Episode #89: “He won’t marry me until I pay off my $15,000 credit card debt”

DJ and Adam, 37 and 33, have been dating for 3 years but DJ’s debt stands in the way of their potential marriage, as dictated by Adam, who’s been divorced in the past due to money issues. DJ recently doubled her income – and she has all the tools – but she’s frozen, unaccountable, and losing time.

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Tools mentioned in this episode

Show Transcript

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[00:00:00] Ramit: Big news. I have a Netflix show coming out. I would love for you to watch it. It’s called How To Get Rich, and you can go onto your Netflix account right now, search for my name and then click add to list. That way you’ll get notified the minute it goes live in April.

[00:00:18] Ramit: Why don’t you guys get married tomorrow?

[00:00:20] Adam: I don’t think that would be wise for my finances. And I’m sorry that that’s, I guess not a great sentence to say. That feels like a dirty sentence.

[00:00:29] DJ: I just don’t really quite understand how you get from being like putting things on credit and living paycheck to paycheck. Do you have to shut down your life for a year?

[00:00:41] Ramit: What if you did? 

[00:00:43] DJ: There are things I would have to say no to for years, maybe two or three years of saying no to things.

[00:00:50] Ramit: And do you want to do that?

[00:00:52] DJ: If it’s the only way Adam’s going to marry me, then yeah.

[00:00:55] Ramit: It’s like you have a bucket that has a hole in it and it keeps going down. You keep refilling it, but it keeps going down. And you start feeling hopeless. But you try and you keep going like this for a year, two years, five years. Paint the picture for me.

[00:01:13] DJ: And then you never have anything to show for it. 

[00:01:15] Interview: [Interview] 

[00:01:15] DJ: I have a scarcity complex. I always think what if I put too much on a credit card and then I don’t have enough for something else?

[00:01:22] Ramit: Like what?

[00:01:25] DJ: What if something happens?

[00:01:26] Ramit: You’re paying thousands in interest and your boyfriend won’t marry you. It’s happening right now.


[00:01:35] Ramit: Meet Adam and DJ. Adam has told DJ that if you want to get married, you need to pay off your credit card debt.  Now, it’s possible for her to pay this off even quickly, especially since her income just doubled. But she struggles in paying it off. By the way, she’s 33. He’s 37.

They live together in rural New York. I want you to pay attention in today’s episode to DJ’s explanations as I probe into why she hasn’t paid down her debt yet. At times she’s going to act oblivious as if she doesn’t know how to manage money. But at other times, she knows the exact tactics to use directly from my book.

So what’s really going on here? Why hasn’t she paid off her debt? Let’s find out. I also want to invite you to check out the video version of this episode on YouTube. I’ve been hearing that a lot of you love seeing the numbers breakdown of the conscious spending plan, which we put on screen for all of our YouTube episodes. 

So go over to YouTube, subscribe, search for my name, and you’ll be able to watch this full episode there. All right, let’s get into it. I’m Ramit Sethi, and this is, I Will Teach You to Be Rich.


[00:02:46] Ramit: There’s not really big disagreements anymore. It’s more, I know what you’re going to do, so I just let you do it. And I don’t want to fight over it because generally speaking, it’s your money, so you can spend it however you want to. 

[00:03:00] Adam: You spend a lot for Christmas. We wildly overspent for our New Year’s party, by the thousands. We shouldn’t have done that, but it’s okay. But when you overspend, I just shut up because you’re choosing how to spend your disposable income.

[00:03:17] DJ: Yeah. I don’t know that we necessarily fight or have disagreements about money. It is just that I do what I do and he does what he does.

[00:03:27] Ramit: What is your relationship? Are you married?

 Adam has told me that we can’t get married unless we have the money to do it, and part of that has to do with my credit card debt.

 How long have you had the debt?

[00:03:40] DJ: Probably my whole life.

[00:03:43] Ramit: I would want a new outfit every weekend to go out. So I would go to the mall and buy a new outfit.

Whose credit card was this by the way? Was it yours? You got one when you went to college? 

[00:03:53] DJ: Yeah.

[00:03:54] Ramit: Where’d you go to college? What area?

[00:03:57] DJ: New York.

[00:03:58] Ramit: Oh, so what’d you get? A Chase card?

[00:04:01] DJ: No, I had cards at stores.

[00:04:05] Ramit: Oh, fuck. 

[00:04:05] DJ: Express.

[00:04:06] Ramit: Express. Um, hold on.

[00:04:08] DJ: I had Express. 

[00:04:08] Ramit: I already know BB, um, old Navy.

[00:04:11] DJ: No, I didn’t have one of those. I had Express and Macy’s. And Express got really bad, crazy bad. I paid it off eventually. I think it was at probably four grand at the time. 

I graduated college and I became a elementary school teacher in a really high cost of living area.  And I lived off credit cards. I decided to get a new job, a better paying job, and I’ve had a better paying job for about two years now. Hmm. And as I work to pay it off, it just seemed like it comes back.

[00:04:47] Ramit: It seemed like or it seems like?

[00:04:50] DJ: It’s seems like every time I get ahead, something happens and I just get behind again. It’s been going up and down since I got a new job that pays me more money. I thought I’d be able to pay it off by now, and I just continue to tread water. It goes down a little, it goes back up. It goes down a little, it goes back up.

[00:05:14] Ramit: Okay. What do you think the problem is?

[00:05:17] DJ: It’s a choice whether I pay it off or not.

[00:05:19] Ramit: Why do you think you haven’t done it already? It’s been a long time.

[00:05:21] DJ: I think part of it was that I couldn’t before. I was making a lot less money and I couldn’t. I wasn’t making enough for rent and groceries. So it was hard, but I still, again, made the choice to live beyond my means, and that’s something I’ve just always done. So now that I have a better job and I live in a more low cost of living area, there’s no excuse for me not to be doing it. But I just can’t seem to find a reason why.

If I keep accruing debt, whether it’s taking vacations and putting this on a credit card or giving gifts and putting something else on a credit card, or just putting things on credit cards in general, no matter how much money I make, I don’t know that I’ll ever be able to get myself out of the hole.

[00:06:20] Ramit: Hmm. Okay. What do you know? You’ve told me a lot about what you don’t know. Tell me what you do know.

[00:06:26] DJ: I do know that I make more money than I used to.

[00:06:29] Ramit: Tell me the difference. What’s the numbers?

[00:06:32] DJ: I made $45,000 as a teacher and now I make $90,000 as an accountant executive. So I was able to double my salary by taking a calculated risk, spending a year working two jobs to get my foot in the door, and then getting a promotion to get a new job.

[00:06:49] Ramit: Wow. Congrats. That’s amazing. That’s really cool. All right.

[00:06:54] DJ: Thank you.

[00:06:54] Ramit: Well done. 90k is a great salary.

[00:06:55] DJ:  I used your graph that said you can go down and as long as it’s a risk, you end up on the other side. So I did that.

[00:07:03] Ramit: Well, hold on. For everyone listening, that’s not exactly what the graph said. Don’t think that if you just go down you come back up. Sometimes you go down and stay there. Everyone who’s in crypto knows exactly what I’m talking about. Anyway, we’ll get to that. 


Sometimes I worry about people taking away the wrong things from some of these episodes. You know how we all have a friend who goes through something bad and they take away completely the wrong lesson? They spend $5,000 on a vacation, they spend months getting friends together, planning out a trip, booking hotels, but when they get to the airport, they realize they don’t have a visa to go to the other country.

They lose all their vacation money. Their friends are stranded. And then you ask them, “Hey, what happened?” And they tell you this very long story and at the very end they go, so the lesson is never fly United. You’re just like, what the hell? 

I think DJ used my dream job program, or at least the chart from it, where I show you the curve of doing more before doing less. Meaning sometimes you have to work hard and put systems into place before you see the results. In her case, she doubled her salary, which is an outstanding result. And doubling that salary gives her a lot of power to be able to make financial changes. 


[00:08:12] Ramit: You doubled your salary. That’s transformative. How did it feel when you discovered that you had doubled it?

[00:08:20] DJ: I didn’t even realize it until I was filling out the conscious spending plan that I doubled my salary. It feels amazing, but it’s also really scary because, okay, I’ve doubled my salary. Is that even enough to support the lifestyle that I want?

[00:08:36] Ramit: What kind of lifestyle do you want?

[00:08:38] DJ: I want to be able to travel. I want to have a home, something that belongs to me, and I want to be able to buy clothes, get my hair done whenever I want.

[00:08:50] Ramit: Do you think that somebody on your income should be able to afford that?

[00:08:53] DJ: I think it depends on your values. Right now, I value going to get my hair done.

[00:08:58] Ramit: So you don’t value saving right now. Am I hearing that right?

[00:09:02] DJ: I value saving if I have a goal in mind. 

[00:09:05] Ramit: And do you value paying off your credit card debt every single month?

[00:09:09] DJ: If it’s important to Adam, then I care.

[00:09:12] Ramit: Well, why don’t you ask him?

[00:09:14] DJ: Adam, is it important to you that I’m debt free?

[00:09:18] Adam: You don’t have to be debt free. I’m not debt free. I have a lot of debts. But it’s important that you can manage your debts in a way that won’t drag us both down one day.

[00:09:29] Ramit: What did you just take away from that answer?

[00:09:31] DJ: That he sees me being in debt as a risk?

[00:09:34] Ramit: Mm-hmm. Okay. So what was the question you asked him?

[00:09:37] DJ: If me being debt free is important to him.

[00:09:40] Ramit: Uh-huh. And what do you think that he said just now?

[00:09:43] DJ: He said he doesn’t care if I’m debt free, as long as it doesn’t both drag us both down eventually.

[00:09:48] Ramit: Adam, it’s interesting she asked a pretty direct question, and your answer was quite indirect. Did you notice that?

[00:09:55] Adam: Yeah, a little bit. She knows my answers because I’ve been through this before. I am divorced and finances is one of the major roles that screwed it up the first time.

We were both working jobs that we didn’t like, so spending was our way to just feel better. And I don’t know if that what DJ goes through day in, day out. But for me, I was working a job many people would’ve dreamed about, and I was just so miserable. Spending was what got me by.

[00:10:26] Ramit: Mm-hmm.

[00:10:28] Adam: And then a wall hit where the credit cards were so high. It led to disdain for each other and fighting and eventually splitting up.

[00:10:37] Ramit: think that was directly responsible because of money?

[00:10:40] Adam: Money was absolutely one of the top reasons.

[00:10:43] Ramit: Yeah. So if that’s the case and you went through that, why would you not answer her question of, is it important for you that I’m debt free? Why would you not say yes? Unequivocally yes?

[00:10:58] Adam: Well, because I don’t think all debt is bad. I just think debt management is what’s important.

[00:11:04] Ramit: You got divorced because of debt and you don’t think debt’s bad?

[00:11:08] Adam:  Insurmountable debt that you can’t control is bad. Yes. If If debt is small and you pay off your cards monthly and–

[00:11:16] Ramit: Yeah. Is that happening right now with DJ?

[00:11:20] Adam: I think there’s some months you throw a lot of money onto credit cards and there’s some months that you would crack if you didn’t go on vacation. So generally yes and no. But I guess that means no.

[00:11:32] Ramit: Yes. It means no. What the hell is going on right now? How are my standards for your life higher than your own standards? Adam, I don’t understand. You got divorced primarily because of money and here she’s asking a simple question, is it important that I’d be debt free? I would be like, yes.

[00:11:51] Adam: I’m not in the largest of rushes to get married again, but I know how much she wants to get married again, and I would absolutely do it. But since it’s not my thriving goal, I have a lot of caveats to get there.

[00:12:06] Ramit: Let’s hear them.

[00:12:07] Adam: Money management and very low debt is absolutely one of them.

[00:12:12] Ramit: Uh, Adam, when you say money management, what does that mean exactly?

[00:12:17] Adam: Well, we know exactly how much money she has every month after bills. And then to me, money management is what do you do with the extra?

Some months it goes entirely on the credit card. And then some months, if she didn’t take a trip, she would have a breakdown. But then there’s months she’d have a breakdown anyways because of the debt. So it’s lose-lose.

[00:12:39] Ramit: Wow, you guys really painted yourself in a nice little, uh–

[00:12:42] DJ: Isn’t it a beautiful place?

[00:12:44] Ramit: Well, you both just are like, I don’t know. You do it. And then the other person goes, I don’t know, you tell me what you want. And you both just circle each other like you’re magnets just circling. But you never actually touch.


[00:12:58] Ramit: This reminds me of me and my middle school dance just standing to the side. Skinny little Ramit circling, thinking of asking this girl to dance. My crush over there doing the same thing. Circling, thinking about if I was going to ask her to dance, and this just goes on forever. Okay. That’s what I tell myself, but in reality, I don’t actually think anyone was circling me. So that is exactly what’s happening for Adam and DJ, though.

She asks a question, making a bid for attention and affection, and he brushes it off, which confuses her, and they stay stuck circling each. Lots of possibilities here. Maybe he doesn’t actually want to get married. Maybe he feels uncomfortable telling her what to do. Maybe he’s seen how she reacts to certain feedback, so he’s decided to hold back.

Who knows? All I know is that this isn’t working. One thing I’ve picked up, one clue is that DJ talks about herself almost as a person she cannot understand. She essentially says, I chose to overspend when I was making less, but I figured when I made more, I would change. But now that I’m making 90k, I can’t find a reason to change.

Did you catch that? This is the classic idea that many of us have that we are rational robots. That if we somehow find ourselves in a new situation or we find a magical reason, we will suddenly change. In my experience, I’ve found that to be the wrong way to look at the world and ourselves. In reality, change comes from a series of behaviors and attitudes. Listen to what I mean.


[00:14:35] Ramit: Can I say something, DJ?

[00:14:37] DJ: Sure.

[00:14:37] Ramit: You said that you want there to be less emotions, but your entire view on money is emotional.

[00:14:47] DJ: Is everybody’s or is that just me?

[00:14:51] Ramit: Everybody feels emotional towards money. Most of us were raised to think that emotions are weakness, especially men, and that they’re often thought of to be frivolous. We all, even the people who deny they feel emotions towards money, we all feel it in one way or another. It might be the ability to go and get the nice sourdough bread from the grocery store, or to be able to leave a little gift for your niece, or to be able to get your hair done.You might feel true joy getting your hair done.

We all feel emotions about money. I do. You do. We all do. It is so fascinating to me that although almost everything you’ve talked about today is emotional, you believe that you need to become less emotional about money and create an Excel sheet instead. Do you find that interesting?

[00:15:47] DJ: So you think a non-emotional solution to an emotional problem is not going to work. We need an emotional solution to an emotional problem.

[00:15:59] Ramit: Correct. And I don’t even think you have even knocked on the door of what the real problem is. I think it’s comfortable to say, I need an Excel sheet. Watch this. How many Excel sheets do you have?

[00:16:13] DJ: Lots.

[00:16:13] Ramit: What a surprise. And has that worked?

[00:16:16] DJ: No.

[00:16:17] Ramit: Wow. I’m shocked. Maybe if we get one more Excel sheet that’ll solve it. What do you say?

[00:16:24] DJ: Maybe if it has different functions in it.

[00:16:27] Ramit: Yeah, maybe. Listen, I don’t know any of those functions. All right. I use the most basic shit on Earth. My wife looks at my Excel sheet, goes, what the fuck did you do? I go, I don’t know how to make this look good. Can you help me? Let me tell you. It’s like when couples are fighting, you go out to dinner with them, they’re like sniping at each other, and then a week later they go, we’ve been fighting a lot. 

I really want to apologize for dinner. We’ve decided to buy a puppy. That’s going to solve our problems. And you’re just like, what is wrong with you delusional weirdos? Do you see that they are trying to solve one type of problem with a totally different solution?

[00:17:09] DJ: Right. 

[00:17:10] Ramit: That’s what’s going on here.

[00:17:11] DJ: Okay.

[00:17:12] Ramit: All right. So stick with me on the emotions

[00:17:15] DJ: Okay.

[00:17:16] Ramit: Tell me how you were raised when it came to money. Were you the only daughter?

[00:17:22] DJ: No. I have an older sister and she’s really good with money.

[00:17:25] Ramit: Okay. How many other kids?

[00:17:27] DJ: That’s it.

[00:17:28] Ramit: Two of you. All right. Tell me how you were raised with money.

[00:17:31] DJ: My mom takes care of all the money. My dad would pay my mom every week and then my mom would take care of all the bills and everything.

[00:17:43] Ramit: Did your dad work? Did your mom work?

[00:17:46] DJ: Yeah, they both worked. Middle class. My mom worked in a factory, so she worked shift work. She worked really hard. And then my dad just had a normal job where he was middle management for a while and now he makes pizzas. He was a pizza guy.

[00:18:05] Ramit: Okay. How would you say their financial situation is now?

[00:18:10] DJ: I would say that my mom is still pretty effective with money. My dad is very old school, still doesn’t even have a credit card, debit card. Operates cash only. 

[00:18:21] Ramit: And do they have enough?

[00:18:25] DJ: Yeah, they do.

[00:18:28] Ramit: How’d they do that?

[00:18:30] DJ: My mom did a lot of investing, and she has a really good pension. And she just worked and saved and I’m not sure how she did it, honestly.

[00:18:44] Ramit: What do you remember them talking about when it came to money as a kid.

[00:18:48] DJ: My mom would just figure it out. If my dad didn’t pay her on time or something, then there would be a hot topic of conversation. But eventually she got a calendar out because he would be like, I paid you, and she would have to look at the date on the calendar.

[00:19:06] Ramit: Why was he paying her? Can you explain that to me?

[00:19:09] DJ: She’s just always managed all of the finances.

[00:19:13] Ramit: Why not have a joint account?

[00:19:15] DJ: I don’t know that she trusts him with money.

[00:19:18] Ramit: Tell me more.

[00:19:20] DJ: My dad, uh, enjoys gambling.


[00:19:26] Ramit: Are you hearing this? I’m trying to get to the root cause of DJ’s, issues with money and she saves her dad’s gambling problem until basically the end of her story. 


[00:19:38] Ramit: Tell me more about your gambling dad.

[00:19:42] DJ: He just likes to gamble. So growing up my mom just made sure to do all of the money things in case my dad would gamble it.

[00:19:52] Ramit: And did he ever gamble his money away?

[00:19:55] DJ: Yeah. Often.

[00:19:56] Ramit: Okay. And what would happen then?

[00:19:58] DJ:  My mom would have to take care of it, pick up the slack in some way.

[00:20:03] Ramit: Okay. Did it affect you as a kid?

[00:20:05] DJ:  Not really. She was pretty good at shielding us from it. Sometimes my sister would have to hold the money or something.

[00:20:15] Ramit: How old was your sister when she had to do that?

[00:20:17] DJ: Oh. Probably early teens. My sister still is very good at– we call her the bank. If we need to put money somewhere, she’ll hold it and will keep it safe.

[00:20:31] Ramit: So at the age of 13 or 14 she was sometimes holding the family money so that your dad wouldn’t take it to gamble it away.

[00:20:40] DJ: Yeah. And I really hope he doesn’t watch this, but yes, that’s exactly what happened.

[00:20:46] Ramit: What would he say if he was watching this?

[00:20:48] DJ: Oh, I don’t know. Probably make up an excuse. But yeah, he was pretty bad at gambling for a while. I think he’s gotten better, but still probably frequently gambles, scratching tickets, scratch off tickets and stuff.

[00:21:01] Ramit: How many tickets a month?

[00:21:03] DJ: Oh, I wouldn’t want to know.

[00:21:06] Ramit: Like more than 10? More than 20?

[00:21:08] DJ: Oh, yeah. Probably a couple a day.

[00:21:11] Ramit: I often talk about money with my mom still.

What does she say?

[00:21:15] DJ: She loves to talk about money. She just is very positive and tries to figure it out with me.

[00:21:28] Ramit: Mm-hmm. Does she help you in your financial situation?

[00:21:33] DJ: When I was a teacher she used to send me money if I needed it, gas money or something like that. She still pays my cell phone bill.

[00:21:41] Ramit: Today?

[00:21:43] DJ: Yeah.

[00:21:43] Ramit: Okay. And when she sent you that gas money, how would she send it? Would it be a check, online transfer, what would it be?

[00:21:49] DJ: She would put it on a credit card so that I could use the money.

[00:21:53] Ramit: You mean a debit card?

[00:21:55] DJ: Yeah. No, a credit card. I would have a credit card. My credit card would be close to the limit. My mom would put money on it so that I could use some of that.

[00:22:04] Ramit: When you say she would put money on it, she would pay off part of your debt so that you could keep spending on it.

[00:22:10] DJ: Yeah. 

[00:22:11] Ramit: I see.

Adam, you’re listening a lot of this. Has anything surprised you so far?

[00:22:17] Adam: It clicked for me when we were talking about how she was raised with money. I never thought about how you view money as a child can affect you later on.

[00:22:27] Ramit: Hold on. You never thought of that. Have you listened to this podcast before?

[00:22:30] Adam: No.

[00:22:31] Ramit: Oh, okay. All right. Go on.

[00:22:33] Adam: Sorry.

[00:22:33] Ramit: That’s okay. 

[00:22:34] Adam: That resonated because I never tried to think of the origins of the problems. And if it’s just that something like this would’ve been instilled in her since the beginning, then I feel like I get upset about the stuff sometimes and it’s not your fault if these are values instilled with you before you had a choice to make that choice about it.

[00:22:57] Ramit: What was the value that you heard being instilled in her as a kid?

[00:23:00] Adam: Oh, just from her father’s point of view, being so loose with money. I knew he was a gambler, but I didn’t look at it from that perspective before that if you watch someone be bad with money you could pick up some of those habits.

[00:23:15] Ramit: Mm-hmm. Okay. Good. That’s a good realization. DJ, do you remember any phrases that your family used with money when you were growing up? Often when people say, we can’t afford that. That’s a very common one. Or money doesn’t grow on trees.

[00:23:33] DJ: No. So for example, if I was told that I couldn’t get something, I would go on a mission and find a way to do it. So I really liked this dollhouse I had when I was a little kid, and I would always want refills for the dollhouse. So it was like, you could get a little car or a little kitchen set, and I think there were maybe five or $6 Fisher Price.

And my mom would say like, no, we don’t have any money for a refill. And I would go around the house and I would dig up change under couch cushions, in drawers. And I would collect the money and I’d be like, here’s my little ziploc bag of coins. Let’s go to the store. And she would take me.

And that’s just how it’s always been. So if I was told I couldn’t afford something, I was just really bad at taking no for an answer and I would find a way, whether it was doing chores. But I really feel like a lot of it was just finding it.

[00:24:36] Ramit: I would just go find it.

When was the last time you did that?

[00:24:41] DJ: To go to find money?

[00:24:43] Ramit: No. It doesn’t have to be under the couch cushions. When was the last time you were told you can’t afford that and you still did it anyway?

[00:24:52] DJ: Oh. I feel like that happens pretty often. I don’t know that necessarily it’s anybody telling me I can’t afford it, but I know in my head I can’t afford it.

[00:25:04] Ramit: When was the last time?

[00:25:07] DJ: Probably Christmas.

[00:25:10] Ramit: And, uh, in January, where’d you go?

[00:25:13] DJ: January, I went on vacation with my mom to Hawaii.

[00:25:17] Ramit: Who paid?

[00:25:18] DJ: My mom did.

[00:25:19] Ramit: Did you pay for anything out there?

[00:25:20] DJ: I paid for some Ubers.

[00:25:23] Ramit: So December, Christmas, you spent some money on Christmas gifts, holiday, et cetera.

[00:25:30] DJ: Yeah.

[00:25:31] Ramit: Even though you “couldn’t afford it”. What does, couldn’t afford it mean to you?

[00:25:36] DJ: It means you don’t have the cash.

[00:25:38] Ramit: Where?

[00:25:40] DJ: You don’t have the cash, you have to put it on credit. You can’t afford it. You’re putting it on credit.

[00:25:44] Ramit: Wow, that’s pretty interesting. Do you know that your definition is totally and completely different than mine?

[00:25:50] DJ: What’s your definition?

[00:25:52] Ramit: I have different definitions for a variety of affording it things. For example, I would never get into the position of not having the cash for something. So for me, it might be, I’m not going to have, let’s say, three months of an emergency fund. In my case, I prefer a year worth of emergency fund.

If I’m going to go below that, I go, I can’t afford that. If I were going to buy something and it might rebalance my portfolio in a way that’s not good, it’s off balance, I might go, uh, I don’t think that’s good. But mostly it’s that example where I wouldn’t get down to talking about how much cash is left in my checking account. I don’t want to get down in my car to the last ounce of gas. I’m out of gas well before that. What do you think about that?

[00:26:52] DJ: But how do you get to that point where you’re thinking about having an emergency fund and having investments and having savings? How do you get from paycheck to paycheck to 12 months of an emergency fund?

[00:27:08] Ramit: 

[00:27:08] DJ: What is that path?

[00:27:09] Ramit: Okay. First off, you don’t need 12 months. That’s just me. That’s my personal choice. Most people have, well, most people don’t have much, but we’re not comparing ourselves to most people. We listen this podcast, so we are more financially savvy than the average. So we’re going to say we’re going to have three to six months of an emergency fund. Okay. How you get there, you tell me. What’s the path for you?

[00:27:33] DJ: Like Right now I put 10% of my paycheck into savings every month, but that’s not growing that fast. 

[00:27:41] Ramit: I’m looking at it right now. That’s several hundred dollars a month. 

[00:27:43] DJ: Yeah.

[00:27:44] Ramit: How do you feel about that?

[00:27:46] DJ: It could be better.

[00:27:48] Ramit: Well, I could be 6’4 and have an Australian accent, but I don’t.

[00:27:53] DJ: I just don’t really quite understand how you get from being like putting things on credit and living paycheck to paycheck. Do you have to shut down your life for a year?

[00:28:07] Ramit: What if you did?

[00:28:10] DJ: I feel like we just did that.

[00:28:13] Ramit: You shut down your life?

[00:28:15] DJ: Oh yeah. During the pandemic, absolutely.

[00:28:18] Ramit: So what happened to the debt during that time?

[00:28:20] DJ: It went really low.

[00:28:22] Ramit: And then?

[00:28:23] DJ: And then the world opened back up.

[00:28:26] Ramit: And then?

[00:28:26] DJ: And then it went high again.

[00:28:28] Ramit: Is that normal?

[00:28:31] DJ: Is it normal for what? For there to be a global pandemic?

[00:28:35] Ramit: Is it normal for you to go higher on your debt?

[00:28:40] DJ: No, it’s just been staying at the same number for what feels like forever. 

[00:28:44] Ramit: Mm-hmm.

[00:28:45] DJ: I look at my spreadsheet and it’s just like 14,000, 17,000, 14,000, 11,000, 19,000, 13,000.

[00:28:55] Ramit: Mm-hmm. And you know why is, right?

[00:28:58] DJ: Because I keep putting money on it and don’t pay more than I put on it.

[00:29:03] Ramit: Yeah. And you have a 28% interest rate.

[00:29:06] DJ: Yeah.

[00:29:09] Ramit: So it feels like it’s staying at the same number because it is staying at the same number. It’s like you have a bucket that has a hole in it and it keeps going down. You keep refilling it, but it keeps going down and you start feeling hopeless. Oh my God, I’ve been doing this for years and years. And even when the bucket went– I filled it up with COVID, now it’s going back down again.

That’s actually what’s happening because there’s a hole in it. So your solution has been to just keep dumping, keep trying harder, but you could do that for the rest of your life. You doubled your income. Has it changed the way you feel about money?

[00:29:54] DJ: No. Makes me panic more.

[00:29:58] Ramit: Why is that?

[00:30:01] DJ: Because at least before you could be like, well, I don’t make any money. No wonder I’m in debt.

[00:30:05] Ramit: Yeah. And now?

[00:30:08] DJ: Now it’s like, holy moly, I’m working my butt off, I’m making money and I’m still in debt. How embarrassing.

[00:30:19] Ramit: So what do you think is the real issue?

[00:30:21] DJ: Do I consolidate them and then swear off credit cards forever and–

[00:30:28] Ramit: Hold on. I don’t want to know– no, I don’t want to talk about solutions. You don’t even know what the problem is yet. Adam you’re over there nodding a lot. What’s going on through your head?

[00:30:38] Adam: I’m just hearing a lot of conversations we have already. It’s nice not to be the one having them to be on the outside and to see that sometimes DJ will have a different reaction to things if it’s not coming from me. So that’s nice.

[00:30:52] Ramit: What is the reaction normally when you are having a conversation with her?

[00:30:56] Adam: I guess reaction is the wrong word. I guess, ideas may resonate differently coming from someone else.

[00:31:01] Ramit: Well, that’s the, uh, that’s the greatest irony of relationships of all, isn’t it? You’ll be sitting there telling your partner something for 50 years and then you bring in some random guy, in this case, me, and he says one sentence, and they’re like, that’s really smart. I’m like, I’m going to kill you. That’s a healthy relationship right there when you threaten homicide with each other once or twice a week. Good relationship. All right. Adam, what are you feeling?

[00:31:28] Adam: Ooh, that’s hard. Um, I’m feeling a little stress or anxious because I’m not sure if DJ is going to find– she’s prodding for, how do I set up an Excel sheet and you’re prodding for what’s the route?

[00:31:47] Ramit: Mm-hmm.

[00:31:48] Adam: And we’re still on that hitting the, we’re not in the same page still.

[00:31:52] Ramit: I agree. Would you agree, DJ?

[00:31:55] DJ: Yeah. I know we’re expecting some big breakthrough, but really I just want to live a rich life. That’s all.

[00:32:06] Ramit: If want to rich life, then why are you narrowing down towards some Excel spreadsheet or some automation?

[00:32:15] DJ: Because I think about it so much I just want to think about it less. I want it to happen automatically so that the emotions are taken out of it and I can finally reach my goals. If I see less of my paycheck hit my account and it goes straight to my credit cards, and then in a year I have less debt, that would be amazing.

[00:32:44] Ramit: Your mom, you mentioned that she told you have to get a job. Did your mom ever tell you should save some money?

[00:32:50] DJ: Only if it was for something.

[00:32:53] Ramit: Hmm. Did she ever save money just to have a savings? 

[00:32:56] DJ: Yeah. She saves, my sister saves. I just don’t save.

[00:32:59] Ramit: Why did your sister get the message and you did not?

[00:33:03] DJ: I have no idea.

[00:33:05] Ramit: 

[00:33:05] DJ: I really don’t know. She was just always good with money. So she got the label, good at saving, didn’t spend.

[00:33:18] Ramit: That’s good?

[00:33:19] DJ: That’s good.

[00:33:20] Ramit: Okay. Look at me. Am I good with money or bad with money?

[00:33:25] DJ: You are excellent with money

[00:33:27] Ramit: Yeah. I am. I’m fucking good. Do I spend?

[00:33:31] DJ: Yeah, but only because you know you have your savings here and your investments here and everything here, so then you spend you spend on the things that you value too. You don’t spend on stupid stuff.

[00:33:45] Ramit: I agree. Everything about that is correct. Do I spend a lot on the things I love?

[00:33:50] DJ: Yeah.

[00:33:51] Ramit: Yeah, I do. 

How can I be good with money, but also spend a lot?

[00:33:59] DJ: Well, you’ve made your money work for you in ways that you can have enough to do both.

[00:34:04] Ramit: I agree. And do I worry about money a lot?

[00:34:07] DJ: No.

[00:34:08] Ramit: No. 

[00:34:09] DJ: Because it’s automated, but it’s not an Excel sheet. Oh.

[00:34:12] Ramit: It doesn’t matter if it’s an Excel sheet or not. It doesn’t matter. I do have an Excel sheet. I have a couple of different documents, but I like to keep it as simple as possible. Sometimes I have a plain text document just to write down a few things. That’s it. It’s very simple. So I think that’s interesting. It’s a bit of a redefinition. You said that your sister is good with money because she doesn’t spend a lot.

[00:34:39] DJ: Well, she does spend a lot though on things that she cares about. She’ll go to K-pop concerts and spend thousands of dollars on tickets to go see BTS.

[00:34:51] Ramit: Okay. 

[00:34:52] DJ: But it’s because she has it accounted for. I’m sure. I’m sure she’s not going into debt buying K-pop concert tickets, but I would.

[00:35:02] Ramit: Are you good with money?

[00:35:04] DJ: No.

[00:35:05] Ramit: Why?

[00:35:07] DJ: Because I don’t take into account the things I need to save for before I spent.

[00:35:13] Ramit: Okay. Why?

[00:35:14] DJ: Because I live in the right now. And also because I didn’t make very much money for a long time, so it was impossible to even do anything. 

[00:35:31] Ramit: That’s not true.

[00:35:32] DJ: So I just threw it all out the window.

[00:35:35] Ramit: I don’t think that’s true, and I think that’s a story you tell yourself.

[00:35:39] DJ: Okay.

[00:35:41] Ramit: I think it’s really important to really dig into that. Were there other teachers around you making similar incomes?

[00:35:49] DJ: Yeah. And one just paid off all her debt.

[00:35:52] Ramit: Wow, that’s shocking.

[00:35:53] DJ: By getting a new job.

[00:35:55] Ramit: Mm-hmm. Like you.

[00:35:57] DJ: Like me. Yeah. And she just paid off all her debt. I don’t know what she did after she finished teaching to get her to that point, but I’m really proud of her.

[00:36:08] Ramit: Well, how she got there is not the important part. She changed jobs, presumably made a little bit more money, and paid off all her debt. You make a lot more money than you used to. You haven’t paid your debt off. In fact, it feels stuck. What’s the difference?

[00:36:26] DJ: Well, I feel like last year was a learning curve. How do I operate while making more money, and how I operated was poorly. I didn’t do the right things with my money. I took a lot of vacations. We went a lot of places last year.

[00:36:42] Ramit: When was the last time you said no to something because of money?

[00:36:46] DJ: I say no to people often because of money. I get invited to go places a lot and I say no.

[00:36:54] Ramit: What do you say?

[00:36:56] DJ: Work is really busy this month. I have to stay home. I have to work. Or I have too many things coming up next month. That this month I can’t go anywhere.

[00:37:07] Ramit: You face a hundred plus decisions every week when it comes to your money. Should I order this type of food? Should I get my hair done? Should we go on this trip? Should we go see this movie? Whatever There’s a lot.

[00:37:19] DJ: Yeah.

[00:37:19] Ramit: I’m trying to understand your philosophy for how you decide if you’re going to say yes or no to something.

[00:37:25] DJ: Does it sound easy and does it make sense, and does it make me and or the people I love happy?

[00:37:34] Ramit: Okay. Anything about the money in there?

[00:37:37] DJ: Yeah. If it’s an exorbitant amount of money, I will say no.

[00:37:42] Ramit: What’s exorbitant?

[00:37:44] DJ: I would say if the flights seem unaffordable. If the flights are more than $350 round trip, I think that’s too much. And if the hotel is more than $300 a night, that’s too much.

[00:37:58] Ramit: Okay.  Interesting question. Were those numbers the same when you made 45,000 versus now?

[00:38:04] DJ: Yeah.

[00:38:05] Ramit: Yeah, I thought so. What does that tell you?

[00:38:08] DJ: That I have rules about money that have nothing to do with how much money I’m taking in or going out.

[00:38:16] Ramit: That’s correct. They’re more like this. It’s like you lick your finger and put it up in the air and say like, which way? What’s the vibe today? And a lot of times those vibes are created when you’re 21, 22, 23.

[00:38:31] DJ: Right.

[00:38:32] Ramit: The decisions you’re making are highly uncorrelated to how much money you actually have. And the reason for that is that you don’t actually think about this money as real. It actually does not affect you in any real way. If you have $14,000 in credit card debt or 6,000, did it actually change your lifestyle at all?

[00:38:53] DJ: Right now, no, it doesn’t. It’s not like when I was in my 20s and I had to go pick up an extra shift or overcharge my credit card because I couldn’t put gas in my car. I will be able to afford– if there was a disaster tomorrow, I have availability to buy myself groceries and I will be okay.

[00:39:13] Ramit: Okay, let me ask that question again because I’m glad you–

[00:39:15] DJ: No, it does not affect my life in any real way, whether I have this debt or not.

[00:39:19] Ramit: So that’s why. That’s why you behave the way you do with money because you’ve had no consequences, there’s no action. You’re basically subsidized against having any real consequences. To put it another way, what do you care if you have 5,000, 15,000 or $25,000 of credit card debt? You don’t feel it whatsoever.

[00:39:41] DJ: But it’s not right. It’s not the right thing. It’s not something to be proud of though.


[00:39:50] Ramit: There it is. DJ is a believer. She believes that everything will eventually be fine. She lives for today and she faces no real consequences. She’s developed these very simple views of money. She says, spending money is bad, but when I dig in, it becomes clear there’s a lot more nuance. And when I point out to her that she’s faced no real consequences, her responses, “But it’s not right.”

That sounds true. It may be true, but it’s not a powerful enough reason to actually change your day-to-day behavior. Keep in mind that DJ read my book 10 years ago. She’s familiar with my material, but when certain questions come up specifically about her behavior, she dodges them, always going back to her Excel spreadsheets as a safety blanket.

Listen as she brings up the idea of an emergency. She’s going to tell me, gosh, if I stop using my credit cards, what happens if I have an emergency? This is simply another logical dodge from what is really a psychological and emotional issue.


[00:40:58] DJ: I have a scarcity complex. I always think, what if I put too much on a credit card and then I don’t have enough for something else? What if there’s an emergency though and I need cash for something.

[00:41:11] Ramit: What if you get paid the next month? You have money sitting in a savings account. You have lots of options.

[00:41:20] DJ: So automate, pay a certain amount per paycheck to my credit cards.

[00:41:26] Ramit: Yeah.

[00:41:27] DJ: Start there.

[00:41:28] Ramit: Yeah. But you knew that. You knew that 10 years ago from Chapter 5 of my book. It’s not a solution problem.

[00:41:38] DJ: Okay.

[00:41:38] Ramit: You already knew that. And you have your Excel sheets and you’ve run calculations, I’m sure about, oh my God, if I pay this, then this happens.

[00:41:46] DJ: All right. And you can use a snowball effect or use the–

[00:41:49] Ramit: Yeah. You know all this stuff. I wrote it in Chapter 1, Chapter 5. I wrote them all, and it’s there. And you’ve probably read it from a lot of other people too. You obviously know this stuff.

[00:41:58] DJ: Get the Roth IRA.

[00:42:00] Ramit: Yeah. Why do yeah you keep going back to that? What’s so scary in yourself that you run to an Excel sheet?

[00:42:10] DJ: I thought that that’s the way people who are good with money do it. It’s like they know something I don’t.

[00:42:19] Ramit: No, there’s no secret knowledge out there. You told yourself, if I just make more money, then I’ll feel different. You told yourself, if I learn how to automate it, then I’ll have the secret knowledge. You did all those things. But just reading that stuff and even making more money does not change the way you feel about your money. It does not change the way you behave with your money.

[00:42:51] DJ: So how do you incentivize good money behavior within yourself?

[00:42:56] Ramit: I don’t.

[00:42:58] DJ: How do you create good money habits?

[00:43:00] Ramit: How would you create it for your daughter?

[00:43:03] DJ: So I’m going to make myself a sticker chart.

[00:43:07] Ramit: You came on this show for me to levy consequences on you, a guy who doesn’t even know you, and you think it’s crazy to put up a sticker chart for yourself? I don’t care how ridiculous it is. Somebody wants to take a bite of a tomato every time they overspend on something because they want to feel bad, fine. As long as it does for you.

[00:43:26] DJ: Has somebody done that? 

[00:43:28] Ramit: No. Well, they’ve done some weird ass stuff. They’ve put their credit card in a freezer and they–

[00:43:33] DJ: Oh, I’ve done that.

[00:43:34] Ramit: Yeah. That’s what people who are not good with money do. Look, if it works, sometimes we got to start by training ourselves with some technique. I used to do this thing where, I would put my gym clothes right by my bed because if I didn’t, I wouldn’t go to the gym. That was a very childlike thing, but it helped me. Now it’s become much more of a habit, so I don’t need to do that.

 Fine. It works, but we got to go deeper than that. We can’t live a rich life based on gimmicks.

[00:44:03] DJ: Okay.

[00:44:04] Ramit: Who needs to create consequences for you.

[00:44:08] DJ: Myself.

[00:44:10] Ramit: Yeah. Adam, is it your place to create consequences?

[00:44:18] Adam: I don’t think so.

[00:44:19] Ramit: Okay. What do you think, DJ?

[00:44:23] DJ: No, that could lead to resentment. It has to be something I want to do for myself.

[00:44:26] Ramit: Okay. So?

[00:44:29] DJ: I mean, I am a people pleaser though, so maybe if he did, I would probably might have good results. I’m not sure.

[00:44:38] Ramit: That’s interesting. I was going to go down the route of asking if you’re a people pleaser, but then you told me that you routinely say no to people when it comes to money.

[00:44:45] DJ: Oh, I’m definitely a people pleaser.

[00:44:49] Ramit: How does that affect your money?

[00:44:52] DJ: I’m sure it affects my money in a myriad of ways, but it’s more that I would be willing to help someone else.

[00:45:03] Ramit: But not for yourself.

[00:45:04] DJ: But not for myself.

[00:45:06] Ramit: Why?

[00:45:07] DJ: I don’t know.

[00:45:08] Ramit: Is it emotional when you deal with your own money issues?

[00:45:12] DJ: Yeah. Incredibly.

[00:45:14] Ramit: So you just avoid it and you go to the Excel sheet.

[00:45:16] DJ: Even though deep down you admit that will never change anything. You’ve already got a ton of Excel sheets, does nothing for you. You try to steer the conversation there. What do you think hearing all of this?

It’s never going to change unless I do something about it.

[00:45:32] Ramit: I agree. 

[00:45:34] DJ: So I’ll just keep treading water and spinning in the same circles unless I do something about it.

[00:45:40] Ramit: I agree.

[00:45:42] DJ: And that’s sad.

[00:45:43] Ramit: Is it?

[00:45:45] DJ: Kind of.

[00:45:47] Ramit: You never expressed being sad about being stuck in this position? Not once on this call.


[00:45:54] Ramit: So far, the only reason DJ has given herself to change a lifetime of money habits is that “not having enough money would be sad”. That’s not really a vivid reason to change. It’s not really specific. And this is why I spend so much time talking about your rich life down to the restaurant that you want to eat at. Because you need to have a vivid specific reason to change. Otherwise you can go on the way you’ve been going for the next 25 years. I also want to talk about the specific consequences.

For example, what will your son or daughter say when they hear their parents fighting about money? What will it feel like to have to go to the same places 20 years from now and to have never been able to try something new? 

DJ has never gotten that specific with herself. She’s instead tried to delegate this uncomfortable work to Adam, who, by the way, rejects the responsibility. Or she’s tried to delegate it to her Excel spreadsheets. And as I say, in situations like this, the problem and the solution is you.


[00:47:04] Ramit: So really what do you want to change in the next five, 10 years? Doesn’t sound like much. You wish hypothetically you were not in debt. Okay. You don’t really understand how you can control that because you try, sometimes you put some money, but then it seems to come back up. Okay. There’s no real why. And what was that thing Adam said? Adam, you came on here. What was your, uh, message to DJ about money?

[00:47:37] Adam: Oh gosh. I don’t remember what I said.

[00:47:39] Ramit: The thing about marriage?

[00:47:42] Adam: Oh, sure.

[00:47:42] Ramit: Why don’t you guys get married tomorrow?

[00:47:45] Adam: I don’t think that would be wise for my finances. And I’m sorry that that’s I guess not a great sentence to say. That feels like a dirty sentence.

[00:47:56] Ramit: Why?

[00:47:58] Adam:  Because we’ve been together almost three years now. I was 31 and had to move back in with my parents, but it helped me in a very short window, three and a half to four years pay off the debt, build up a down payment, buy this house, and live a life that I’m really comfortable with while making not that much money. It’s right there on your sheets. I think my take home in– I had my W-2 next to me for fun. My take home last year was 50,000.

[00:48:31] Ramit: Hmm.

[00:48:32] Adam: And I feel good.

[00:48:34] Ramit: In other words, she makes almost double what you make now.

[00:48:39] Adam: Yeah.

[00:48:39] Ramit: She’s in credit card debt. 

[00:48:42] Adam: Yeah.

[00:48:44] Ramit: Okay. DJ, what do you feel hearing that?

[00:48:48] DJ: Well, I know.  I know I make more money than him. It is a recent development. I haven’t always made more money than him. And when we met, I didn’t have a job at all. It’s embarrassing that I still have credit card debt when I make the money that I do.

[00:49:07] Ramit: Mm-hmm.

[00:49:09] DJ: And I know it’s something that’s important to him that I get a handle on. And he’s given me the space and the opportunity to pay it off and I haven’t.

[00:49:19] Ramit: It’s not important to you, is it?

[00:49:21] DJ: No, because like you said, there’s no consequences.

[00:49:25] Ramit: Yeah.

[00:49:28] DJ: The consequence is that I just stay stuck in where I’m at.

[00:49:33] Ramit: But you don’t care about that because you–

[00:49:34] DJ: That’s the only consequence.

[00:49:35] Ramit: Like where you’re at.

[00:49:36] DJ: Yeah.

[00:49:39] Ramit: If I had to stay stuck where I am, let me put it this way. I’m happy, but I’m not satisfied. I love where I live. I love the car I drive. I love the trips we take. I love them. But I also dream bigger. I dream of a bigger trip. I dream of taking more friends. I took a bunch of friends on my 40th birthday. I want to do it for my 45th.

I dream of being more generous. I dream of all these things, but it’s not going to be a dream. I’m going to make it happen. That’s how I feel about money. And I am utterly puzzled that you don’t seem to have any agency around your money.

[00:50:25] DJ: I guess I feel the same. I do dream of more things, of bigger things. I just thought that when I got a new job and when I doubled my salary, that it would feel like I arrived somewhere and it just all feels the same.

[00:50:40] Ramit: Because your behavior is exactly the same. You’re paying thousands in interest and your boyfriend won’t marry you. 


[00:50:48] Ramit: So now finally, we can dive into their CSP and start planning for the future. Here’s a quick summary. They have $6,000 in assets in their vehicles, a $100,000 in investments, including their 401Ks, $6,000 in savings, and the full debt once we include their mortgage and student loans is 185,000.  In terms of income, she nets 5,000 a month. That’s after tax. And he nets 3,000 a month.


[00:51:14] Ramit: So what do you want to do?

[00:51:16] DJ: Pay off my credit card debt.

[00:51:19] Ramit: How much do you owe?

[00:51:22] DJ: It’s 15,000.

[00:51:23] Ramit: Mm-hmm. How long would it take you to pay it off?

[00:51:27] DJ: I don’t know.

[00:51:30] Ramit: How do you not know? You know what a snowball is. You’ve calculated all these other things, but you don’t know how long it would take you to pay off your debt?

[00:51:39] DJ: Yeah, I guess I’ve never actually done that math of how quick I could pay it off.

[00:51:44] Ramit: And why is that? You’ve done all this other math. Why is that?

[00:51:49] DJ: I don’t know. I don’t know why I haven’t acted on it.

[00:51:52] Ramit: Get curious, please, for the love of God, about yourself.  Christ.

[00:51:58] DJ: Because I don’t care. I haven’t done the math because I don’t care.

[00:52:03] Ramit: Okay, well, if you don’t care, then that’s pretty much–

[00:52:07] DJ: Well, at least I care a little bit. I care enough to seek this out. I care enough to try. I’m trying to find a way that it will convince myself to care.


[00:52:17] Ramit: I want to take you behind the scenes of what just happened there. Because I thought it was very interesting. I didn’t just lose my temper. I intentionally raised my voice to shake DJ out of her automatic responses. She has a lot of automatic responses.

She automatically tries to redirect our conversations to the spreadsheet. She automatically says, I don’t know when I ask her about her own behavior. And my job isn’t to simply sit here and accept these responses. I’m not a transcriptionist. It’s my job to push her, sometimes uncomfortably to realize what’s really going on here.

So that’s what I did. And when I finally pushed her, she said, “I don’t care.” So I saw it and I said, okay, fine, if you don’t care. That’s pretty much it. And she immediately recognized what she had said and she started backtracking. 

I find these conversational dynamics absolutely fascinating. They happen in the split second, and if you really watch, you can see the dynamics that are coming up often from these invisible scripts from childhood. So now that she’s backtracking, this is where I soften up and give her a chance to connect the dots. Let’s watch.


[00:53:23] Ramit: You came on this call, which takes a huge amount of courage. Huge. You’re here talking about stuff that nobody would talk about. And I respect that. You filled out an application, you went through a lot of screening. I respect that. To show up here, show up on time, show up with all your numbers done, that says something. 

You couldn’t have gone through that if you did not care. But every time I try to get you to look inside, you divert. You switch topics. What you just did was to rationalize it. Well, I showed up here, and you did show up here. It’s very impressive. I’m glad you did. But I want to know why have you never run a debt payoff calculation?

[00:54:11] DJ: Because it changes every month. The debt changes.

[00:54:16] Ramit: That’s a triviality

[00:54:19] DJ: Oh, I’ve never thought to do it.

[00:54:23] Ramit: Never? Didn’t you listen to this podcast? Haven’t I told other people what’s your debt payoff date? Do you think maybe there’s an emotional reason you haven’t done it?

[00:54:37] DJ: Maybe. Probably.

[00:54:39] Ramit: What might it be?

[00:54:41] DJ: Maybe I’m afraid to fail.

[00:54:46] Ramit: Yeah. Did you know before this call how much you owed?

[00:54:51] DJ: Yes.

[00:54:52] Ramit: Okay. You’re not afraid to open up those envelopes and those emails.

[00:54:56] DJ: No, I put them on my Excel sheet every month.


[00:55:01] Ramit: This is getting frustrating for me. DJ is a believer, meaning she believes that things will magically turn out okay, but she’s also an avoider and they usually avoid talking about money at all. In DJ’s case, she avoids looking inside herself. I think I’ve decided I’m going to play ball and go down the tactical route and let’s see where we end up. 


[00:55:24] Ramit: All right, let’s look at the debt payoff. What’s your interest rate?

[00:55:29] DJ: Adam, did we write this down the other night?

[00:55:31] Adam: I didn’t save it.

[00:55:36] Ramit: We’ll just say 26%, because I bet it is. And how much currently pay every month?

[00:55:42] DJ: It varies. It really does vary. I pay–

[00:55:48] Ramit: Why?

[00:55:49] DJ: I try to put as much as I can when I can.

[00:55:52] Ramit: Okay. How much?

[00:55:54] DJ: I usually put at least 2,000 a month towards it, but then I charge it back up. That’s the problem. I will pay and then I’ll use my credit card so that I get points.

[00:56:07] Ramit: What the fuck? Why? What the fuck? What are you talking about? Why are you using it for points?

[00:56:14] DJ: I don’t use– because I don’t want to use my checking account. Because you don’t get any rewards to use your checking account when you pay.

[00:56:18] Ramit: Are you kidding me right now?

[00:56:20] DJ: What?  You’re supposed to do that, right?

[00:56:23] Ramit: Who told you that? Who told you? Who told you that you’re supposed to go into more debt to earn one cent in rewards?

[00:56:34] DJ: Well, you just don’t get any rewards when you spend money out of your checking account.

[00:56:38] Ramit: Who cares? You are in debt. You know why you actually care? Do you know why I’m getting so mad and you’re not? Do you have any idea why this is happening right now?

[00:56:48] DJ: Because the math doesn’t equal out.

[00:56:51] Ramit: No. I’m getting mad because you don’t even see the consequences of what you’re doing. Because you have no consequences. You are staying in debt, not just because of the interest, which is already crazy high, but because you keep spending on it.

And when I ask you why, you go, so I can get points. It makes no sense. These points are worthless for somebody like you in credit card debt. The last thing you should be thinking about is points.

[00:57:27] DJ: I needed to hear that.

[00:57:31] Ramit: Has anyone ever told you that?

[00:57:34] DJ: No. I thought that if you were good with money, that you used credit cards to your advantage to earn points so that your money was making you money.


[00:57:45] Ramit: There it is again. This idea of the platonic person who is “good with money” — 


[00:57:51] Ramit: Your money is not making you money. All that money you’re putting in your credit card on the backend is just costing you more than those points. You’re basically spending a dollar to pay a 1.50 and then you get one cent back. It makes no sense.

[00:58:14] DJ: Yeah. When you put it like that, it doesn’t make sense at all.

[00:58:17] Ramit: Okay, so we got to stop that. This is why people who are in credit card debt, they use their debit card. It’s a huge behavioral peculiarity. But it actually makes sense because those people go, shit, I do not want to put more on this credit. I’m paying it off. I don’t want to add more to it, so I’m going to pay for my dinner with a debit card.

That’s why everybody listening, if somebody pulls out a debit card, you go, what is this weirdo doing with the debit card? That’s why. it’s almost certainly because they’re in credit card debt. Okay.

[00:58:48] DJ: So just be that person.

Yes, be that person and you earn the right to earn miles later. Okay.

[00:59:00] Ramit: All right. So currently, if you’re paying off $2,000 a month, that’s why now the math actually adds up. If you’re paying 2,000, I’m like, this thing’s going to be paid off right away. What’s the problem? Then I find out you’re spending all this money for miles. I go, oh my God. All right, so how much, by the way, were you spending on that credit card?

[00:59:23] DJ: I just use it for everything. 

[00:59:26] Ramit: Like?

[00:59:26] DJ: One with my lowest interest, I just use for everything. Gas, groceries, everything.

[00:59:31] Ramit: Okay. Don’t do that anymore.

[00:59:33] DJ: Okay.

[00:59:34] Ramit: So you can only buy how much you have in your checking account.

[00:59:38] DJ: Okay.

[00:59:39] Ramit: All right, so if you pay, can you continue paying $2,000 a month towards your credit card?

[00:59:46] DJ: Yes.

[00:59:47] Ramit: How long will it take you to pay off?

[00:59:51] DJ: A year probably.

[00:59:54] Ramit: Let’s get the exact number because I want you to see it.

[00:59:58] DJ: Okay.

[00:59:58] Ramit: Oh, you’re not going to be able to do this on a calculator of your own. 

[01:00:01] DJ: Why not?

[01:00:03] Ramit: Unless you can do the calculations with the interest rate.

[01:00:07] DJ: Oh.

[01:00:08] Ramit: I’ll just tell you. It’s nine months.

[01:00:11] DJ: That’s it?

[01:00:14] Ramit: Yeah.

[01:00:15] DJ: Okay.

[01:00:17] Ramit: What do you think about that?

[01:00:19] DJ: That’s awesome.

[01:00:21] Ramit: It’s easy. Is that surprising to you?

[01:00:27] DJ: Yeah, that’s shocking.

[01:00:29] Ramit: What’d you think it would be?

[01:00:31] DJ: At least two years.

[01:00:33] Ramit: Even two years is not that long to me. Shit. I tried to get my bench press over one plate for years. 

[01:00:42] DJ: I love it. I love it when my money takes time to compound. I love it when I’m training and I go, oh my God, this is going to take me two years to get this lift at the number that I want it to be. Or, oh my gosh, I have this intention of going on this trip and I know I want it to be absolutely magical with these people and this hotel and this type of food and the chef, and it’s going to take three years to engineer the whole thing. I love it. I think that you and Adam would get along great.

[01:01:16] Adam: Yeah. You just described our New Year’s party. We’d spent nine months planning for one night and we spent almost two grand on because it was the thing we were doing that year. The biggest thing we could do for people we loved.

[01:01:29] Ramit: Wow. And did you like that, Adam?

[01:01:31] Adam: I loved it. It was so much fun.

[01:01:33] Ramit: And what about you DJ?

[01:01:35] DJ: Yeah, I thought it was awesome. It was great.

[01:01:40] Ramit: What’s different about that than paying off credit card debt?

[01:01:43] DJ: You get to feel it. You get to see people smiling. You get to plan it. You get to– there’s a celebration.

[01:01:54] Ramit: Hmm.

 Have you celebrated any progress with your credit card in the last five years? The fact that you’ve paid off $2,000 at a time, have you celebrated that?

[01:02:05] DJ: No.

[01:02:06] Ramit: Why?

[01:02:07] DJ: Because I would think that a celebration wouldn’t be till it was all gone.

[01:02:12] Ramit: Oh really? Why is that? Is that all or nothing?

[01:02:18] DJ: Yeah.

[01:02:19] Ramit: Doesn’t seem like a healthy way to live. I got to wait until I pay off X before I can start doing Y. I got to wait until I accomplish this big thing in my life until I can go on to the next thing. I mean, even Adam said you don’t have to be debt free in order to get married.

[01:02:41] DJ: I don’t really think about the future that much, but Adam is really good about planning for the future and planning for retirement. And I just feel like it’s something that society tells you should be a priority. You should think about what’s going to happen to you when you can’t work anymore.

[01:03:00] Ramit: What is something that society tells you that you should do that you just haven’t gotten around to? Very common answer is flossing. 

[01:03:08] DJ: Well, society tells women to have kids. Society tells women to get married. Society tells women all types of things.

[01:03:15] Ramit: Well, you’re here because– 

[01:03:17] DJ: Buy a house.

[01:03:18] Ramit: You want to get married and you told me you want to buy a house too, so you want to–

[01:03:22] DJ: Yeah. Those are two things that I haven’t gotten around to doing yet.

[01:03:25] Ramit: Okay. And you haven’t yet really tapped into saving for retirement, will you one day?

[01:03:33] DJ: Put money into my 401K, but I’m sure there’s better ways to do it.

[01:03:36] Ramit: Mm-hmm. Do you get the point of what I’m trying to say to you right now?

[01:03:42] DJ: No.

[01:03:44] Ramit: You haven’t gotten around to some things and you feel fine about it? Uh, I haven’t gotten married yet. I probably will one day. I haven’t had kids yet. I may one day. I haven’t really prioritized retirement. You think it’s possible you’ll do it someday?

[01:04:05] DJ: Probably.

[01:04:06] Ramit: Okay.

[01:04:06] DJ: As it gets closer. But it’s better to start sooner rather than later.

[01:04:12] Ramit: Who says?

[01:04:14] DJ: Math, compounding interest.

[01:04:16] Ramit: Fuck. That is a good answer. Now that is a good answer. Damn. I did not expect that. I have nothing to say to there. No notes. Okay. You got me on that one. 


[01:04:26] Ramit: Okay, now this financial knowledge is really starting to come to the surface. DJ has said she doesn’t know why this keeps happening. She can’t keep track of her spending, but suddenly she drops a casual comment on compound interest.

She’s pulling material from my book, which is called I Will Teach You To Be Rich, and if you read that book on Amazon or any bookstore or from the library, you will have a better understanding of money than 98% of people in this country. I would highly encourage you to do it. But, of course, reading is not enough.

You’ve got to apply it. So at this point, I opened up their conscious spending plan and I quickly noticed how little money they are putting towards their investments. And I also noticed that DJ continued to dodge my questions.


[01:05:11] Ramit: All right. Investments are 5% of net. Why? Nobody knows.

[01:05:18] DJ: Yeah. I don’t know why is it so low.

[01:05:21] Ramit: Okay. Well, I think I know the answer for you. Why are you not investing anything even though you make basically $90,000 a year?

[01:05:30] DJ: I’m not investing anything because I don’t know where to begin, first of all.

[01:05:36] Ramit: What’s in Chapter 3 and 7 of my book?

[01:05:39] DJ: Oh, yes. I should get a Roth IRA, and then I should be in index funds or something like that, something that’s stable.

[01:05:46] Ramit: Uh, yes, that’s exactly correct. Wait, what is this thing where you play dumb? I don’t get it.

[01:05:52] DJ: Because I’m not positive about all of those facts, but I think they sound right.

[01:05:58] Ramit: Are you looking for me to come in here and berate you and tell you that you really need to take this seriously?

[01:06:04] DJ: Well, if that’s what you think will work.

[01:06:09] Ramit: First off, I’m not going to get you to change. Only you can get you to change. And I think you wanted to come talk to me today because you wanted me to do some magical psychological mumbo jumbo, or you wanted me to berate you, or you wanted me to do something to make you actually feel what you “know to be true.” is that accurate?

[01:06:34] DJ: Yeah.

[01:06:34] Ramit: Yeah. Wouldn’t this call have gone a lot easier for you if I just came in here and told you all the things you’re doing wrong? And I was like, that’s wrong. That’s bad. I can’t believe you did that. And this is what you need to do. Wouldn’t that have gone a lot easier for you today?

[01:06:48] DJ: I think that would’ve reinforced things that I already think.

[01:06:53] Ramit: Which is what?

[01:06:57] DJ: That I’m not doing the right things with my money.

[01:06:59] Ramit: Mm-hmm.

[01:07:01] DJ: I’m not going to play ball with that because what you’re trying to do by doing that is trying to delegate responsibility to somebody else. And I’m not going to take it on. I’m not going to catch the ball that you’re trying to throw to me.

[01:07:14] Ramit: Yeah.

 Are you good with money or bad with money?

[01:07:18] DJ: I’m bad with money.

[01:07:20] Ramit: Okay. Are you smart with money or are you unintelligent with money?

[01:07:26] DJ: I’m frivolous with money.

[01:07:27] Ramit: Oh, frivolous. Wow. Okay.

[01:07:31] DJ: I think.

[01:07:32] Ramit: Okay. Are you smart?

[01:07:36] DJ: Yes.

[01:07:37] Ramit: Yeah. I think you are too. So I’m very puzzled with this innocent dough. I don’t know what to do. I don’t know where to invest. I go, you fucking know. And then you go, oh yeah, Roth IRA, index funds, fully diversified. Even [Inaudible] fund. I go, what the– so why? Why not come out and say that?

[01:08:01] DJ: Because I wasn’t positive and I’ve never done it.

[01:08:05] Ramit: So? What do you get out of playing like you don’t know the answer?

[01:08:12] DJ: I wasn’t actually sure.

[01:08:16] Ramit: It’s okay. You don’t have to be sure. I’m here. I can help. But what do you get out of that? Out of saying, I don’t know.

[01:08:23] DJ: Reassurance.

[01:08:24] Ramit: From whom?

[01:08:28] DJ: Somebody who might know more than me.

[01:08:30] Ramit: Okay. What else?

[01:08:33] DJ: Direction and guidance.

[01:08:35] Ramit: Okay. How long have you been telling yourself I don’t know where to invest?

[01:08:43] DJ: Forever.

[01:08:45] Ramit: Yeah. And you only got reassurance 10 seconds ago from me. So what did you get out of that?

[01:08:54] DJ: I still don’t know that I’ll actually do it. I would like to. So maybe I just– reassurance.

[01:09:02] Ramit: Nope.

[01:09:03] DJ: Confirmation.

[01:09:04] Ramit: Nope. Why’d you do it? You’ve been telling yourself, I don’t know, for 10 years, even after reading it in a book. What did you get out of that? 

[01:09:15] DJ: Nothing. 

[01:09:17] Ramit: You got something out of, otherwise you would’ve done something else. Hey, I have this gaping problem in my life. The roof has– it’s looks like it’s going to cave in, there’s some water marks on the roof. I don’t know what to do. I don’t know. How long has this been going on for? Oh, it’s, uh, it’s getting worse and worse. It’s maybe eight years, forever. I don’t know. What am I getting out of that?

[01:09:42] DJ: Sympathy.

[01:09:44] Ramit: That’s one. Let me keep going with this. I don’t know. do you know what I should do? I mean, it looks pretty bad. No. What else? I’m delegating the responsibility to somebody else. I’m giving myself an excuse not to take action because I don’t know. Is that for you and money?

[01:10:11] DJ: I’m sure. Yes.

[01:10:13] Ramit: I have multiple Excel sheets. I know what all these different techniques were paying off debt is, but I don’t know. And therefore I cannot make a plan to pay off debt. I know what a Roth IRA is. I know what an index fund is. I read your book 10 years ago, but I don’t know, and therefore I’m investing zero, zero, $0 every single month, even though I make $90,000 a year. I don’t know. What do you think?

[01:10:43] DJ: That makes a lot of sense because when you delegate responsibility, if someone else doesn’t solve the problem for you, then it’s no longer your fault and you absolve yourself of any guilt revolving around it.

[01:11:00] Ramit: Bingo. Do that in any other parts of life?

[01:11:03] DJ: Oh yeah. Probably all the time. 

[01:11:05] DJ: I also am like, I don’t know how to clean my room. I don’t know where to put my clothes.

[01:11:10] Adam: Oh yeah. There you go. That’s a great one.

[01:11:12] DJ: I don’t know how to fix it. My room is just a disaster. I don’t know.

[01:11:17] Ramit: When did you start doing it? When’s the first time you remember doing that? 

[01:11:20] DJ: Feeling like that mountain was so overwhelming that I just didn’t solve it or saying I don’t know?

[01:11:27] Ramit: Using “I don’t know” as a strategy.

[01:11:32] DJ: I’m sure I was young.

[01:11:35] Ramit: Mm-hmm.

[01:11:36] DJ: I can’t think of the first time.

[01:11:37] Ramit: And as you kept doing that as you got a little older, what happened?

[01:11:44] DJ: Typically then you don’t have to solve your own problems.

[01:11:48] Ramit: Who did it for you?

[01:11:50] DJ: Anyone.

[01:11:51] Ramit: Who?

[01:11:52] DJ: My mom.

[01:11:55] Ramit: She solved it for you? She would what, clean your room? What would she do?

[01:11:59] DJ: Maybe sit with me while I cleaned my room.

[01:12:02] Ramit: Really?

[01:12:03] DJ: Yeah.

Yeah. Driving is a good example. Just like acting you’re a bad driver so then you don’t have to drive anywhere.

[01:12:14] Ramit: Wow. That’s so interesting. Hmm. So you can get your way for a long time. Maybe forever.

[01:12:21] DJ: Yeah. 

[01:12:22] Ramit: What are the consequences of that strategy?

[01:12:25] DJ: Well, if you actually do know when you say you don’t know, then it could be seen as manipulative. Or if you actually don’t know and you never take the time to learn, then you could end up in a really sticky situation and not be able to get yourself out of it.

[01:12:49] Ramit: Mm-hmm. Has that happened with you and money?

[01:12:52] DJ: I would say so.

[01:12:54] Ramit: Like what?

[01:12:56] DJ: Like the debt I have right now.

[01:12:58] Ramit: Yeah. Good. That’s honest. So by saying, “I don’t know” to yourself, to Adam, to everybody around you, probably your sister, probably your mom, I don’t know. But you actually do know. Sure. Maybe you don’t know every last tiny detail of investing, but you don’t actually need to know all that stuff to get started.

Chapter 1, introduction. Chapter 5. Chapter 7. You open up an account. You don’t need to know everything, you just need to get started. Classic I Will Teach You to Be Rich cannon. So in the meantime, if you did nothing with your investments, I see zero right now, if you kept it basically the same for the next 30 years, you’d be losing over half a million dollars. Just from saying, I don’t know.

[01:13:52] DJ: That’s a pretty significant amount of money to me now, especially. And like we talked about earlier, math, retirement, start early, more money.

[01:14:06] Ramit: The irony is you actually do know. You know better than probably 80% of the people that I talk to. So what a shame that you’re not actually investing. You took all that reading, all those skills, you read the book 10 years ago, and you actually didn’t do the last step, which is the only step that matters, the behavior.

[01:14:31] DJ: Right.


[01:14:33] Ramit: I am proud of DJ and Adam for coming on the show, especially DJ, for really confronting some of the deeply held issues that she has with money. That took a lot of courage. I want to share some follow ups that they sent me a few weeks later. 

DJ said, “I learned I cannot solve an emotional problem with a tactical solution. In my CSP, I’ve set aside $2,000 per month towards my credit card debt, which I will stop using and will live on my debit card only until this is paid off. What surprised me is that if I had began this journey in February of 2022, I’d likely be debt free right now. So I cannot wait another year. It’s time to think big and continue living our rich lives on a grander scale.” 

[01:15:18] NARRATION: Adam said, “I was surprised how closely tied our money management habits are with our youth. I was annoyed to watch DJ know the answers to every question but not want to take responsibility. But I think things will get better. And I hope she will make the changes she wants to make for herself and not just to appease me. Her auto pays were already set up, so hopefully she does not get tempted with her $2,000 of fun money.”

I want to thank you for listening, and I want to thank those of you who are watching on YouTube. Remember, my Netflix show is launching in April, so if you want to hear conversations like this with more couples like DJ and Adam, go to Netflix, search for Ramit Sethi, and add my show to your list. Thanks again, and I will see you next week.