258. “We had $900K. Now we’re $100K in debt”

Ramit Sethi of I Will Teach You To Be Rich talks to Kristina and Erin, a married couple who have been together for 10 years, raising two children in Toronto. They make good money, but they have no system for their finances, which has led to years of avoidance. They've accumulated $106K in debt and have only two weeks of savings. While Erin, the "stable one," has a full-time job, Kristina’s entrepreneurial journey has been marked by wildly inconsistent income, including a $50K loss on NFTs. They both admit they don’t trust each other or themselves with money. Ramit helps them confront their fears, redefine their relationship with money, and finally start working as a team.

In this episode we uncover:

• How Kristina lost $50K in NFTs
• Why Erin struggles with "spending with emotion"
• The cultural component of their Catholic guilt around money
• How their childhood experiences influence their money habits
• Kristina's fear that her income won't last
• The surprising truth about their combined income
• Why they avoid tracking their spending
• Their identity as "coach collectors" who avoid real change
• Ramit's "60-second truth-telling" exercise
• Why they need to be aligned as partners to achieve their goals
• The true cost of credit card debt
• Why their "guilt-free" spending is holding them back
• Ramit's radical advice on cutting fixed costs
• How they can quickly pay off their debt

 

Chapters:

(00:00:00) Introduction

(00:02:40) Feeling stupid about money

(00:05:23) Unspoken financial conversations

(00:08:44) Fear that money won't last

(00:09:25) Lack of trust around money

(00:15:16) Emotional spending and guilt

(00:22:52) The impact of high fixed costs

(00:27:00) "We work too hard to feel like we don’t have anything"

(00:30:45) Why past coaching failed

(00:34:54) Childhood money lessons and scarcity

(00:49:30) Goals for debt and savings

(00:54:30) Ramit's 60-second truth-telling

(00:58:33) Fixing the Conscious Spending Plan

(01:07:07) Aligning on a Rich Life together

(01:17:35) How Kristina and Erin are going to get on the same page

(01:21:40) Why they're afraid to talk about money with their kids

 

This episode is brought to you by:

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Have you or your partner fallen for a scam? Maybe gotten bad financial advice from someone who didn't keep their promises? If so, I want to talk. Apply to be on my podcast at https://iwt.com/apply

 

Transcript:

[00:00:00] Mikaela: It gets to me. Sometimes I feel like I need a break.

[00:00:03] Dave: I don't want you to feel that way. I really don't.

[00:00:06] Ramit: Aren't you guys pretty rich?

[00:00:08] Dave: Yes.

[00:00:08] Mikaela: Yeah, we have money, but both of us have a hard time with just spending,

[00:00:14] Dave: it's probably a bit of like hoarder's mentality. We don't spend it and we don't really have a plan to spend it.

[00:00:21] Mikaela: I'm scared that blink of an eye we're 65, 70. We never did anything with some money. The kids are good, but did we enjoy life?

[00:00:30] Dave: We're stuck in where we are 'cause we're not sure what tomorrow Looks like

[00:00:34] Ramit: the skills that you have developed have calcified into focusing on numbers and logistics versus like actually having fun.

[00:00:41] Mikaela: I get in the details of our family. Dave gets on the details of like the price and sorting all of that out.

[00:00:49] Ramit: Who's getting on the details of the two of you having a rich life?

[00:00:52] Dave: Neither one of us have focused on it.

[00:00:54] Mikaela: There's gotta be more than just being happy that we're not struggling.

[00:01:00] Ramit: Sometimes on this show, I like to show you what happens when people earn high incomes, but they struggle to spend their money, and I always see the comments.

[00:01:09] Ramit: People sometimes complain about these couples. They say they're unrelatable, but I want you to know that this is an extremely important topic to cover, and it's important for you because if you follow my system, you will likely have more money than you ever thought possible. I want you to learn from these types of couples who are still stuck in scarcity mode so that you can make changes.

[00:01:34] Ramit: Now, in my opinion, it is a tragedy to live a smaller life than you have to, and I am determined for that not to happen to you. Today I'm talking to Michaela and Dave. They're 33 and 32 years old. They have two young children and they earn $278,000 a year. That's a great income for any age, but especially impressive for someone's early thirties.

[00:01:58] Ramit: Why do they struggle to spend money so much so that Mikayla wears clothing with holes in it because she can't bring herself to spend money? That's what I wanna talk about today. And remember, I want you to apply the lessons to your own life. In fact, I think as you go through today's episode, you're gonna be surprised at their reasons for being frugal.

[00:02:19] Ramit: So make sure you stick around. Now I'm looking at their conscious spending plan or their CS P. If you want my help with your conscious spending plan, join my money coaching program at iwt.com/money. Coaching assets, $545,000. Investments, $1,032,000 savings, $106,000 debt, 195,000, which is their mortgage, total net worth, $1.488 million.

[00:02:47] Ramit: They have a net worth of nearly $1.5 million in their early thirties. Now, if this were you, what would you be doing with your money? Ask yourself that. And ask yourself why McKayla might be wearing clothes with holes still in them. Let's get into it, beginning with our conversation now. Help me understand a little bit about your day-to-day spending behaviors.

[00:03:11] Ramit: Like what is something that you wanted to spend on or sort to talk about spending on, but you just couldn't bring yourself to do it? I'm not gonna judge you, I promise. Go ahead.

[00:03:21] Mikaela: Just workout leggings, like my leggings have holes in them, uh, in the knees and from just years of use and even trying to buy new leggings.

[00:03:31] Mikaela: I couldn't do it until there was a sale.

[00:03:34] Ramit: This is an amazing example. First of all, are those leggings in the room that you're in right

[00:03:39] Mikaela: now? I'm wearing them right now.

[00:03:40] Ramit: Can we see?

[00:03:41] Mikaela: Okay.

[00:03:42] Ramit: Okay. She's standing up. I'm gonna describe what I'm seeing. Okay. She come closer to the camera. This is amazing. It's actually quite a modest hole.

[00:03:51] Ramit: It's like the size of a hole puncher, and it's directly in the middle of her kneecap. It's like somebody punched a hole. Did your little 4-year-old punch a hole with a hole puncher in that?

[00:04:00] Mikaela: Who knows at this point it might have been a pinch from him.

[00:04:04] Ramit: I have so many questions. Uh, how long have you had those leggings for?

[00:04:07] Mikaela: Probably four years. This

[00:04:09] Ramit: is amazing. I couldn't script this. I love my life. So one day you said like, Hmm, I'm gonna get some leggings. Walk me through that. What happened?

[00:04:19] Mikaela: Yeah, it's just like a mental to-do list. Like, ugh, add it to the list, I guess. Mm-hmm. And then I'm like, do I really wanna spend that?

[00:04:27] Ramit: Oh, and how much are we talking about?

[00:04:29] Mikaela: 55, 60 $5.

[00:04:31] Ramit: Why don't you just wait till the whole thing freaking tears apart. Why not

[00:04:35] Mikaela: that ordeal?

[00:04:37] Ramit: And how much did you get these beautiful leggings for this time?

[00:04:40] Mikaela: I think like half off.

[00:04:42] Ramit: Wow.

[00:04:42] Mikaela: 25. Wow. So 25 bucks. And hopefully it'll last me another four years.

[00:04:48] Ramit: Uh, this is amazing, Dave. Care to comment. What are your thoughts?

[00:04:51] Dave: I am probably worse with clothes. Um. But if you were to say the item, it's actually this chair that I'm sitting in.

[00:04:58] Ramit: What, what that chair looks like. Batman's chair. What are we talking about?

[00:05:02] Dave: Uh, it's a, I work from home, so it chair that I sit in all the time. It's grown very uncomfortable on my back tight.

[00:05:09] Dave: My hips aren't sitting well into it and just, I've had it for, I don't know, four years and I don't know if it's purchased or more. So I have to make it, make the value stretch, but I won't go buy another a hundred dollars, $150 chair or splurge and get one that I'll sit in every day.

[00:05:26] Ramit: All of this is a bit at odds with your own financial situation?

[00:05:30] Ramit: Mm-hmm. Would that be fair to say? Very.

[00:05:32] Mikaela: Yeah.

[00:05:33] Ramit: Yes. You wanna spend more? My first question is what's stopping you?

[00:05:37] Mikaela: I feel like just the unknown of the future and the expenses that could come with that.

[00:05:42] Ramit: Dave, what about you?

[00:05:43] Dave: It's probably a bit of like hoarder's mentality, just. Planning and over planning for retirement, what could be in the future?

[00:05:52] Ramit: You like that?

[00:05:53] Dave: Yes. I enjoy it. I enjoy it. Uh, looking at like investment vehicles and those kind of pieces, but at the same time I recognize the opportunity cost of what we could be doing, you know, what we could do to enjoy now versus what I'm older and can't move the same way.

[00:06:07] Ramit: Probably a good sign that someone might be a hoarder is when they're talking about saving too much money.

[00:06:12] Ramit: They use the word opportunity cost, like I think we're on to something here. I think I get it. Mikayla, do you also enjoy planning for the future?

[00:06:21] Mikaela: Yes, but not even like the future a year from now. Like, I can't think of like the next two to five years. It's more so like jumping to our kids or in college we're retired and even that is still kind of fuzzy.

[00:06:39] Mikaela: It's the idea more so than like concrete details in place.

[00:06:43] Ramit: Is it the idea or the feeling?

[00:06:45] Mikaela: The idea more so just because I don't know what the feeling would be. Not working so hard for what we have.

[00:06:53] Ramit: Oh, right. Uh, meaning it's supposed to be hard. Yeah. We are supposed to work hard.

[00:07:00] Mikaela: Mm-hmm.

[00:07:00] Ramit: If we didn't work, what would we be?

[00:07:04] Ramit: What would we be?

[00:07:05] Mikaela: Yeah.

[00:07:06] Dave: Purpose. Yeah. Purpose and drive.

[00:07:09] Ramit: Aren't you guys pretty rich? Uh,

[00:07:10] Mikaela: I'd

[00:07:11] Dave: say so.

[00:07:12] Mikaela: Yes. Yeah.

[00:07:13] Ramit: Wow. Talk about a uncomfortable reaction. Let's try that again. Maybe we can get into slowmo. Aren't you guys pretty rich? Yes.

[00:07:22] Mikaela: Yes. We have money. But you don't, I feel like anything could happen at any point, and that's what scares me.

[00:07:30] Ramit: Well, I understand that you've had some recent life events that have really shaped some of your pivotal views on money. Would you be comfortable sharing a little bit about that?

[00:07:40] Dave: Um, yeah. I'll, I'll share some. Um, we kind of talked about a little bit of a. Uh, lack of purpose. I've always been very drawn to work and purpose-driven work.

[00:07:50] Dave: Um, and I think a lot of that along with, uh, surgery, procedure, medications, put me into a, a bit of a mental spiral. It's an overwhelming place, um, like time, not driven to work. Time, not driven to purpose. So, um,

[00:08:06] Ramit: do you mean, can I read between the lines? Do you mean that you have always been driven, you've always been, uh, your identity has been part of work.

[00:08:16] Ramit: When you were sick, you couldn't do that, and it made you question like, what is my purpose?

[00:08:21] Dave: Yeah.

[00:08:23] Ramit: Okay.

[00:08:23] Dave: I would almost say not working, drove. The sickness and lack of doing things. I'm always doing something. I'm always analyzing and optimizing. Did I make the right choice? Were these the right three variables to pull on?

[00:08:34] Dave: Those kind of pieces that always happen since, since McKayla and I met and even long before, I've always been very active. I don't relax, rebook those things.

[00:08:43] Ramit: Alright, that's quite interesting.

[00:08:44] Mikaela: He was in the hospital for a week and had some heart issues and it was scary. Just for the age that we are.

[00:08:53] Ramit: Yeah, that is scary.

[00:08:55] Mikaela: And that was just very sudden. So it was just a lot of doctor appointments and trying to get him healthy again to like just get back to our normal day today. So it was just like a shock. I was five months postpartum. So the stress of new baby and, yeah.

[00:09:16] Ramit: That's scary. That's scary on so many fronts.

[00:09:18] Mikaela: Mm-hmm.

[00:09:19] Dave: Heart rate dropped below, very below normals mental state, not. Up to what it was. Wow. And it was ultimately hospitalized for a week as we worked through this. And then even coming back, for me it was a bit of a confidence drain. Totally.

[00:09:35] Ramit: Yeah.

[00:09:35] Dave: Uh, e especially when we're working so hard financially, but also for the family and where we want to go.

[00:09:40] Dave: It's a bit of a, it felt like a large step back and for us to kind of reset 'em

[00:09:45] Ramit: a step back from where we What do you mean by that?

[00:09:48] Dave: Just it felt like we had, we had direction where we wanted to go financially, where we were going, kind of as, as a family. But being in that situation mentally and physically, it felt like, okay, there's this focus on, now I'm saying out loud, it's, it's the focus on the here and now and the hate we build from here rather than super focused into the future.

[00:10:08] Ramit: Thank you for sharing that. Um, I really appreciate that. Dave and Mickayla, what about you? Um, I understand there was a, uh, illness in your family as well.

[00:10:17] Mikaela: When I found out that I was like three months pregnant. Um, my mom was diagnosed with stage four cancer, so yeah.

[00:10:28] Ramit: I'm sorry to hear that.

[00:10:29] Mikaela: We don't have a timeline 'cause it's just a rare cancer, so it's slow growing, which is good.

[00:10:37] Mikaela: Kind of bad 'cause you're just living with the pain for so long. Yeah. Um, but also tying into Dave's, uh, hospitalization earlier this year and just like the unknown of that, it just like really freaked me out on top of everything. 'cause just like another person getting sick, she's the only person that is still alive and my immediate family.

[00:10:59] Mikaela: So it all falls on me to make sure that she gets taken care of.

[00:11:05] Ramit: How is she feeling day to day now?

[00:11:08] Mikaela: Uh, good and bad days.

[00:11:10] Ramit: Yeah.

[00:11:10] Mikaela: Yeah. I'd say like 60 40, like 60% of the month she. Can move, walk around and stuff. But 40%, she has really rough days, so,

[00:11:21] Ramit: yeah. I'm sorry to hear that. I'm really sorry. How have the two of you reacted to Dave, your health scare and Mikayla, your mom's illness?

[00:11:30] Ramit: Her cancer,

[00:11:32] Dave: we've kind of been frozen. Um, at least for what I would say is we've kind of been frozen and we're not sure what happens next. We know something's going to happen, but we don't know, like time is the most elusive and yet most valuable thing we have. It's, it's, we're stuck in where we are 'cause we're not sure what tomorrow looks like.

[00:11:51] Dave: And I think for a lot of reasons that's impacted a little bit of, you know, strain and stress on what we do, where we do it, how we do, who we communicate with. Uh, but also, you know, what we do with our money, what do we spend it on? Knowing that there could be other bills that were, you know, potentially gonna have to look after her mom or for me with doctor's appointments or just with the family, you know, more check-ins, et cetera.

[00:12:12] Ramit: What about for you, Michaela?

[00:12:14] Mikaela: Yeah. Uh, a lot of stress on the foreseeable future. Like I know my mom lives three and a half hours away right now, but, uh, we talked about a month ago, and her plan is to move closer to us mm-hmm. Within the next year, just because we will need her close to be able to take care of her when things decline more.

[00:12:37] Dave: Mm-hmm.

[00:12:37] Mikaela: So right now we aren't paying anything for her. However, she did not save or do anything really to set herself up to retire regardless of this illness. So we know in due time that we will definitely have to pitch into support. Some sort of lifestyle, whether that's the higher rent around our area for her or doctor's appointments, transportation, et cetera.

[00:13:05] Mikaela: So it's just the stress of the unknown bills and budgeting that and how do you live your life and enjoy it, versus staying strapped and making sure that you're financially still saving for the future, but paying for these things in the now, I think.

[00:13:24] Ramit: W Will your role in her care be her primary caretaker?

[00:13:28] Mikaela: Yes.

[00:13:29] Ramit: Okay.

[00:13:29] Mikaela: Probably while working full-time, I mean, we'll definitely when we get to that point, when the health declines, I assume we will need like a nurse that comes around to make sure that she is getting the care she needs.

[00:13:46] Ramit: Dave, what about your health? How are you now?

[00:13:49] Dave: Uh, progress. I

[00:13:51] Ramit: wouldn't

[00:13:51] Dave: say, yeah, feel more confident, feeling better, but also still kinda recognizing that I have a long journey.

[00:13:57] Dave: Okay. And respecting my own health and keeping up with it.

[00:14:01] Ramit: Long journey. Okay. Got it. Got it. Um, day-to-day basis, are you able to work? Are you able to, you're able to be mobile?

[00:14:08] Dave: Yeah. Yeah.

[00:14:09] Okay.

[00:14:09] Ramit: Okay,

[00:14:09] Dave: good. Yeah. Day to day. Day to day's really no change. It's more of the, yeah, just foresight, doctor's visits and continued checkups.

[00:14:15] Dave: Even, uh, I'll, I'll even expand and say even last two weeks went to the dermatologist because I have a cyst and they're saying maybe it's cancerous, maybe not. So it adds to a little bit of the stress and

[00:14:24] Ramit: yeah,

[00:14:25] Dave: I'm trying not to worry about it until we find out versus worrying about what could be so, but I think it just compounds to everything.

[00:14:31] Mikaela: And of course I'm stressing about that on top of, it's just like another health scare that it's like, you've gotta be kidding me.

[00:14:41] Ramit: I wanna stop here for a second. Because Dave was hospitalized in his early thirties. Mikayla's mom has a stage four cancer diagnosis delivered while Mikala was five months postpartum, and now on top of everything, there's another potential he scare for Dave.

[00:14:58] Ramit: Any one of these things is difficult. All of them combined compounding. It is devastating. It's almost incomprehensible what they've been through. When I was at Stanford, I took a class on trauma and disasters, and I remember this example that I had also studied in my social psychology coursework, and that was how people take their cues from other people around them.

[00:15:22] Ramit: There was a study where they have people eating in a restaurant and smoke starts filling the room and people are sitting there not moving. And guess what other people do? They just keep eating at a certain point, the smoke is so thick you can't even see your own hands, and people are still eating their food.

[00:15:39] Ramit: It's almost unbelievable. But that is what happens. The lesson that I took away from that trauma class is don't freeze. If something bad is happening, don't worry what other people are doing. Move, even if it feels silly, even if it feels like an overreaction, you gotta move. That's why when COVID hit, my wife and I were living in New York City and I looked around and saw what was happening with the compounding numbers, and I said, we are outta here tomorrow.

[00:16:03] Ramit: We left immediately before others left, and I remember our friends were on a WhatsApp group and we told 'em, we're leaving tomorrow morning. And they were like, really? Are you sure? It felt like an overreaction by next Friday. It was a very serious thing, and I think about that class. Every time I meet a couple like Michaela and Dave, people who are not lazy, they're not irresponsible people who are simply frozen, that doesn't make them bad people.

[00:16:30] Ramit: It's actually deeply human.

[00:16:32] Dave: So right after this, I wanna help them start moving again.

[00:16:42] Ramit: When did money come up for the first time between the two of you? In a really substantive way?

[00:16:48] Mikaela: The one thing that I can think of is when we first decided to move in together, uh, we had another couple that was close friends. So the four of us moved into like a three bedroom, two bath apartment. The first thought that I can think of is, oh my God, how much money we are going to save because we're splitting it four ways.

[00:17:07] Ramit: Holy shit. Who around you has called one or both of you? Penny pinchers or cheap?

[00:17:13] Dave: Uh, and not the word cheap, but definitely frugal and bargain hunters and friends. Family.

[00:17:20] Mikaela: Friends. Yeah.

[00:17:22] Ramit: When was the last time that you told somebody how good of a deal that you got on something? I'm gonna guess it's in the last month,

[00:17:30] Dave: probably the last, probably the last week.

[00:17:32] Ramit: Ah,

[00:17:32] Mikaela: probably like Black Friday sales for our oldest son. He's getting a bike for Christmas, it was like 60, $65. And then Cyber Monday rolls around and Dave goes, Hey, uh, how much is it now? Like, can we get a better deal? Is it is? And he was like, we could buy it again and return it.

[00:17:52] Ramit: Alright, well you guys wanna be cheap.

[00:17:55] Mikaela: No, I mean, it got us to where we are, but no, I want to be able to spend our money and not feel guilty about it. I just feel like we can't get out of the mindset of when we first started dating and had like nothing and we made that work so well, budgeting and getting to where we are, that it's so hard to get out of that mindset of we have the money, why don't we use it?

[00:18:21] Ramit: Answer the question for me. Why don't we do this?

[00:18:24] Mikaela: Because what if something happens? What if. We get a random doctor bill or one of us gets sick or the kids can't go to daycare for a week for some odd reason, or my mom needs it or something else. So pause,

[00:18:35] Ramit: pause, pause, pause. Yeah. Let's take a step by step.

[00:18:38] Ramit: How much do you guys have in your savings account?

[00:18:40] Mikaela: Isn't it like 20,000 or

[00:18:42] Dave: 80? 90,000

[00:18:44] Mikaela: maybe. Oh, oh we're, I thought I was just talking about mine. Sorry.

[00:18:48] Ramit: That's also not the number. It's higher than that.

[00:18:50] Dave: 120,000.

[00:18:52] Ramit: It's $106,000. You get a $6,000 medical bill. You write a fat check here, take it. Get the outta my life medical industry.

[00:19:01] Ramit: Or even better, you call 'em and negotiate it down and then you write the check for $4,000.

[00:19:06] Mikaela: Yeah.

[00:19:07] Ramit: What's going on that, in each of these examples, the answer is actually quite simple. If you have the money, but the fear of it, the idea of it seems to be quite overwhelming. What do you think is going on there?

[00:19:20] Mikaela: Like I said, my mentality is still stuck in the, like we. Just are in the grind of it and we don't have the money. Like my mind has not come to terms with how much we have saved and invested and come to have at this point.

[00:19:39] Dave: I think it's a frugality, frugality mindset and living as if it's a scarce commodity.

[00:19:44] Dave: Like we don't have the number in our bank account. We couldn't cover that cost.

[00:19:48] Ramit: Yeah. When was the last time you took a trip?

[00:19:51] Dave: It's been five years since we've done a vacation just for us. And even that was us going and then meeting up with one of my friends in Colorado, which was great. It was fun, but it's not just us.

[00:20:04] Ramit: So like approximately five or six years ago. And how do you feel about that? Like some people are perfectly fine traveling once every five years, some are not. What's your take on that?

[00:20:15] Mikaela: I definitely wish we were traveling more. Life and timing is so unpredictable, like you don't know how long you have.

[00:20:23] Mikaela: While we have our health and the money, I would love to start making those memories together for us and our family and enjoying it before it's too late.

[00:20:34] Ramit: Mm-hmm. I appreciate that.

[00:20:36] Mikaela: Yeah. I get jealous of my friends that travel constantly, but they don't have kids, so it's a little easier for them.

[00:20:44] Ramit: Is the reason that you don't travel kids?

[00:20:46] Mikaela: I'd say partial. Just because childcare.

[00:20:49] Ramit: Dave, what's going on in your head? I can see you're thinking right now.

[00:20:52] Dave: That's what we used to do in the past. We would just build, not necessarily a big vacation, but just weekend and things to do.

[00:20:59] Ramit: What changed?

[00:21:00] Dave: Lack of fun?

[00:21:02] Ramit: Uh, maybe, but what changed? Why

[00:21:05] Dave: now? Kids.

[00:21:06] Dave: Different priorities and we were putting our priorities into different places.

[00:21:10] Mikaela: Yeah. And I feel like. We are. So we get so head down in the day to day that you look up and you're like, oh crap. Six months have gone by. Like just this year. It's like, where'd the whole year go? Did we do anything for ourselves?

[00:21:27] Mikaela: And then even if it's is with the kids, once we start planning it like hits a point where it's just like, I don't, not that is this even worth it, but it's like, is this actually what we want to do?

[00:21:40] Ramit: Do, do you see why?

[00:21:42] Mikaela: Yeah.

[00:21:42] Ramit: If you approach something as a to-do list. Mm-hmm. Whether it's buying new leggings or taking a family trip, if you approach these things as an obligation, as an, oh God, we got this family trip.

[00:21:55] Ramit: Oh God, I gotta get new leggings, then of course you're not gonna wanna do it or do it well. It just becomes one thing that's just like relegated to, oh God, add it to my to-do list. I have things on my to-do list that have been there for like three months deep down, I just don't want to do 'em. I think that was quite illuminating when I asked you why did you used to do that, but you don't do it now.

[00:22:18] Ramit: The answer that you gave me was almost reflexive. It is what so many people in America say, what was the answer?

[00:22:27] Dave: Priorities And kids.

[00:22:28] Ramit: Kids. Now let's not minimize kids. It's a 4-year-old and a 1-year-old. That's a out of work, and you love your kids. You wanna be with them. I understand that, but it's quite interesting that people making $40,000 a year with two kids would say kids, and then we have a couple like you making way more money and your answer is the same.

[00:22:54] Ramit: For why you couldn't take a trip in the last five or six years.

[00:22:59] Mikaela: I feel like I am, I get in the details of our family and all of the x, y, z of the kids. And then Dave gets on the details of like the price and like sorting all of that out and just

[00:23:16] Ramit: who's getting on the details of the two of you having a rich life.

[00:23:18] Dave: Neither one of us have focused on it.

[00:23:21] Mikaela: Yeah. I feel like financially Dave focuses on making sure that we invest right and we save and everything, but a part that's

[00:23:30] Ramit: not a rich life that's just accumulating money.

[00:23:33] Mikaela: Yeah.

[00:23:33] Ramit: A rich life is having a vision. So here you are today, you've made a certain series of decisions interlocking and you got money.

[00:23:43] Ramit: I wanna look at your numbers in a second, but I'm just wondering if, if none of us change on this call today, if the two of you don't change it thing, what happens?

[00:23:53] Mikaela: I'm scared that we like blink of an eye. We're 65, 70. We never did anything with some money. Yeah, we have a great retirement. I hope the kids are good, but did we enjoy life or like, I hope to God we even make it to 65, like with all of the health scares that we've encountered this year and last year.

[00:24:17] Mikaela: I'm terrified that we don't use it and something happens to one of us and then we don't get to share those memories together. And that's really scary to me.

[00:24:27] Dave: I'm almost more shortsighted and I could see the burnout, the friction, the frustration, the stress that happens if we don't. Really start thinking about this in the next five years, we're gonna have money in retirement, not be able to use it 'cause we're old and it's just gonna go to hospital bills or health bills or whatever.

[00:24:45] Dave: Check in. Knee replacements. Hip replacements,

[00:24:47] Mikaela: yeah. And then we still don't know how to use it in retirement. So then we just have so much leftover money that that's amazing for our kids. But I would like to use it and create these memories while they're young, while we're young and healthy and yeah, it's so that's where my fear lies.

[00:25:06] Ramit: I think both of those are real. I would like to understand a little bit about your numbers. So a couple of questions. What was it like creating the conscious spending plan together?

[00:25:19] Mikaela: It stuff is a little more confusing for salary wise, so it took a little longer on that end. But yeah, for the most part, the investment accounts and all of the.

[00:25:29] Mikaela: Big number accounts. I feel like were on him. And then I came in with the subscriptions, what we pay for daycare, things like that as, yeah,

[00:25:38] Ramit: don't Mikayla, I was trying to get to the numbers and now you diverted me and now we have to talk about this. Mikayla, have you heard me talk to men and women on this podcast?

[00:25:50] Ramit: And then I'll ask the women, what is your role in this relationship and what do they always say?

[00:25:57] Mikaela: Everything with the children.

[00:25:58] Ramit: Exactly. On a given day. Mikala. When it comes to thinking about navigating your mom, who's sick, your kids who need attention work, Dave, all of it. How would you characterize how that feels?

[00:26:12] Mikaela: I feel like I'm on autopilot all the time. For other people. I feel like my me time is when I'm sitting at my desk at work, and that's a little pathetic because it's like. I'm doing that for my family as well. So,

[00:26:28] Ramit: have you told Dave this?

[00:26:30] Mikaela: No.

[00:26:30] Ramit: You wanna tell him?

[00:26:31] Mikaela: Hey, I feel like I do a lot for everyone and it gets to me.

[00:26:41] Mikaela: Sometimes I feel like I need to break once in a while.

[00:26:45] Dave: I don't want you to feel that way. I really don't. And that's, I know you

[00:26:48] Mikaela: don't,

[00:26:48] Dave: that's me stepping up. But I, I also want you to feel comfortable in, in sharing and communicating this too. When you need a break, I'm gonna go sit down. I need you to do this.

[00:27:01] Mikaela: Yeah.

[00:27:02] Ramit: I see this a lot. In most households I work with, the financial labor is divided the same way. A lot of visible labor goes to him. A lot of invisible labor goes to her. Nobody ever sat down and decided this. It just kind of happened and it shows up in the small stuff. Who's handling the pediatrician appointments?

[00:27:24] Ramit: Who's tracking what they need for groceries? That's McKayla. I suspect this hasn't been brought up at home and there's a lot of discussion happening these days about invisible labor. I think it's an important topic to have on the financial side. It reminds me of this famous quote that Jeff Bezos once told his senior executives.

[00:27:45] Ramit: He said, there's no reason for you to be stressed out. If you're stressed out, you should hire someone to help. And his point was, the more successful you get, the more you can deploy money to solve problems. For somebody making $278,000 a year with $1.5 million in the bank, they can afford to solve some of these problems.

[00:28:09] Ramit: And I think there's a question underneath all of this that she hasn't let herself ask yet. I've worked this hard, I've held a lot of this together. What do I get? That is what I wanna show her today. We're gonna get into the numbers right after this.

[00:28:27] Ramit: Here we go. With the CSP. Holy. There's a lot of zeros on this CSP. Okay, hold on. Dave, can you read off the word in bold and the number in full next to it for that entire box please?

[00:28:39] Dave: Assets 545,000 investments, 1,032,000 savings, 106,000 debt, 195,000 total net worth. 1,488,000.

[00:28:54] Ramit: Okay, well done. What do you think about those numbers?

[00:28:57] Mikaela: They're amazing.

[00:28:58] Dave: They are amazing. And I also realized that we shorted assets a bit.

[00:29:03] Ramit: 545,000 of assets, $1 million in investments. Mm-hmm. Y'all are in your early thirties. Incredibly impressive. And I also love that both of you said. I said, how do you feel? You said, amazing. That, that is awesome. That is like appreciation for what you have clearly worked very hard for,

[00:29:22] Dave: and where we are is where we wanted to be.

[00:29:24] Dave: We're okay with this forever versus, Hey, let's plan for the next thing. It's, that's where I think we're lacking.

[00:29:30] Ramit: You made it to where you wanted to be in terms of your finances, is that what you're saying?

[00:29:36] Dave: Yep. Finances, family house.

[00:29:39] Ramit: Wow.

[00:29:39] Mikaela: For this age. Yeah.

[00:29:41] Ramit: Great. Congratulations. That's really cool. Did you stop and kind of recognize what you've achieved?

[00:29:48] Dave: Yeah. I think for me quickly and then just kinda went like, okay, we're there now. What's the next thing? Put the next marker out there.

[00:29:53] Ramit: What's next? Okay, I get that. That's, I, I totally understand and connect with that. Mikayla, what about you?

[00:29:59] Mikaela: We recognize the milestones that we've hit. Like even when we paid off our student loans, we paid 'em off a year before we wanted to, we were excited, like, wow, we actually did it and.

[00:30:11] Mikaela: We came up with a new goal, hit that recently, so it's like, wow, we did that one now too. So like what's next? I feel like how we have acted financially back right after college, it did help us get to where we wanna be. But now I feel like I am living the rich life that I never thought was possible as a child, and I love that.

[00:30:37] Mikaela: But now it's like, well, do I wanna stay content like this? Or wouldn't it be more fun or like have another vision laid in place for like the next level of that rich life.

[00:30:50] Dave: I think a lot of our goals have been so financially based that we haven't thought about the next step of rich life. We just hit financial goal, financial goal, financial goal.

[00:30:58] Ramit: Well, why don't you guys just keep doing it for the rest of your life? Come on. That's what, that's what they say, right?

[00:31:02] Mikaela: We see how fun we are talking about the plant.

[00:31:05] Dave: I think it's, that's it. It's the, we, we question and analyze spend as we won't hit that financial goal as fast.

[00:31:15] Ramit: Now, how much did you short your assets by?

[00:31:17] Dave: I would say probably 30 to 40,000. Didn't really account for the vehicles in it.

[00:31:22] Ramit: Alright, I'll add it. Wait, what kind of vehicles? 'cause if they're, uh, vehicles I don't like, I'm just gonna leave them out and 'em out. What are they? What brand?

[00:31:29] Dave: Uh, Toyota and Hyundai.

[00:31:31] Ramit: Oh my God, I love it. Okay, I'll add 'em in.

[00:31:34] Ramit: 545,000 turns into. What do we say? Five 70? How about that?

[00:31:39] Dave: Yeah, five 70 is good.

[00:31:40] Ramit: Let's do income. McKayla, can you read off the combined gross monthly income, please?

[00:31:46] Mikaela: 23,186.

[00:31:48] Ramit: Great, so combine the two of you make $278,228.

[00:31:53] Mikaela: Last we spoke earlier this year. I thought it was like one 70, which I thought was amazing.

[00:31:59] Mikaela: Then I was like, oh my God, we make that much.

[00:32:02] Ramit: What is this? People coming on and not realizing by $100,000. Yeah. How much they make per year. What world am I in?

[00:32:11] Dave: She actually got mad at me and thought that I overinflated our numbers so much that I had to email you all to change it. And then we looked back at our taxes last year and confirmed that we weren't that far off.

[00:32:23] Ramit: Wow. Michaela, what did it feel like when you realized your household makes an extra 100 K per year?

[00:32:30] Mikaela: I mean, I felt like my heart dropped. I was just like, holy shit. Like. I was shocked.

[00:32:36] Ramit: Finish this sentence. Holy. What?

[00:32:38] Mikaela: I never thought that was possible.

[00:32:40] Ramit: Okay. And then

[00:32:42] Mikaela: it's amazing like, but what now?

[00:32:47] Ramit: Well, tell me what is the answer to that?

[00:32:49] Mikaela: I mean, that's kind of why we came on the show. And then not just that, but I've been the last few months trying to cycle through my head like, I need to change my rich life. How do I do that without feeling guilty, even seeing that big number? And I know how amazing it is. And I'm absolutely grateful because like I said, I never thought that would be possible in my lifetime to be as fortunate as we are.

[00:33:16] Mikaela: But now I feel like I'm so stuck at a certain level that I can't elevate and not feel guilty about wanting to spend our money.

[00:33:25] Ramit: Yeah, that's really common. That's really common. You're not alone. You're not weird. You're not broken. That is very common. What is rare and what I think is really impressive is that you are asking for help.

[00:33:39] Dave: Mm-hmm.

[00:33:39] Ramit: It's not a topic that's talked about a lot. It's quite taboo. Hey, we make a lot of money more than we ever thought possible. In fact, oops, I underestimated our household income by $100,000.

[00:33:51] Mikaela: Yeah.

[00:33:52] Ramit: What do we do now? The typical advice in America is like just count your blessings and save it. 'cause you never know what's gonna come around the corner.

[00:34:00] Mikaela: And I feel like we're there now 'cause we have a lot of hardships that have happened and are still to come.

[00:34:08] Ramit: But can I make a point to you that you would be doing the same thing if you had no illnesses in your family?

[00:34:15] Mikaela: Yeah, it just heightens it more I think.

[00:34:18] Ramit: Yeah. But you know that before you received the news about either of these things, this is what you were doing with your money, you're doing exactly this.

[00:34:26] Mikaela: Yeah. Because even last year, I mean the numbers might not have been as high. But I could think of something like we were about to have a baby, so it's like, oh, well we can't do anything 'cause all of these expenses with a new baby. So That's right. I feel like there's always an excuse.

[00:34:43] Ramit: Yes, yes. This is a little challenging for some people to hear because for a lot of people those are major expenses.

[00:34:51] Ramit: Like having a baby is expensive. Mm-hmm. Buying a house or buying a car or a medical expense is expensive. No doubt. But one of the reasons I wanted to talk to you, and one of the reasons that I make it a point to find people from all different backgrounds, uh, financial income, socioeconomic, racial, all of it, is that there are different groups in different times in life where we actually do act differently.

[00:35:16] Ramit: Where sometimes we have to act and think differently. And this is probably one of those times, let's keep going. So on the application, you listed 270 k. You told my producer that you thought you made closer to 380 K. What happened there?

[00:35:34] Dave: So when we look back on taxes three 40 for last year, and that is, I think because of some stock allocations.

[00:35:42] Ramit: Hold on. I need to, I need to like mentally digest what's happening here. Mikayla thinks that you made 170 K, then it turns out you made 270 K, but actually you made 340 K. Am I being punked right now?

[00:35:55] Mikaela: I feel like his job confuses me so much that I know he makes more than me and that's essentially where I stop it.

[00:36:03] Ramit: Okay, so you get paid like what You get a bonus and commissions and stuff like that?

[00:36:07] Dave: Yep.

[00:36:07] Ramit: Commissions. Okay. So it's irregular.

[00:36:09] Mikaela: Mm-hmm.

[00:36:10] Dave: Yeah, it is mostly, mostly predictable. Um, but there's also stock purchase program that I take part in, uh, as well as, uh, granted some stock.

[00:36:18] Ramit: Have you communicated how your income works to Mikayla?

[00:36:23] Dave: Yes.

[00:36:24] Ramit: Why do you say it like that?

[00:36:26] Dave: Uh, I say, yes, I've communicated how it works, but it's also at a point where our question just goes to, okay, well, are we covering our budget? Are we covering our expenses? And then it's, uh, okay, well then we should be good.

[00:36:41] Mikaela: As long as the budget and the bills are getting paid, we can do our day-to-day by the things we can for the kids and stuff.

[00:36:50] Mikaela: Like, I'm not thinking higher level than that.

[00:36:54] Ramit: Mm-hmm. Look at my hands. Look at my hands. It's interlocking. Everything about the way that the two of you interact with money is interlocking on the frugality basis, even knowing your household income. Do we cover our budget? Do can we keep the lights on? Like that is how low

[00:37:11] Dave: mm-hmm.

[00:37:12] Ramit: Of a bar that you are setting. You think I'm walking around like, Ooh, do we have enough money in our checking account to cover our electricity bill? No way. Yeah. That's not a concern. I've accepted that. I'm never gonna be concerned about our electricity bill ever. I'm trying to elevate myself. So the way that you two even talk about your income is interlocking to force you to not even dream.

[00:37:33] Ramit: How could you dream if you don't even know within $200,000 how much you make per year?

[00:37:40] Dave: I think it goes back to just living well below the means and staying below the means in order to be able to do other things with money.

[00:37:46] Ramit: Can I ask you a question? Like, why never did you probe him and say like, Hey, I don't understand all he's vesting and this and that.

[00:37:52] Ramit: Like, give me a number. Why did you never say that to him?

[00:37:55] Mikaela: One. 'cause I trust him 'cause we've been together for 10 years and

[00:38:00] Ramit: mm-hmm. Have you heard these, um, stories and videos where women. Uh, notice that their husbands never ask about their medical conditions. Like woman might be taking medication or she might see an ob and the husbands are just kinda like, whatever, like is you take care of your medication.

[00:38:19] Ramit: Whereas mm-hmm wives are often making sure their husbands are taking their medication and supplements and stuff. Have you heard this before?

[00:38:25] Mikaela: Yeah.

[00:38:26] Ramit: Okay. How about if that were happening here and you were taking like 20 different kinds of medications 'cause you were sick and stuff like that? And then I ask Dave, like, Dave, how come you're never curious about it?

[00:38:36] Ramit: How come you never asked Mikayla? And Dave goes, I trust her. I trust her as long as she's alive and I trust her. How do you think that would've been received?

[00:38:46] Mikaela: Not good at all. Yes. It's like, why you love her? Why aren't you looking into the details more?

[00:38:52] Ramit: Yeah. So what do you make of this? Why have you not asked those questions?

[00:38:56] Ramit: Think hard

[00:38:57] Mikaela: because I'm just comfortable with him doing it and doing it for us.

[00:39:01] Ramit: Yeah. He's the money guy. I focus on the kids.

[00:39:04] Mikaela: Mm-hmm.

[00:39:05] Ramit: And that's it.

[00:39:06] Mikaela: I feel like if I understood the numbers more and had like clear numbers put to them, I think I would be celebrating more or being like, wow, that, that's awesome.

[00:39:18] Ramit: Yes. Great.

[00:39:19] Mikaela: Whereas when he says, I have stocks that are besting, I'm like, okay,

[00:39:24] Ramit: what is that? It means nothing. Now guys, I wanna point something out to you. I, I respect you a lot. I'm not, I am not meaning for any of this to be condescending. I, I think both of you're very intelligent, obviously very successful.

[00:39:36] Ramit: So the way that we are talking about this, it might seem like we are like bringing building blocks, you know, when we're playing with these very juvenile building blocks, it's actually not the case. It is not juvenile to connect with your partner. Even the simplest thing of like, this is how much I make.

[00:39:54] Ramit: That's not juvenile, it's not pandering or condescending. We need to start at the basics and maybe the person gets it. Okay, cool. Then we move faster. Mikayla, in part you came on here 'cause you know, you're like, why do I feel this way about leggings and and travel and we struggle to spend money and we wanna live today and tomorrow.

[00:40:12] Ramit: And a lot of people, maybe including both of you, thought that I would wave a magic wand and go like, you should just buy the leggings. It's okay, you have a lot of money. Maybe, but that's so simplistic. Like you already know that what is really going on is we are trying to take this interwoven set of, uh, beliefs and attitudes and behaviors that you have put together and we're trying to unwind them.

[00:40:36] Ramit: And you can see that how far you have to go back. You don't even talk about your income. So this is the level of rebuilding that we are doing, and I hope you can see that when you start to build this solid foundation. Things like, should we buy a watch or leggings or take an extra few days in New York?

[00:40:55] Ramit: Become quite easy.

[00:40:57] Mikaela: Mm-hmm.

[00:40:57] Ramit: How does that strike you?

[00:40:59] Mikaela: I would love to get to a level that, and if it means that we have to start from ground zero again and try to work our way back up there, I'm willing to do it. It it means that we can feel freer with spending and not question every purchase that we're doing for ourselves.

[00:41:17] Ramit: Fantastic. And Dave?

[00:41:18] Dave: Yeah. I can see how it unlocks the future of us actually planning and getting descriptive about what the rich life is. Yes. For both of us. And then getting invested in each other's rich life. Not just like, here's our rich life individually, but also here's our rich life together and how they can join.

[00:41:34] Ramit: Yeah. Amazing. Can we go through some of the rest of your numbers?

[00:41:39] Dave: Mm-hmm.

[00:41:40] Ramit: Alright.

[00:41:43] Ramit: Again, I wanna reiterate, you have a net worth of about 1.5 million early thirties of that 1 million is. Invested, which is really, really impressive. So we already know that this will turn into a lot of money. Mm-hmm. Very good. This is not just a high quantity of money, but it's a high quality of money the way that you have apportioned or allocated it.

[00:42:06] Ramit: Very well done. You also have an extremely high income. That's fantastic. And let's take a look at the rest here. So your fixed costs are at 60%. That's a little higher than I would've thought for a couple with a very high income. Let's dive in here. You got your rent? Is it rent or mortgage?

[00:42:21] Dave: Mortgage.

[00:42:21] Mikaela: It's mortgage.

[00:42:22] Mikaela: But I will say for that category, we included daycare on that. 'cause we didn't know where exactly to put daycare. So our mortgage is not that high.

[00:42:31] Ramit: Oh, how much is your daycare?

[00:42:34] Mikaela: It's probably almost 50 KA year.

[00:42:36] Dave: I think for me, I categorize it as a rent payment. It's almost like, hey, you're renting for four years, this space for your baby.

[00:42:42] Ramit: Alright. I think there's something there, but I don't know what it is, but whatever. Alright, moving along here. Your car payment is zero. What's the story with that?

[00:42:51] Mikaela: We just paid mine off.

[00:42:53] Ramit: Great. Yep. I'm sure your gas is quite nominal. We can add it. It'll make a zero difference, but you have $106,000 in savings, which is great.

[00:43:03] Ramit: That's more than 12 months of emergency fund, but I noticed that you are still saving $1,500 a month towards an emergency fund. What's behind that?

[00:43:15] Mikaela: Just haven't thought of what to spend, like, not what to spend the money on, but like, 'cause yeah, we could go out and spend it on stupid stuff any time we want.

[00:43:29] Mikaela: Like we could splurge and get a whole new wardrobe or on our children and do some insane stuff, but it's like. Actually spending it on quality time and quality things that we want, we're stuck in that. So it's just going to savings.

[00:43:43] Ramit: It's a lack of vision in leftovers. Do you appreciate that there is a point where you do not need to keep saving money?

[00:43:50] Dave: Mm-hmm. I do. I actually think it's far too much in savings.

[00:43:55] Ramit: Okay.

[00:43:55] Mikaela: Yeah.

[00:43:55] Ramit: Wait, is the next line that you're about to say, I think we should move it to investments?

[00:44:00] Dave: That's always what goes into my head. Yes,

[00:44:02] Mikaela: absolutely. For heaven

[00:44:04] Ramit: spending.

[00:44:05] Mikaela: Mm-hmm.

[00:44:06] Ramit: I mean the, the reason that you came to me. Mm-hmm. Because there are a lot of other people who can tell you to invest more and be more frugal.

[00:44:13] Ramit: There's a lot of people out there. You came to me and so you know that I specialize in showing people how to use their money to live a rich life. Mm-hmm. So I note that neither of you have said, Hey, spending, it is something we've thought about. These are our three things. What do you think? It just kind of feels like you're like, I don't know, we have this extra money.

[00:44:38] Ramit: We haven't really thought what to do with it. Mm-hmm. We have all these reasons we don't wanna spend on quote stupid stuff. But what about actually spending it on cool stuff, meaningful stuff?

[00:44:49] Mikaela: Yeah. I feel like our rich life, the one vision that we have is, it's not really things, it's experiences, but we're stuck on trying to create that experience because once we actually start planning, it's like, oh, well, do we really need that?

[00:45:08] Mikaela: I don't know. Like we just still get hung up on the money. Lisa,

[00:45:12] Ramit: can I just answer the question? No, you don't need that. Yeah, you don't need any experiences. So there's your answer. What do you think is behind you asking the question? Because the answer to that question is very obviously no.

[00:45:25] Mikaela: Mm-hmm. I

[00:45:27] Ramit: don't need to take a pizza tour in New York.

[00:45:31] Ramit: But I did. I don't need to go to the museum that I just went to over the weekend, but I did

[00:45:38] Mikaela: ultimately, like am I, I still just look back like, am I gonna feel fulfilled at the end of the day, at the end of my life? Like, am I gonna be satisfied with just working my ass off for nothing? Like, not for nothing.

[00:45:53] Mikaela: We have a beautiful life, but like my whole thing with our family and our children is doing as much as we can with them and making those experiences and memories, because I didn't have that as a child.

[00:46:08] Ramit: Can I understand a little bit more about how you grew up, McKayla? I think it would help me understand your views on money today.

[00:46:14] Ramit: So if, if we go way back to when you were a kid? Yeah.

[00:46:19] Mikaela: Um,

[00:46:20] Ramit: one sec. One sec. I noticed you're already tearing up.

[00:46:23] Mikaela: Yeah.

[00:46:24] Ramit: What's going on?

[00:46:25] Mikaela: Well, it's just stressful to, I mean. To look back.

[00:46:31] Ramit: Mm-hmm.

[00:46:32] Mikaela: Um, I mean, it just brings up a lot of emotions. 'cause like I said, I'm very grateful for what I have now because I came from nothing.

[00:46:42] Mikaela: So,

[00:46:44] Ramit: do you mind if I ask you a few questions about it?

[00:46:46] Mikaela: Sure.

[00:46:47] Ramit: Do you need to pause or there's anything

[00:46:48] Mikaela: uncomfortable? Uh, yeah. Let me get a tissue really fast. Sure, sure. One moment. Sorry,

[00:46:52] Dave: I'm pausing to give her a hug as well. Real quick,

[00:46:57] Ramit: little peek behind the curtain. Here at Money for Couples, we ask our guests to sit in separate rooms so that we get clean audio and separate camera feeds. But it also means that when things get emotional, they can't just reach across the table and hold each other's hands. So sometimes they leave the room to hug each other, to hold each other, and it's actually one of the most touching moments between couples.

[00:47:24] Ramit: Because it's almost like there's an irresistible magnet bringing them together. They're putting each other first, not this podcast conversation. So I especially appreciate it. Now they're back. Listen in as Michaela shares her story,

[00:47:42] Dave: what do you remember about growing

[00:47:43] Ramit: up when you were young? What did your family say about money?

[00:47:47] Mikaela: Um, it was always stressful. It was always a stressful topic. My parents got divorced when I was fourth grade, so like eight or so.

[00:47:56] Dave: Mm-hmm.

[00:47:57] Mikaela: My mom had to file for bankruptcy during the divorce. My dad had, uh, his own company, like, uh, construction company. So it was, uh, very up and down, depending on like.

[00:48:12] Mikaela: Season and everything.

[00:48:14] Ramit: What do you remember your mom saying about money as she was going through that financial hardship.

[00:48:18] Mikaela: I mean, she was always stressed, like there, and there was never a positive conversation about money because it was always paying something off, paying bills. Like after my parents got divorced, I can only think of one or two times in her life.

[00:48:32] Mikaela: She never actually took a vacation. So that's, I think another reason why I look at our life and I essentially, especially now that she's sick, like I don't wanna look at myself at 65 and think I never traveled and then I'm too sick to actually do these things.

[00:48:53] Ramit: When you say she never took a vacation, was that a sore point with her?

[00:49:00] Mikaela: Yeah, I mean she, especially after getting sick, she has definitely said like she regrets wasting time and that she never. Did anything like fun for herself and financially, I don't even know if she budgeted to even allow herself to do those things.

[00:49:20] Ramit: Do you think that if she had had a little bit more money that she would've traveled?

[00:49:24] Mikaela: No.

[00:49:24] Ramit: Yeah, I agree. Why do you think that is? What would she have said?

[00:49:28] Mikaela: She would've spent it on something else. They also had addictions and stuff, so both my parents, so

[00:49:34] Ramit: ah,

[00:49:34] Mikaela: they spent frivolously on things that I don't think were needed, so.

[00:49:39] Ramit: Hmm. It's quite interesting.

[00:49:42] Mikaela: Mm-hmm.

[00:49:42] Ramit: What kind of messages, looking back, did you take away from your upbringing with money?

[00:49:49] Mikaela: I mean, if I want something, I have to do it myself. Okay. Like, I had to get a job at a young age. I was 14, my first job working under the table and then had to, I, my ultimatum was, I played softball growing up and it was. It's either choose softball or get a job. So I stopped softball and I got a job, uh, to pay for car insurance, gas, like going to the movies or something as, and then it trickled into, um, I lived with my dad mostly full-time when they divorced, but it turned into my dad saying, well, can you pay for your cell phone bill?

[00:50:32] Mikaela: Can you pay for cable? And it's, so I moved out early 'cause I'm like, well if I'm gonna pay for these things, I'll pay for myself and be independent.

[00:50:41] Ramit: Is your dad still with us?

[00:50:43] Mikaela: No, he passed away six years ago. How was

[00:50:46] Ramit: he with money?

[00:50:48] Mikaela: I would say a little better than my mom. But it was essentially, yeah, like as long as he has money to budget, to like pay his bills, the rest of it he is spending on himself.

[00:51:01] Mikaela: Essentially like with his friends at the bar, that was his like social, he didn't really care about vacations. It was more so the social aspect of like the neighborhood bar hangout. So yeah.

[00:51:12] Ramit: What, what part of the country did you grow up in?

[00:51:15] Mikaela: The south?

[00:51:16] Ramit: Any siblings?

[00:51:17] Mikaela: I had an older brother, but he passed away when I was 19, so almost 11 years ago.

[00:51:24] Ramit: I'm sorry to hear that.

[00:51:25] Mikaela: Yeah, thanks. Steve.

[00:51:27] Ramit: Did your dad's passing and your brother's passing, did that affect the way that you look at life?

[00:51:33] Mikaela: Absolutely. There's no way It would've not.

[00:51:36] Ramit: Yeah.

[00:51:37] Mikaela: So

[00:51:37] Ramit: like in, in what ways? If you can share?

[00:51:40] Mikaela: Um, my brother passed away when I was, or he was 24, so I was 19. So you're already going through a huge transition anyway.

[00:51:48] Mikaela: 'cause you're like. Independent college. Yeah. Like trying to find yourself. So I think it just really shook me.

[00:51:58] Ramit: Mm-hmm.

[00:51:58] Mikaela: And made me realize that like, life can be short and it can end instantly. So that kind of freaked me out. But I do remember my father saying when my brother passed away, that maturity wise, I, he said like, I grew up very fast that year.

[00:52:16] Mikaela: Like he could tell how fast I grew up.

[00:52:19] Ramit: When you think back and when you were younger, when you were a little girl, do you remember having fun?

[00:52:25] Mikaela: Um, I think of more of the negative, more than the positive. I feel like a lot of the positive, I can't remember because you think of the negative, like it alwa always more.

[00:52:37] Ramit: Yeah.

[00:52:38] Mikaela: Yes. There's like bigger moments, like a Christmas or something here and there, but for the most part it was very stressful.

[00:52:46] Ramit: Right.

[00:52:47] Mikaela: I felt like I had to be the parent to my parents more so I was doing that from a young age and still continuing to this day, I feel like I am more of a parent than the parent.

[00:53:03] Mikaela: So

[00:53:04] Ramit: you've heard the phrase parentification.

[00:53:06] Mikaela: Mm-hmm.

[00:53:07] Ramit: And I think about it like as a young girl and then as somebody who watched their parents get divorced when you were young. Mom struggles, get older, gotta get a job or play the sport you love. And then continuing on to your brother tragically passing away.

[00:53:26] Ramit: Your dad passing away. Now your mom is sick and you are the primary caretaker.

[00:53:30] Mikaela: Mm-hmm.

[00:53:30] Ramit: That's pretty serious.

[00:53:33] Mikaela: Mm-hmm.

[00:53:33] Ramit: It's, it's quite striking that when I ask, do you remember having fun? You essentially said, not really.

[00:53:42] Mikaela: Yeah. Because I just was always, I always had a goal in mind to like, I had to get this done.

[00:53:50] Mikaela: Like,

[00:53:51] Ramit: yeah.

[00:53:51] Mikaela: I mean, it was on me and I'm fine with that and I am the person I am today because of that, which is good. But yeah, it's like, oh, I want to go to college. I need to do it myself. I need to work full time. The whole time, like there was no, I remember in college, like people going, even Dave, like went to a different country to study abroad for a semester.

[00:54:17] Mikaela: There was, that was never an option. It was like, I can't afford that. I can't, like I have to do this and this to have the life that I want. And it was always just like, yeah, making sure that I'm good and in a place. 'cause if it's not me, who's gonna do it?

[00:54:35] Ramit: And now that you have reached the life that you never even dreamed of.

[00:54:40] Mikaela: Yeah.

[00:54:41] Ramit: Do you have fun now?

[00:54:43] Mikaela: It's sad 'cause it's like I'm having more fun than I imagined I would, I guess.

[00:54:48] Ramit: Mm-hmm.

[00:54:49] Mikaela: At the time. Mm-hmm. But I know now that I am in a steady place. We're at this income we have been for a few years. It's increasing, if anything, which is fantastic. But now I, it's like, okay, well what's next?

[00:55:05] Mikaela: Like, that's, yeah.

[00:55:07] Ramit: Right.

[00:55:08] Mikaela: And then I even feel guilty a little bit that I'm not happy with being at this place because I, I am, I'm so happy that we aren't struggling, but it's like there's gotta be more than just being happy that we're not struggling.

[00:55:24] Ramit: Yeah. She's right. There is more, Mikayla did what you're supposed to, she watched her family struggle.

[00:55:32] Ramit: She took notes, she made sure it would never happen to her. But in the same way that a child grows up, their voice changes their height, everything, it becomes immediately obvious when their clothes don't fit anymore. But with money, there is no such signal. You can go from struggling to having a lot of money, but there is no direct signal that you have made it.

[00:55:59] Ramit: How many couples have come on this podcast and they have tons of money in an investment count or savings account, and the couples that I speak to still cannot internalize the idea that they're doing okay. Here we see her money. Psychology still stuck in a scarcity mindset. Remember those scarcity instincts worked for her in the beginning.

[00:56:23] Ramit: They got her to where she is today, but those very instincts are now harming her. Is what we are here to change here. Now we fast forward several years, quite a few similarities here. What do you take away from those?

[00:56:39] Mikaela: I mean, yeah, it makes a lot of sense as to why I am the way I am, but then it's a little upsetting 'cause it's like, well, I don't want to always be like that.

[00:56:51] Mikaela: Like I don't want to just be serious and always thinking about like, keeping the family, like household running and all of the checklists, just the day-to-day or our children. Like, I want to experience life as well. One of the big trips that we want to take, um, that both of us has talked about and just never implemented as like a Euro trip.

[00:57:13] Ramit: Mm-hmm.

[00:57:13] Mikaela: At least a week, two weeks, Europe traveling, seeing things.

[00:57:18] Ramit: What else?

[00:57:19] Mikaela: That's the hard part. I like, we, I feel like I'm still trying to envision what that could be. Mm-hmm. At one point, Dave and I were like, do we buy a second property? Like, do we buy a vacation home? And the more I thought about it, I was like, no, I don't think that's really what I want my rich life to be.

[00:57:39] Mikaela: It's great that, like, we have brought it up a couple times now, but I don't think a second property would make me like, that's not,

[00:57:47] Ramit: why are we talking about what you don't want?

[00:57:49] Mikaela: I, I don't know. I feel like my whole life that's, I've been more so negative mindset than the positive. There's things that I won't buy for myself, like let's say a massage.

[00:58:02] Mikaela: I like getting them as gifts because buying them for myself, I'm like, I don't need that. But knowing we have the income, why can't I get a massage once a month or once every two months instead of like once a year? I feel like it's almost uncomfortable for me to try to overarch and get into a new mindset of a rich life.

[00:58:25] Ramit: I'm glad to hear you. Expressing. See, what you did was quite typical, which is people who struggle to spend money, when I ask them what they wanna do, they gimme very lofty answers. I wanna travel to Europe for one to two weeks. I mean, if you haven't traveled for six years and you don't take any trips, that's, that's almost like me saying I haven't worked out in 20 years.

[00:58:48] Ramit: I want to play in the NFL. It is so unlikely Yeah. That it's just another way of deferring my dream.

[00:58:55] Mikaela: Yeah.

[00:58:56] Ramit: What would be much more reasonable would say, you know, I, I'd like to be able to go to the gym like once a week

[00:59:02] Mikaela: Yeah.

[00:59:02] Ramit: Or one ounce. Yeah. So I, I can get you to Europe. If you wanna go to Europe, I will help you do it.

[00:59:07] Ramit: No problem.

[00:59:08] Dave: Okay.

[00:59:09] Ramit: But sometimes it's as simple as I wanna go to lunch and be able to order appetizers and, and it seems so silly to say mm-hmm. I wanna get a massage for myself. We make 278,000 to $340,000.

[00:59:24] Dave: Okay.

[00:59:26] Ramit: But it's that N word. Oh god, I'm gonna get canceled again. It's the N word You said need?

[00:59:33] Dave: Mm-hmm.

[00:59:33] Ramit: Do I need it? If I can offer one piece of directive advice, it would be, in my opinion, that word should be banned from your household.

[00:59:43] Mikaela: Probably. Yeah.

[00:59:44] Ramit: It should be banned. And I would make it a whole theatrical thing. I would take a piece of paper, I would write need, Dave would videotape it. Well, Dave, you say it too.

[00:59:52] Ramit: So both of you should take it. Let your kids videotape you and you both write need, and you put it over the fire and you rip it apart and throw it in the fire and say like, that was our past chapter where we had to ask, do we need it? When you're making $35,000 a year, or you have $250,000 of student loan debt, that is a question you need to ask.

[01:00:14] Ramit: Do we need this? But when you make 10 times that. It's actually causing you to play small.

[01:00:22] Mikaela: Yeah. I want to get up that mindset for sure.

[01:00:25] Ramit: Okay. Thank you for sharing that. I am really, I really appreciate it. And I'm also sorry for a lot of the things that you have gone through, Dave. Can we talk about your upbringing with money?

[01:00:38] Ramit: What was your family socioeconomically, how would you describe them?

[01:00:42] Dave: Middle class.

[01:00:43] Ramit: Middle class. Alright. And uh, did you grow up with mom and dad?

[01:00:46] Dave: Yep. Mom and dad.

[01:00:47] Ramit: And did one work, or both? Work?

[01:00:50] Dave: Both worked.

[01:00:51] Ramit: If you go back in time when you were young, what do you remember your family saying about money?

[01:00:56] Dave: Early days there was a deep conversation about money.

[01:00:59] Dave: I don't think I paid attention to it much, but there also wasn't any hesitation around it. I think the earliest thing that I've kind of caught from them is I think they were talking about money and I grabbed a bunch of stuffed animals and went around the neighborhood trying to sell 'em, you know, $5 to the neighbors.

[01:01:14] Dave: Oh, I came home and they made me go back, give all the money, I think get my toy, get my toys and stuffed animals. But there wasn't, uh, there wasn't a deep scarcity.

[01:01:23] Ramit: What age did you get your first job? I'm guessing young.

[01:01:26] Dave: Yeah. Uh, first job was I think like 10 years old. Yeah. Maybe, maybe earlier than that.

[01:01:31] Dave: Doing newspaper out would just kind of hoard the cash, trying to milk it as long as I can. Wouldn't really go out spending it, but just started getting early days.

[01:01:39] Ramit: Well, what does a high school kid spend their money on anyway?

[01:01:42] Dave: Yeah. Well, and I wasn't much like a soda drinker or candy, that kind of stuff.

[01:01:45] Dave: Like the normal, normal stuff. I'd get a new bike. Like that was the biggest splurge that I can remember putting the money to.

[01:01:51] Ramit: So what'd you do with the money? Did you save it, invest It

[01:01:54] Dave: saved quite a bit of it. A lot of it. The cash sat in a shoebox, uh, for quite a long time. The rest of it just went into a savings account.

[01:02:04] Ramit: Whenever I hear about someone stashing cash in a shoebox. It tells me a lot about how they grew up. There's a scarcity mindset that makes people feel money needs to be held tightly where you can see it or even physically touch it. Typically, people who grew up with these beliefs either grew up poor or they grew up with parents from a different country.

[01:02:28] Ramit: Dave and McKayla came in with that instinct, and what's interesting is that when they found each other, this scarcity instinct doubled. They're like a supercharged scarcity couple, one plus one equals 10 on the scarcity scale, and they've spent years actually building impressive wealth, but neither of them has let themselves enjoy the money.

[01:02:52] Ramit: They're still operating with that same mental script. Most people never change their financial scripts. They just keep going and their account changes, but it has no correlation to how they think or feel about money. The question now is not just, Hey, do you have enough? They have more than enough. It's obvious.

[01:03:11] Ramit: The question is whether they can give themselves permission to truly believe it. Until now. What has your money identity as a couple been?

[01:03:20] Mikaela: I'd say save as much as possible, like for retirement.

[01:03:25] Dave: Okay,

[01:03:25] Ramit: Dave?

[01:03:26] Dave: Yeah. Long-term planning and save. Save.

[01:03:30] Ramit: Did you ever think about when you would stop?

[01:03:32] Dave: Yes. Yes. What

[01:03:34] Mikaela: really?

[01:03:36] Dave: I've thought about it, but never execute on it.

[01:03:38] Ramit: Aren't you the guy who has $102,000 in your savings account and you're still contributing $1,500 a month to that emergency fund?

[01:03:44] Dave: Yeah.

[01:03:45] Ramit: Y'all are rich. Do you know that?

[01:03:47] Dave: Yeah.

[01:03:47] Mikaela: Yes.

[01:03:48] Ramit: Wow. Okay, cool. That's cool. Even though it's a little painful for you to say, I love that you both said it.

[01:03:53] Ramit: That's great. Yes. I'm just telling you that as you change, as you start to make more, as you change socioeconomically, your attitudes and behaviors often shift. And that's not a bad thing. In fact, it's quite counterculture. 'cause in America we really regale those who are like, they stayed true to their roots.

[01:04:15] Ramit: They didn't get too big for their britches. You, we've all heard these phrases. The idea that your identity would change, of course your identity will change. Your identity changes when you become a parent. Your identity changes with your health as you get older. If you get super fit or the opposite, of course your identity changes.

[01:04:33] Ramit: And so wouldn't naturally your identity change as well. You can still retain some of your core values and you can perhaps adapt. Maybe you don't wanna spend three hours looking for a discount deal on a chair or a shirt. Maybe you wanna travel a little bit easier. Mm-hmm. So what do you think about that?

[01:04:52] Ramit: Both of you? Kind of smiling and nodding. I'm curious, Dave.

[01:04:55] Dave: It's strikingly accurate.

[01:04:57] Mikaela: Yeah. I feel like we are in the mindset of like, well if we're gonna spend, we have to get the best deal. And it's like, why are we living, like you said, why are we living in that mentality still when we can afford like the things that we want?

[01:05:13] Mikaela: So why are we so hesitant to pull the trigger on that? Like you said, if, if we want to start doing these trips or even smaller things, like Dave always goes on a yearly golf trip and that's something that he really enjoys. And so he's been doing it for like five years now with some of his buddies. They go for a weekend long golf trip and I love that for him.

[01:05:38] Mikaela: I don't have a mindset of something that I do for myself like that. And why shouldn't I like find something that I want and not have to second guess the budget or second guess the price on it before just saying, yeah, I'm gonna go for this.

[01:05:56] Ramit: Is there a part of life where you're both really confident, like supremely confident, you don't second guess yourself?

[01:06:01] Ramit: Michaelaa.

[01:06:02] Mikaela: I feel like being a parent, I feel like I am a good parent, so

[01:06:07] Ramit: Wow, that's power. I love that. Okay. And Dave?

[01:06:11] Dave: Yeah, I would say finances, but also parent and And wait,

[01:06:16] Ramit: finances. What do you, what do you mean? You told me you second guess. You didn't tell your wife your income. You're planning bite based on logistics.

[01:06:24] Mikaela: I feel like saving for him is more saving.

[01:06:28] Ramit: Well, that's actually quite intriguing because in order to get to the next level of personal finance, you're actually gonna need to radically change your relationship with saving. You are actually probably going to be, become a failure at saving. That's really, really hard.

[01:06:46] Mikaela: Especially since we've been in this mindset for so many years.

[01:06:49] Ramit: Yeah,

[01:06:49] Dave: yeah. Even just you saying that the stress kind of mounts of like, oh, that's gonna be. Just different. Not seeing it kind of get socked away,

[01:06:56] Ramit: but you're actually going to build something amazing. What would it be for you, Dave? If you're gonna build something amazing in terms of your relationship with money, what would it be?

[01:07:05] Dave: If I'm building something amazing in terms of my relationship with money, it's being a better husband and parent in the freedom of finances.

[01:07:12] Ramit: Okay, keep going.

[01:07:14] Dave: So not worrying, not not limiting the experiences, not limiting date nights, not limiting vacations, not limiting things that, you know, I was blessed enough to experience myself as a kid, not limiting, or kids gimme the opposite.

[01:07:29] Ramit: I, I don't wanna hear what it's not gonna be. I wanna hear what it is gonna be.

[01:07:33] Dave: It's going to be being proactive in finding things to do with our family. Being proactive in scheduling weekly date nights. Just go to a fun cooking class or go bowling, do something that we used to do as like teens and fun and

[01:07:46] Ramit: great.

[01:07:47] Ramit: Here's how I would describe it. I want you to start using in. Uh, language that is intentional. So instead of saying, I am not going to, you know, wanna be stressed out by my, I don't care what you do not wanna do, we're taking that out of our vocabulary. We're gonna talk about what we do wanna do. What we do wanna do perhaps is I want to be consistent.

[01:08:09] Ramit: We are going to have a date night, every week, every two weeks. And each date night is going to be magical. Now, magical could be, we're gonna get a piece of cheesecake 'cause we both love cheesecake. It could be we're gonna go bowling 'cause we used to do it as kids. It doesn't have to be expensive. Once in a while it can be like, you know, really cool, perhaps a little over the top or extravagant.

[01:08:32] Ramit: But each is going to be magical and meaningful.

[01:08:35] Dave: Mm-hmm.

[01:08:36] Ramit: What do you think

[01:08:37] Dave: I'd want you to do? Things that show, um, you know, the people around us that we can have fun, like go to sporting events.

[01:08:47] Ramit: Like what can we get specific?

[01:08:49] Dave: Yeah. Uh, go to the World Cup would be awesome, I think would be awesome.

[01:08:55] Ramit: Okay. What else?

[01:08:56] Dave: Love to do a trip. Just the two of us at least once a year.

[01:09:01] Ramit: Great. And how about something more mundane? Something more day to day?

[01:09:05] Dave: I'd love to change out some of our rooms.

[01:09:08] Ramit: Okay.

[01:09:08] Dave: Some of the layouts, some of the furnitures actually get to decorating one of our rooms so that we can enjoy living in it versus just being a room that's got stuff in it.

[01:09:16] Ramit: Good. I like it. People who have money are decisive. What's the worst that happens? You get a headboard. You don't like, donate it, get another one. I'm not encouraging you to waste, but I'm saying at any system of any sufficient complexity, there's a little bit of waste. It's okay. Mikayla, what do you take away from Dave's responses?

[01:09:34] Mikaela: I feel like he wants to do these things, but I feel like he's still a little hesitant. Um, just 'cause there I see where he's trying to come from.

[01:09:46] Ramit: In your back of your head, both of you are gonna have a voice. I suggest, or I suspect telling you that's too expensive. We, we gotta start smaller. Like we don't need to do all this crazy stuff.

[01:09:55] Ramit: Nobody, especially me, is telling you you have to go and drop $150,000 on some crazy trip.

[01:10:01] Dave: I'm not saying

[01:10:02] Ramit: that.

[01:10:02] Mikaela: Yeah.

[01:10:03] Ramit: Bowling sounds amazing. I love bowling. Take money out of the first part of your thought process.

[01:10:12] Mikaela: No, that makes perfect sense. Number one should be we want to do this.

[01:10:16] Ramit: Ooh,

[01:10:17] Mikaela: this is fun. And that's, yeah.

[01:10:19] Mikaela: And number two, it's like childcare or are they coming? And then number three is money. Like it's not, yeah. We need to swap out these.

[01:10:27] Ramit: Number five, number eight is money.

[01:10:30] Mikaela: Yeah.

[01:10:30] Ramit: Okay. Um, I would like to talk about your rich life over the next three years. I'd like to do small and I'd like to do big. So I'd love to start off with your home day-to-day life.

[01:10:48] Ramit: What would a rich life look like?

[01:10:51] Mikaela: One thing I can think about is cleaning. Like, uh, last year right before we had the baby, I did a deep clean, like hired someone outside and it was amazing. We realized that with my bonus for the year, that I could essentially pay once a month for a cleaner. So we've been doing that the last year, which has been really nice.

[01:11:15] Mikaela: Maybe upping that to not just once a month, but biweekly.

[01:11:20] Ramit: I love that. Can, can I give you a little suggestion on this when we're talking about our vision and our rich life, let's start off by saying something like, imagine, I love that phrase. Imagine I wake up every Monday morning and our house is clean.

[01:11:37] Mikaela: Mm-hmm.

[01:11:38] Ramit: And what that does is allow us to feel it, see it, smell it. Notice that it keeps us out of the weeds. What else?

[01:11:46] Dave: I would love to have a proper office. This room slash bedroom slash stockpile of stuff room that I'm in every day is aggravating. Frustrating. I'd love to. What do you

[01:12:00] Ramit: want in this office?

[01:12:01] Dave: I'd love to have a better background. I'd love to have better lighting set up. Uh, I'd love to have a different chair that's better for me. I'd just love to have it feel like an actual office and utilize in a way that we are gonna utilize it day to day versus the once or twice a year that somebody comes to visit and stay with us.

[01:12:18] Ramit: Great. Back to you Mikayla. The

[01:12:20] Mikaela: closet has been on our to-do list for a couple years now. We just haven't gotten to it yet, but just like organization, get it to a place 'cause it's very outdated and we have not touched it since. It's just chaos in there. So it would,

[01:12:36] Ramit: what would it feel? I'm sorry. I'm getting lost in all the negative stuff.

[01:12:39] Ramit: Can you get me lost in the positive

[01:12:40] Mikaela: Imagine. Very organized closet with shelving and just clean, stress-free. Everything has a spot for it.

[01:12:53] Ramit: How would you feel every morning when you opened up the closet?

[01:12:56] Mikaela: I can find things easily and I'm in and out.

[01:13:01] Ramit: Yes. Great example. So one of the ways that you have in an interlocking way, uh, created a strategy to not spend any money is that you focus on the negative.

[01:13:12] Ramit: And I don't know if you notice, but people don't like to hear about the negative or talk about the negative. It just sucks. So you just go, ah, let's not even talk about this closet. It's been two years. You haven't done a thing. You could have that thing knocked out in seven days, but part of it is you actually have to start talking about the things you want unapologetically.

[01:13:31] Ramit: I want a closet, I want a clean house. We both work really hard and we make a lot of money. I want a clean house. I'm not gonna apologize for it. And you need to talk about what it would feel like. What would it mean to you? It would allow me to wake up on Monday and actually be ready to go to work. That means I'm not kicking freaking Legos outta the way.

[01:13:52] Ramit: Having a closet would mean I could finally see what I have to wear. That would feel so good. It would be the first thing that I do in the morning and it would set me up for the rest of the day. Isn't there a difference between those two examples? Negative and positive.

[01:14:07] Mikaela: Yeah, definitely.

[01:14:09] Ramit: Good strategy for you to implement both of you.

[01:14:10] Ramit: Gimme another one.

[01:14:11] Mikaela: I'm big on my coffee.

[01:14:13] Ramit: Mm-hmm.

[01:14:13] Mikaela: I want to get a new coffee maker that works properly.

[01:14:17] Ramit: Like what kind of coffee maker?

[01:14:19] Mikaela: Uh, right now we have a ninja, which is nice, but maybe not, I don't need an espresso machine or anything. Okay. But just like another elevated ninja or something along those lines.

[01:14:30] Ramit: And like what kind of coffee beans do you get?

[01:14:33] Mikaela: Uh, we just started. Buying a nicer brand of coffee completely and have noticed the difference. So I think now we're stuck in our ways of buying nicer, which is a good thing.

[01:14:44] Ramit: Yeah. Great. Can we shift to bigger ideas of a rich life? Mm-hmm. You mentioned travel.

[01:14:50] Mikaela: Yeah.

[01:14:51] Ramit: So first I'd like to understand this Euro trip.

[01:14:53] Mikaela: I've never been out of the us other than our honeymoon. So at, I would say probably at least a week and a half, two weeks. Um, we've talked about certain countries, but I'm open to

[01:15:06] Ramit: which, let's get specific.

[01:15:08] Mikaela: Yeah. Uh, we talked about Spain, definitely Portugal, Italy.

[01:15:14] Ramit: And

[01:15:15] Mikaela: I am big on historical artifacts and stuff, so I would love to see some older churches or, um, different historic sites. Um. Spain has great wine. We love wine, so I would love to do a wine tour. Those are a couple of mine.

[01:15:34] Ramit: I love that sounds amazing. Uh, Dave, you wanna add anything?

[01:15:38] Dave: Yeah, food. Uh, we both enjoy food, probably more so than going out and staying out and partying.

[01:15:44] Dave: Uh, but waking up in the morning, having a, you know, good breakfast and, and sitting and relaxing to enjoy the breakfast. Good coffee, Spanish coffee, some croquettes or some little foods to kind of pick at for breakfast. Uh, good lunch. I'd love to go to a, like a vineyard, do a lunch, and then a vineyard somewhere to explore.

[01:16:02] Dave: Um, but I think the food, finding a place centralized around a food we wanna try, whether it's a local, you know, tradition, style, uh, for that region. Okay. And maybe something specific for, you know, in, in Portugal.

[01:16:17] Ramit: Is this, is this the two of you or your kids as well?

[01:16:19] Mikaela: I am open for either, if it's two weeks, there's realistically no way we can go without them.

[01:16:25] Ramit: Mm-hmm.

[01:16:25] Mikaela: Um, but we have talked about bringing them on bigger vacations like Europe.

[01:16:30] Ramit: Well, could you bring anyone else with you to help with the kids?

[01:16:33] Mikaela: We could, but then I almost am like, well, I don't want it to be focused on the, like, I want it to be focused on our centralized family, but we could potentially invite my father-in-law since he is retired and then his girlfriend.

[01:16:49] Ramit: I see. You want to have time for, for you four.

[01:16:53] Mikaela: Mm-hmm.

[01:16:55] Ramit: But there's also something to be said for, Hey, we also want some time as adults, like the two of us. Yeah. Okay. So how do you reconcile all that? How do you make that work?

[01:17:05] Dave: Right now everything's focused around the kids. But for a vacation it would be planning two days where we don't have the kids.

[01:17:13] Dave: We get to do some exploration of historical sites. We get to Who has them?

[01:17:17] Ramit: Your dad?

[01:17:18] Dave: Yeah.

[01:17:19] Mikaela: We could invite his dad and his dad's girlfriend maybe for a portion of the trip.

[01:17:24] Ramit: Nice.

[01:17:24] Mikaela: Like the last four days and see if they could take them for a full day. And even if money was an issue that they didn't wanna spend.

[01:17:34] Mikaela: 'cause they have several trips coming up in the next year. Maybe we, that's the way we get them to want to come is, Hey, we'll pay for your airfare and hotel.

[01:17:44] Ramit: Great. Love it. We're getting creative now. Keep going.

[01:17:48] Mikaela: If we are bringing the kids, I would also like to focus on things that would be kid friendly that they might enjoy, like parks and stuff.

[01:17:56] Mikaela: They're huge on parks, finding parks and outdoor activities that they would enjoy.

[01:18:00] Ramit: Mm-hmm. How are you gonna find all this stuff?

[01:18:02] Dave: Yeah, I'm, as you're asking again though, travel agent, I don't think that's where I want to spend the money versus putting it to other experiences on the trip by using something like chat GBT or like a thousand places to visit before you die.

[01:18:15] Dave: That it's localized to Spain, Portugal, Italy, those kind of pieces to build that itinerary. Okay. So our planning is less stressful, less optionality, so it's less frustrating for McKayla to have to pick through a variety of options.

[01:18:26] Ramit: Dave, how much does a travel agent cost?

[01:18:28] Dave: I have no idea.

[01:18:29] Ramit: They cost zero. $0.

[01:18:33] Ramit: They make their money from commissions through the hotel and through excursions. I'm not saying you have to use a travel agent, that's up to you. I can tell you whether or not it would be a good fit, but the fact that you're already closing doors. It's quite revealing. I'm trying to actually get you to expand and gimme more ideas.

[01:18:52] Ramit: So here's how I would think about a trip at your income and net worth level. And with the constraints you have over young children, you want one-on-one time, but if you're going for like 10 days, they have to come one way or another. One, you can just go for a short amount of time, the two of you. So literally you go for four days, find somebody to take care of the kids, make it so easy for them, and you all are on your own, and at least you just have that time for the two of you.

[01:19:24] Ramit: And if you go, Hey, we'd love to do that, but I think Europe for four days would be a little tight. Maybe you take a two day trip for just the two of you somewhere close by in the us. Just do that. Get your feet wet, and then you can decide about Europe later. Okay, that's option one. Another option. I love what you said about bringing your dad, bring him.

[01:19:42] Ramit: Maybe he wants to come already happy, you're happy to pay for the flights and all that stuff. Great. And he can overlap. So maybe you take the kids for a couple of days. First, he then comes, has 'em for a couple of days, and then all of you are together for the last day or so, right? You really craft that emotional experience.

[01:19:59] Ramit: What do we want to feel? Yeah, we wanna experience Spain with our kids. They're our kids. We love them, and then we wanna hand them over for a couple of days so we can go do something cool. Beautiful. Um, you could think about your friends and or family. Maybe there are other folks who would love to come and they're perfectly happy to come for 3, 4, 5, 6 days.

[01:20:20] Ramit: And you're like, I'll pay for all your stuff. And you, you get like one day completely on your own, but we're paying for everything. They would love it. So think broadly. It's not just dad. There's a lot of people we have in our network. And then finally, there are at your income level, there are travel nannies.

[01:20:35] Ramit: There are actually people who can come with you. Either from here or you can hire them there and you can find them. Now, that involves a lot of trust and things like that, but I'm just opening up the possibilities for you. How does that strike you? I'm not asking for you to make a decision, I'm just saying how does hearing those options hit you, Mikayla?

[01:20:54] Mikaela: I think it's more options than I ever thought were possible. Um, especially the travel nanny. I never would've even, I know I've heard of it, I've seen it done before, but I've never thought of it for ourselves. I like the option, like, 'cause I love spending time with my in-laws. It's not, it's not me not wanting to spend time with them, but I do like the option of, Hey, we would love to experience this place with you that you guys also haven't been to.

[01:21:25] Mikaela: And we're open to like all expenses paid for your end. We just want your time.

[01:21:32] Ramit: Very generous. Yeah. I hope that as we're talking about this, you're actually getting more excited. Yeah. Because you go, oh my God. All these things that seem like insurmountable. There are a lot of solutions we can have. Mm-hmm.

[01:21:43] Ramit: It's just up to us to decide if we want to do this. Then the question's, just the details. Yeah. How long, who do we wanna take? All that stuff.

[01:21:51] Mikaela: Yeah. Yep.

[01:21:52] Ramit: How much do you think a trip like this would cost? Ballpark? I'm not asking you to even be completely accurate, but just ballpark.

[01:21:59] Mikaela: 10 to 12 K. I dunno,

[01:22:02] Ramit: this is two weeks.

[01:22:03] Mikaela: Yeah. 14, 15

[01:22:05] Dave: fifteen's fine with me. I would've said 12, but fifteen's fine with me.

[01:22:08] Ramit: Okay, cool. Look, I don't know the answer 'cause it depends on what you wanna do, where you wanna stay. Yeah. How you wanna fly, all those things, but

[01:22:14] Mikaela: mm-hmm.

[01:22:15] Ramit: What if it was 20 5K?

[01:22:16] Mikaela: I feel like as long as we get the experiences and do things that we want to do and make it fun, I'm fine spending that money.

[01:22:25] Dave: It's, it's high in my head, but I'm also looking at it as not a, not scrutinizing the budget and saying, we have to do this. I, I actually see this as we have to do this. We're on here for a reason. We talked to each other for a reason. We already made a plan, even without coming on here, that we were gonna do an international trip.

[01:22:42] Dave: Now it's a stop shutting of the doors. There's so many more options we hadn't thought about going into it. 25 is the number. 25 is the number. Put the money to it.

[01:22:48] Ramit: Damn, I think you guys are ready to, to start using your money for a rich life. I'm very impressed with both of your answers. That's really impressive, especially for the two of you.

[01:22:59] Ramit: I want to recognize that because that has been how you have been living for a long time, and so for you to be able to do that with this example, which is a big one, is really, really impressive. Can we go to your numbers? Mm-hmm. Your CSP. Can we make some changes to make these things inevitable? Mm-hmm. Are you down for that?

[01:23:24] Dave: Yeah. Yeah.

[01:23:25] Ramit: Okay, cool. So here we have your fixed costs at 60%. We have your investments at 17%. You're investing quite a bit, plus pre-tax. So almost 6,000 bucks a month approximately, which is extremely impressive. Your savings are at 13%. If you were to stop saving right now, I'm not saying you have to, it's your money, not mine.

[01:23:52] Ramit: But if you were to just turn off the savings that go every month, how would you feel about it, Dave?

[01:24:00] Dave: I'd wonder where it's going, but as long as there's a plan for it, I'd be okay with it.

[01:24:05] Ramit: What if there's not a plan?

[01:24:06] Dave: I'm uncomfortable with the amount of money we have in savings.

[01:24:09] Ramit: You're uncomfortable with it because you don't think you're getting maximum return on that money.

[01:24:13] Ramit: This is the wrong way to think about it. Again, I'm trying to systematically deconstruct the way that you think about money. I have a lot of money in savings. Okay. I like it because it allows me to sleep well at night. If something happens, I'm good. Okay. Am I losing potential return or yield? Yeah, that's the point.

[01:24:28] Ramit: It's supposed to be liquid. It's supposed to be there in case of emergency. You know when people were going through COVID early on, they had elderly parents, things like that. They were themselves immunocompromised and they would message me all the time. I have this emergency fund, but I don't know if I should use it to stay home from work.

[01:24:46] Ramit: I'm like, it is literally the defining emergency of our life and you are so concerned that you won't even use it to save your own life or your mom or dad's life. That's when you know personal finance has gone very, very wrong. And although we are not talking about life or death, we are talking about serious health concerns and we are talking about building a healthy relationship with money.

[01:25:10] Ramit: So the fact that you are. Concerned you have too much in savings, but only because of yield really shows how trapped you are by this view that I need to be optimizing all the time. What would you like to do about your CSP to make these things you talked about inevitable?

[01:25:30] Mikaela: I feel like the only place to really take out is stop allocating so much to investing every month.

[01:25:37] Ramit: Okay.

[01:25:37] Mikaela: And start putting it into a specified vacation fund.

[01:25:41] Ramit: Alright, let's do it. So vacations right now is at zero. Yeah. No surprise you have not taken a vacation a long time. It all makes perfect sense. Let's change it. How much you wanna put in vacations, Mikayla?

[01:25:50] Mikaela: Honestly, this might be a big jump, but since we're putting 1500 into savings every month, can we do at least a thousand a month?

[01:26:00] Ramit: Sure.

[01:26:01] Dave: 1500 I would say. Let's do 1500.

[01:26:04] Ramit: Wow. Nice God, this is so cool.

[01:26:07] Mikaela: Next year. I would love to not pull from our actual savings and like we do it. We do it now.

[01:26:16] Ramit: Okay guys, so I just took the 1500, I zeroed it out for your emergency fund and I switched it over to your vacation. Okay? You have 1500 bucks a month going towards your vacation.

[01:26:24] Ramit: Well done. That's awesome. So your vacation is gonna happen. When do you know?

[01:26:30] Mikaela: Let's say like end of summer next year before our oldest goes to kindergarten.

[01:26:35] Dave: Within the next two years. Yeah.

[01:26:36] Ramit: Here, lemme just tell you straight. When I'm rich and I, I don't wait. No way. I don't say like two years, five years, no way.

[01:26:44] Ramit: When, and we, you are in a big rush. Both of you have

[01:26:47] Mikaela: Yeah.

[01:26:48] Ramit: Health issues and all these things in your family. Why are you waiting?

[01:26:51] Mikaela: Yes. Say early summer, next year before, because our oldest goes to kindergarten and then we don't have to worry about school.

[01:26:58] Ramit: Beautiful. Six months. I think you need to put a little bit more than 1500 in, or you will just draw some out of your savings, which is totally fine.

[01:27:06] Ramit: Yeah. You have way more than you need in savings. You're investing 2000 bucks a month. Why don't we drop that to 1500? How about that? Mm-hmm. And then raise this to 2000. We're still good. Same thing.

[01:27:16] Mikaela: Yeah.

[01:27:17] Ramit: I honestly think you could go way down personally. I'm just gonna, just as an example, I'm, I'm hell, I'll go to 500 over here.

[01:27:24] Ramit: I would love for you to make those plans together. Mm-hmm. And it's not a question of are we going, we're going, we are a decisive couple. We have millions. We are gonna create these memories. So you've got the trip, you got the things in your home that you talked about. Fantastic. What else?

[01:27:46] Dave: Uh, date night, like

[01:27:47] Ramit: Yeah.

[01:27:48] Mikaela: Yeah.

[01:27:49] Dave: Date night every other week. And allocate 300 bucks for that.

[01:27:54] Ramit: Are you guys actually spending this guilt free spending money right now?

[01:27:57] Dave: It just kinda goes to like Target and Amazon. And

[01:28:00] Ramit: that's not guilt free, that's just,

[01:28:01] Dave: there's not really a guilt-free spending category because we

[01:28:03] Ramit: don't Yeah, no kidding.

[01:28:04] Ramit: That's why we're talking. I actually think you should just commit to using the $1,400 a month first

[01:28:11] Mikaela: on ourselves and not exactly store stuff that we need. Not diapers,

[01:28:17] Ramit: cleaning. Yeah, diapers don't count either. Cleaning person, that would be date night, every other week. How much is your date? Night?

[01:28:24] Mikaela: Two 50.

[01:28:24] Mikaela: Just 'cause that's sitter included.

[01:28:27] Ramit: Yeah. Great. You gotta include the sitter. How much does a babysitter cost?

[01:28:30] Mikaela: 20 an hour.

[01:28:32] Ramit: So that's like 60 bucks or something like that?

[01:28:34] Mikaela: Yeah, like 80.

[01:28:35] Ramit: 80 bucks. Okay, great. Perfect. So yeah, that sounds very reasonable. There you go. So you got that. Is there something about, um, a little self-care?

[01:28:44] Mikaela: I'll say a massage. Doesn't have to be,

[01:28:47] Ramit: don't tell me what, it doesn't have to be. Hey everybody. In my dream, it doesn't even have to be good. It doesn't even have to be a human being. A raccoon

[01:28:54] Dave: can push on my back.

[01:28:56] Ramit: I'm great. I'm so happy. I just want something to touch my back. We're not doing that.

[01:29:00] Mikaela: No. Okay.

[01:29:01] Mikaela: Massage monthly.

[01:29:03] Ramit: Thank you.

[01:29:04] Mikaela: As long as I get a cleaner every other week at week.

[01:29:07] Ramit: Great. You could do it all.

[01:29:09] Mikaela: Yeah.

[01:29:10] Ramit: All of this. This is not hard. You actually can do all of these things. And then Dave, what about for you? Is there something around self-care or something you enjoy doing? Oh God. Not this man thing again.

[01:29:23] Ramit: Oh, no. I just like to sit at home with my no new office.

[01:29:26] Dave: I enjoy golfing. Can't go every time. So hobbies of like playing a sport, which I do, uh, weekly, um, or golfing.

[01:29:34] Ramit: Okay. I love it already with like minor, just shifting money from here to there. We've already funded the vacation. It is now an inevitability.

[01:29:45] Ramit: So you will have many, many thousands of dollars for that vacation. And honestly, if you need to pull out an extra 5K from your savings, go for it. You have so much in there, it's fine. Um, you're still continuing to invest aggressively, which is very, very impressive. Do y'all know how much you're gonna have at retirement?

[01:30:02] Dave: 4 million.

[01:30:03] Ramit: Oh my god. This is gonna be the best moment of my life. Mikayla, how much do you think you're gonna have at retirement?

[01:30:10] Mikaela: I didn't even think as much as what Dave was saying. 2.5, maybe two.

[01:30:15] Ramit: So y'all have been saving aggressively for years and years without calculating how much you're gonna have?

[01:30:21] Dave: Not in a simplified manner, no.

[01:30:23] Mikaela: It was more so hitting the milestones of like paying the student loans off. Oh, we did that and then trying to hit Can I interrupt X number?

[01:30:31] Ramit: Can I interrupt you? As it currently stands, you will have $18.2 million when you retire.

[01:30:39] Mikaela: Yeah, I. I honestly don't, I don't want that. I want to use it throughout my life and not just hoard it at the end.

[01:30:48] Mikaela: What am I gonna do with 18 million?

[01:30:50] Ramit: I want you to process it for a second.

[01:30:54] Mikaela: I can't. That's, and

[01:30:56] Ramit: I, I want you to just listen. Dave is processing it. Dave, what's going through your head right now? I saw you really thinking about what I just said in taking it in.

[01:31:07] Dave: Honestly, it's going to come off the wrong way, but embarrassment.

[01:31:12] Ramit: Mm-hmm.

[01:31:13] Dave: And it's embarrassment of how little we've given to ourselves and those around us in the time that we've had an 18 million in retirement, what are we going to do pay for a cyber body? Like what could we possibly do? I don't think we have a plan to leave. Yeah. A wild legacy for our kids and like Sure.

[01:31:36] Dave: Some, some wealth, some generational wealth. Sure. But it's. It's almost like sad and embarrassing to say, why, why haven't we done this? Why haven't we committed to each other in this way?

[01:31:47] Ramit: I think that's a really powerful reaction, Dave. I, I really appreciate it. That's not easy to say. It's not easy for anyone, especially for men to admit that's something they have done.

[01:31:59] Ramit: Something that you have been in charge a lot of is embarrassing. So I think that takes a lot of courage. I really appreciate that. And Michaela, I noticed that you're tearing up. I'm curious why?

[01:32:11] Mikaela: Um, it just kind of goes back to I'm grateful for what we have, but like, I feel like I'm taking it in and realizing like, why am I so stressed about like, the day to day because I shouldn't be, I shouldn't even, like, it makes, it gives me relief too, just knowing like.

[01:32:38] Mikaela: Next year when I have to take care of my mom, like it, it's not gonna be stressful. Like why am I giving myself future stresses?

[01:32:47] Ramit: Yes.

[01:32:47] Mikaela: When the place that we're at right now, like it will all work out.

[01:32:54] Ramit: You have more than you'll ever, ever need, ever.

[01:32:59] Mikaela: And like I thought I had a rich life now in the like current present, without knowing those numbers.

[01:33:06] Ramit: Yes.

[01:33:07] Mikaela: Like the things that we could do long term for ourselves, for our children, for family is like, it's, yeah. It's way more than I thought possible at all. So

[01:33:24] Ramit: I wanna just make a couple of suggestions now, because as you get to see, you get to have these conversations in a totally elevated way. Number one, you don't have to wait until your mom gets even sicker to move her.

[01:33:34] Ramit: There you have the money, throw it. Towards her.

[01:33:38] Mikaela: Yeah.

[01:33:38] Ramit: There is nothing like being able to take care of your family, especially when you have the money to do it. Don't wait. Be overly generous. You will. As my wife says, she, she always reminds me, how do you wanna have a relationship with your family and your loved ones?

[01:33:52] Ramit: So if money's not a concern, which it's not, get the place right now when you're talking about a vacation. Go. Don't wait. Start with a staycation. Have somebody come and take care of your kids. Next time. Take 'em with you. Bring somebody with you or not. It's up to you. Go to a nice theme park or restaurant.

[01:34:10] Ramit: Don't think twice the cleaning every week. The closet. Have it done. The office set a deadline. It should be done within X months. Get it done. The Europe trip. Start to dream together. And if you can't plan all this yourself because it's the first time taking a trip in a long time, get some help. There's travel agents who do it for free and or you could pay somebody.

[01:34:29] Ramit: There's lots of options. The point is, lean forward in your rich life. Not back.

[01:34:35] Mikaela: Yeah.

[01:34:36] Ramit: I also wanna point out one last thing, a number that should be incredibly startling to you. If you stopped adding money to your retirement right now, you just went to zero, you took all that money, what is it? Around $6,000 a month and just spent it on freaking dinners and cleaning supplies, whatever.

[01:34:57] Ramit: You know how much you would have by the time McKayla, you turned 65. You wanna guess

[01:35:01] Mikaela: I'll go with my original number again, like 2.5?

[01:35:04] Ramit: No, you would have $9 million.

[01:35:08] Mikaela: That's wild. That still also seems like more than what we will ever need, so

[01:35:14] Ramit: yes it is. I can tell you from speaking to you, that is more than you will ever need.

[01:35:19] Ramit: So the point is, it is now part of your job to learn how to responsibly spend this money responsibly, meaningfully, but simply hoarding it. What do you want? 9 million, 12 million, 18 million, 36 million. None of it matter. It, it's irrelevant. No, I would rather you all set up a charity or start to give to your community.

[01:35:43] Ramit: There's so many things you can do, but seeing the surprise on your faces when I told you the number, a number, which by the way, you have been able to find out your entire lives, but because you were looking at the world through lenses of scarcity, it just never occurred to you to look for. And now just taking that off allows you to see the world is crystal clear and you can shape it the way you want it to be.

[01:36:08] Dave: Yeah, absolutely. It's, I, we did all this work to set us up for this point to have optionality.

[01:36:14] Ramit: Alex crushed it. That's what

[01:36:15] Dave: wanna do with it. You crushed,

[01:36:16] Ramit: you both crushed it. Like, can we just take a second and a round of applause? Please give yourselves a round of applause for what you accomplished. This is very, very impressive.

[01:36:26] Ramit: I do not see this that often.

[01:36:28] Mikaela: We are lucky, we are grateful, but we worked our butts off for this, so why don't we appreciate what we have and use it and create these memories.

[01:36:37] Ramit: Now, can I ask another question? Considering the fact that you two are wealthy and are going to be incredibly wealthy, how does that affect hearing that your wife feels like she's on autopilot and she's doing everything for everybody else?

[01:36:53] Dave: It's demoralizing a bit. It's almost like I've, I've failed in ways of being a, a great husband, a better husband than I could be. Um, one, I think it's, I think it's a recognition, appreciation and also understanding to allow me to step into it. Some of the small things she does in the morning, she's up earlier than I am getting us prepped for the day, and then at night she's, sometimes I'm working late, uh, because of the job and she's also settling the kids, hitting them down.

[01:37:23] Dave: What can I do to step into some of that, even if it is not the. It's a true action, but meal prep or if that's, Hey, I already have DoorDash. I already have this taken care of for the night. I'll do dishes. You sit down, enjoy a movie, enjoy a show.

[01:37:36] Ramit: Nice, nice, nice. I like this teamwork like, do you see how fun and empowering it can be to use money?

[01:37:43] Ramit: And I'm not saying waste it. I'm not saying that you gotta start spending a million dollars a day. That's not gonna happen. It's never gonna happen for the two of you. Never. But you could increase your spend by $5,000 per month and you would still have more money than you ever know what to do with ever in your entire lives and for your kids' lives.

[01:38:05] Mikaela: Yeah.

[01:38:06] Dave: I found that as we talked about the experience and the experience of the case, like this is an experience of daily life that we've sacrificed ourselves in for so long.

[01:38:15] Ramit: Yes. It's like y'all don't have to go to Disneyland to have a magical experience. You can have a magical experience at home every single day.

[01:38:23] Mikaela: Mm-hmm.

[01:38:24] Ramit: A clean house. Parents who are relaxed. I know you love your kids. I can tell by the way you talk about 'em, but parents who are relaxed,

[01:38:31] Mikaela: that's a big one. But yeah, this was even better than I imagined. I feel like we hit on things that we have unconsciously been struggling with for years and now bringing them to the surface.

[01:38:45] Mikaela: I feel like there's no other way to go back. It's more so how do we communicate better and work as a team to actually have fun in our life. Yes, like we've worked so hard for this. Now is our time to have fun. Have fun for our children, do things for my mom before things get worse. So it's just like so rewarding to realize that.

[01:39:12] Ramit: When I told Dave he was on track to retire with $18.2 million. Did you catch the word he used? He said embarrassed. Embarrassed. Let's talk about that. Embarrassed at how little they had given themselves. Despite having so much I thought that was quite self-aware. Embarrassment iss a very powerful feeling, particularly for a man.

[01:39:35] Ramit: Very powerful. Here's what I want you to take away from Mikayla and Dave. Scarcity is so powerful that it will talk you out of leggings without holes. It will talk you out of getting a cleaner or a vacation or an espresso machine. It will convince you that the number in your account is never quite enough and it will do all this so quietly you never think to question it.

[01:39:58] Ramit: In fact, it will convince you that you are being responsible, but what got you here won't get you there. What they needed was not a better spreadsheet. To put it very simply. They needed someone to tell them it was okay. They were okay, and they were going to be safe. As for McKayla and Dave, I don't expect them to transform overnight.

[01:40:20] Ramit: This is a incredibly difficult, transformational journey to go through from scarcity to abundance. It's really hard to do, but hopefully from going from level 10 scarcity to maybe level nine scarcity, level eight, scarcity to maybe level six scarcity, I do think they're gonna wake up one Monday morning to a clean house dinner, taken care of.

[01:40:45] Ramit: Kids are settled, and the two of them finally with a little space to breathe in that moment, my wish is that they look at each other and they think, why did we wait so long? That is when their rich life truly begins

[01:41:02] Dave: here. Ramit, uh, following up with the biggest surprise from the conversation, I think it's just how freeing emotionally leading with the vision.

[01:41:11] Dave: Really becomes, and how much more fun it is to talk about things rather than starting with the cost and fitting within the confines. Um, whether it's planning our rich life together or even vacations, uh, just the conversations a little bit lighter of a mood overall. Uh, my biggest takeaway is really just leaning into Mikayla's ideas a bit more as well.

[01:41:29] Dave: Uh, encourage it to be, you know, a little bit more fun and playful. Keeping Casa as really like a fifth consideration in things. And really, um, I think the biggest takeaway and probably the biggest area of work for me is also being very intentional with guilt-free spending and really respecting that too.

[01:41:45] Dave: Um, it's not an area that we've, I, I personally have put a lot of focus on. So the specific changes that I've decided to make and just our household is autopay bills, uh, specifically the mortgage. Uh, just so it's not something we log into every month, just kind of frees the mind and puts us to bigger, better plans.

[01:42:03] Dave: Um, I'm sure I'll still be logging in, but at least it's on autopay. Won't have to worry about setting up the next payment every 30 days. Uh, and then really being intentional about trip planning too. So setting aside that budget into a different account and just paying attention to the way that we speak about things, uh, and not using the word need, need, and also not leading with what things aren't.

[01:42:26] Dave: Uh, really try to emphasize the vision

[01:42:29] Mikaela: after the call. I feel like, uh, something that surprised me was definitely just how much we will end up having in retirement. I just never knew that number. Never thought it would be close to that. I knew that we were aggressively, um, saving in order to retire, so that was just a huge.

[01:42:54] Mikaela: Um, exciting surprise, but just, um, shocking the number 'cause I don't feel like we need that much for retirement. And then the biggest takeaway is realizing that we have definitely been kind of working together against ourselves in spending any money. We're so good at budgeting and, um, being conscious of the numbers that we're buying and the numbers on the shelf that it's kind of hindered us spending any money and enjoying the money on anything we want, especially trips.

[01:43:34] Mikaela: So, um, that was a big takeaway for me too. Be more conscious about, uh, what we spend. We have definitely talked about planning a vacation, um, the next steps we've told our family, so maybe we can try to invite them to get them to help us watch the kids and then spend the money on getting them over there with us too.

[01:43:56] Mikaela: So looking for next year,

[01:43:58] Dave: it's been three weeks since we last spoke with you and just wanna share some insights, uh, over the last three weeks that I've kind of noticed, um, McKayla and I, the conversations around anything around money we're quick to point out when we're talking about the negatives. Um, and really trying to make it a positive of, Hey, what do you want?

[01:44:16] Dave: And that vision and creative aspect rather than exclusion, uh, or cost focus, um, albeit very hard to change. A lot of things are still very cost conscious for us. Um, but it is is definitely led with a, a bit more of that future vision of what we want things to be like in our life. And I would say that's probably the biggest thing that stuck.

[01:44:36] Dave: Stuck with us over the last handful of weeks that I've noticed too. It's just a kind of playful banter we pointed out at each other. Uh, literally we'll point at each other as we're talking about things and say, Hey, you can't say need or can't say certain words. And I think that's really helped kinda refine what we want in our rich life.

[01:44:53] Dave: And also planning for vacation too. So look forward to giving you a future follow up.

[01:44:58] Mikaela: It's been three weeks since we spoke to Ramit and I feel like we've definitely tried to make some changes in our household, um, including myself. Um, I'm trying not to make the price of something, the first thing I look into on a purchase and the priority.

[01:45:16] Mikaela: Um, so it's definitely taking some getting used to, but I feel like I am trying to purchase things that I want not based off of. Am I getting a good deal or not? Um, I also have a deep clean scheduled with the cleaners, and then after that we'll have them be coming more regularly to our house to help me and take that lift off of me.

[01:45:40] Mikaela: But thank you again for the conversation. I feel like it was definitely a huge help for us to realize, to just enjoy life and we. Have the money to be able to do the things that we want and we don't have to just focus on saving, saving, saving. So thanks again

[01:46:00] Ramit: and I have a very exciting update because six months later, here's what they have to say.

[01:46:06] Mikaela: Hey Leigh, we just wanted to let you know that we actually did book the trip that we talked about on your podcast. We ended up going to Spain and we are currently in Valencia. Um, we did 10 days and when, yeah, 10, 12 days. Um, did Madrid, uh, Barcelona, Valencia, and then we'll end back up in Madrid. We did bring our kids, but like you recommended, we did invite some family to help us.

[01:46:36] Mikaela: Um. Just coordinate travel and then help let us get some days and dates in and um, dinners in. So that was very nice. Um, but yeah, we've been having a great time, um,

[01:46:50] Dave: done almost no museums, but looking at a lot of the architecture, eating food, not worrying about a bill or prices or anything. Uh, the kids have been spoiled with ice cream and churros every day pretty much.

[01:47:04] Dave: And coffee, um, coffee for us, it's been, it's been an exciting one. We've got a little bit more planned for the next couple of days. Uh, we've definitely looked back and we'll do a tour guide or something in the, in the future, uh, because I think it was a bit stressful leading up to it. And just kind of the coordination around metro versus taxi and matter of convenience here was, uh, definitely something that created additional stresses that we realized that we.

[01:47:30] Dave: Gonna put this on ourselves. So

[01:47:32] Mikaela: yeah,

[01:47:32] Dave: things a little change, but excited to see a couple of cities and make it happen. So

[01:47:37] Mikaela: yes, and we have you to think, because before this was always a what if, like wanting type travel. But now after the podcast, you definitely made us realize like, what are we waiting for?

[01:47:50] Mikaela: We have the budget and we were able to have the stream vacation and you've definitely changed our lives and how we think about our budget and just our rich lives and, um, not stressing so much over the money. So thank you again for that.

[01:48:08] Dave: Extra nugget for you. We're averaging 19,000 steps a day, so exploring a lot, and it's been awesome.

[01:48:15] Ramit: Listen up. If you want my help with your specific money questions. There are only two ways to get it. First, you can apply to be on this podcast at iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/money Coaching. In that program, you get access to live virtual events, monthly group coaching calls, live q and ass, and an amazing, huge community of other people like you.

[01:48:43] Ramit: Check it out at iwt.com/money coaching.