Serena: You said 65-35 income split?

[01:14:29] Ramit: Mm-hmm.

[01:14:30] Serena: I guess closer to 60-40 now sounds it makes perfect sense.

[01:14:41] Ramit: Okay. And why? Why 60-40?

[01:14:48] Serena: This is the first time we’ve outlined our fixed costs, our everything, first time looking at it on a spreadsheet. And so based on these numbers, I’m paying I guess 66% of my income, so I guess two-thirds goes fixed cost. But if Nate is doing 97, seems [Bleep] up now.

[01:15:14] Ramit: That’s cool of you to say. Nate, how does that feel to hear?

[01:15:20] Nate: It’s going to take some time to set in. Been contending with this a little while– long while. No, it’s nice to hear, to recognized that. I literally can’t afford these things as I’ve been pigeonholed into spending.

[01:15:46] Serena: And another thing that I’m–

[01:15:47] Nate: Recognition is nice.

[01:15:48] Serena: That it’s in relief now is, in let’s say less than five years, it’s almost a given that Nate’s going to be paying more than 55% of our mortgage or rent. And so something I’ve like worked on separately in therapy– millennial women love to talk about therapy and I’m one of them– is there are times in a relationship where one partner’s going to meet the other person more and vice versa.

[01:16:24] And I think now I’m seeing like, maybe this is that period of our life, and it’s hard to see it with objectivity when we’re currently living in the year 2022, etc. But I think now I’m seeing maybe this is that moment where Nate’s going to need me to carry the weight a little bit more than I have been.

[01:16:48] Ramit: Nate?

[01:16:52] Nate: Really appreciate that. I really thank you for thinking that. It means a lot. I know I keep saying that, but I feel like I’ve been struggling with this.

[01:17:10] Serena: I don’t want you to struggle. And I think–

[01:17:12] Ramit: Hold on, Serena. Let him finish for a second.

[01:17:16] Nate: Yeah. I’ve just been struggling with feeling like– I obviously can’t pay for things for you as much as I would like to buy you dinner and my share of the rent being 90 whatever percent. But I just can’t right now. And as much as I want to, it’s logistically impossible. And so I really appreciate hearing a recognition that where I am right now isn’t, and where we are right now isn’t where we’re going to be forever.

[01:18:00] Ramit: It’s really nice. It’s really nice to hear, Serena, you connecting your work with your therapist with your situation that you’re in with Nate right now. And Nate, it’s really nice to hear when she bounced that ball over to you, for you to really receive that and acknowledge what she said. That is a really beautiful way of talking about money. I just loved watching that.

[01:18:26] Serena, I totally agree with you. I think this is one of those times, I think it’s been one of those times. I think Nate may have been looking for the words to say it, but talking about money is really hard, and so on both ends it comes out in peculiar ways. When he comes home from work and you ask him, like, when are you going to start the debt payoff? I know you’re not trying to badger him, but deep down you want control. And this is that one thing in your life that you don’t have an answer to, and that doesn’t feel good. 

[01:19:01] And Nate, you know that now. And she’s even explicitly said, “Oh yeah.” At the same time, when Nate talks about the check. It’s not really about the check. It’s about something much bigger. I don’t want to have to come to you and beg for money because I don’t have $50 for gas. That doesn’t feel good. And also, things are going to totally change.

[01:19:26] If we can’t get through this right now, what are we going to do? Are we just going to paper it over with a lot more money? That doesn’t feel good. So I love that we’re at this moment where we can– and I love that you reached out to me and that you’re also getting help from a therapist and whatever other sources. I love it.

[01:19:44] Because you’re in such a beautiful position to be able to get your process right, and then when the money comes in, and it will come in, to be able to have all the money flow through this beautiful process and beautiful way of communicating together. How are you both feeling right now?

[01:19:59] Serena: I’m feel feeling really good. At the beginning, I said I wanted to feel like I had the tools to talk about money in a less judgmental way, in a less hurtful way, in a less selfish way. And I’m feeling it. I’m feeling like we’re finally getting there a little bit. And I have to admit, I was perhaps a little confident going into this conversation. I guess I didn’t think it’d be this hard, and I didn’t expect to have a breakthrough like we did at all. And I didn’t anticipate how foreign it felt for me to get to that place.

[01:20:40] Ramit: I feel very seen, actually, which is nice. I think it’s been really interesting to put these things in sort of a different context. I think that really helps.

[01:20:49] Serena: I almost want to go out on the town and make you my sugar-baby right now.

[01:20:54] Nate: No complaints here.

[01:20:58] Ramit: I love that. All jokes aside, you paying for your partner who’s in his residency does not make him your sugar-baby.

[01:21:07] Serena: I know.

[01:21:09] Ramit: Just so we catch that. But I love the way the two of you are connecting, and I like the smiles. That’s what I want. So I’m really, really happy to watch the two of you grapple with these conversations. They’re tough. It’s not easy. And every minute we spend on this right now will save you years of heartache down the road. It’s not about dinner and it’s not about the check. It’s about how the two of you talk about money and love together.

[01:21:39] Serena: The way I see it is it’s only going to get better from here. And that feels really good to say.

[Narration]

[01:21:47] Ramit: Be sure to come back next week to hear what Nate and Serena have been up to in the two years since this conversation. You’re going to hear what it was like for them to watch this episode, what it was like to read the comments, and where they are now. And you will not want to miss it.

[01:22:06] One favor to ask. Make sure you get a copy of my book. It’s out right now. Money for Couples. It helps my team, and it certainly helps me a lot. If you’ve enjoyed this podcast, if you want to know how to connect with your partner about money, and if, most important of all you, want to design a Rich Life so you can use your money to live it, this book’s going to help you. It is out now.