{"id":118854,"date":"2024-12-03T11:52:19","date_gmt":"2024-12-03T15:52:19","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118854"},"modified":"2026-02-18T15:47:48","modified_gmt":"2026-02-18T19:47:48","slug":"185-dawn-richard","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/185-dawn-richard\/","title":{"rendered":"Episode 185. \u201cMy fianc\u00e9 has no savings at 43. Should we get married?\u201d"},"content":{"rendered":"<p><iframe title=\"\u201cMy fianc\u00e9 has no savings at 43. Should we get married?\u201d\" src=\"https:\/\/www.youtube.com\/embed\/fbSwMqqdZ6k\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/episode\/6ud9qdwiPfgJVIgVaE7Ysg?utm_source=generator\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>Dawn is 48, Richard is 43, and they\u2019re living paycheck to paycheck. Although they\u2019re engaged, they\u2019re struggling to combine their finances because of their varied pasts. Dawn is overspending on kids and grandkids, and Richard has deep scars from a financially devastating breakup. Can they move beyond their past money stories and get aggressive about investing for retirement?<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>Aura Frames | Save on the perfect gift by visiting\u00a0<strong><a href=\"https:\/\/auraframes.com\/\">https:\/\/auraframes.com<\/a><\/strong>\u00a0to get $35-off Aura\u2019s best-selling Carver Mat frames by using promo code RAMIT at checkout.<\/p>\n<p>Netsuite | Get visibility to everything in your business in one place. Sign up and defer payments, with no interest, for six months at<strong><a href=\"https:\/\/iwt.com\/netsuite\">\u00a0https:\/\/iwt.com\/netsuite<\/a><\/strong>.<\/p>\n<p>LegalZoom | Launch, run, and protect your business to make it official today at\u00a0<strong><a href=\"https:\/\/legalzoom.com\/\">https:\/\/legalzoom.com<\/a><\/strong>\u00a0and use promo code RICHLIFE to get 10% off any LegalZoom business formation product excluding subscriptions and renewals.<\/p>\n<p>Rocket Money | Stop throwing your money away. Cancel unwanted subscriptions \u2013 and manage your expenses the easy way \u2013 by going to<strong><a href=\"https:\/\/rocketmoney.com\/ramit\">\u00a0https:\/\/rocketmoney.com\/ramit<\/a><\/strong>.<\/p>\n<p>DeleteMe | If you want to get your personal information removed from the web, go to<strong><a href=\"https:\/\/joindeleteme.com\/ramit\">\u00a0https:\/\/joindeleteme.com\/ramit<\/a><\/strong>\u00a0for 20% off.<\/p>\n<h2><strong>Links mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/iwt.com\/booktour\">Sign up to attend a live event on my book tour<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p>[00:00:00]\u00a0<strong>Dawn:<\/strong>\u00a0We\u2019re just not doing any saving or anything. We have no emergency fund. We have nothing.<\/p>\n<p>[00:00:03]\u00a0<strong>Richard:<\/strong>\u00a0I know I\u2019m behind. You need a 401k. You need finances in the bank.<\/p>\n<p>[00:00:07]\u00a0<strong>Ramit:<\/strong>\u00a0In today\u2019s episode, meet Dawn and Richard.<\/p>\n<p>[00:00:10]\u00a0<strong>Dawn:<\/strong>\u00a0We\u2019re not really sure how to get to the goals that we have with what we have. I also don\u2019t know if my expectations are a little too high.<\/p>\n<p>[00:00:19]\u00a0<strong>Ramit:<\/strong>\u00a0Dawn is 48. Richard is 43, and they live paycheck to paycheck.<\/p>\n<p>[00:00:24]\u00a0<strong>Dawn:<\/strong>\u00a0When I get his money, the 200 or 250, I feel better. Like I can breathe.<\/p>\n<p>[00:00:29]\u00a0<strong>Ramit:<\/strong>\u00a0They\u2019re engaged, but they\u2019re struggling to combine their finances.<\/p>\n<p>[00:00:33]\u00a0<strong>Dawn:<\/strong>\u00a0We almost broke up. I have children and grandchildren, so my money goes many places where he\u2019s doesn\u2019t have the children.<\/p>\n<p>[00:00:44]\u00a0<strong>Ramit:<\/strong>\u00a0Dawn wants financial stability, but she overspends on her family.<\/p>\n<p>[00:00:49]\u00a0<strong>Dawn:<\/strong>\u00a0We went on vacation.<\/p>\n<p>[00:00:50]\u00a0<strong>Ramit:<\/strong>\u00a0Oh.<\/p>\n<p>[00:00:50]\u00a0<strong>Dawn:<\/strong>\u00a0I brought the whole family. I\u2019d say probably 6,000.<\/p>\n<p>[00:00:55]\u00a0<strong>Ramit:<\/strong>\u00a0Richard has deep scars from a financially devastating breakup.<\/p>\n<p>[00:01:00]\u00a0<strong>Richard:<\/strong>\u00a0I\u2019ve lost the home, lost the money, sold off a camera equipment, and I\u2019m almost afraid to spend money.<\/p>\n<p>[00:01:06]\u00a0<strong>Ramit:<\/strong>\u00a0And he isn\u2019t sure how to contribute to their household and his retirement with his current income.<\/p>\n<p>[00:01:12]\u00a0<strong>Richard:<\/strong>\u00a0I haven\u2019t made this amount a year since I was in my early 20s.<\/p>\n<p>[00:01:17]\u00a0<strong>Ramit:<\/strong>\u00a0Can they create a financial plan, move beyond their money past, and start getting aggressive about investing? You\u2019re losing tons of money every single month by not investing.<\/p>\n<p>[00:01:27]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t want to be 70 years old and working a second job.<\/p>\n<p>[00:01:30]\u00a0<strong>Ramit:<\/strong>\u00a0Now, let\u2019s meet Dawn and Richard. Okay, let\u2019s take a look here. Dawn is 48, Richard is 43. They live in upstate New York. They want to buy a house in the next one, two years. One of them has three kids. Live in a house. They\u2019re renting to own. They struggle to put their finances together because of past financial trauma.<\/p>\n<p>[00:01:52]\u00a0\u201cI have trouble saying no to my children, but I also want to save for vacations, and I want to buy the house. Rich does not have any retirement, and I claimed bankruptcy eight years ago after my divorce. We stress about money constantly, and it has caused us to almost break up. Rich has no children. I spend more than I should, and my son has no concept of money.<\/p>\n<p>[00:02:18]\u00a0\u201cWe\u2019ve postponed our wedding because of money. I make three times what Rich does, so his go-to answer is he does not make enough money, except he hardly has any bills. This is my third marriage,\u201d Dawn says. \u201cWe\u2019d love to have a budget together and both feel we are contributing to our future.\u201d All right. Well, let\u2019s take a look.<\/p>\n<p>[00:02:41]\u00a0Assets of 28,500. Investments of 24,900. Okay. Savings of 58,000. Wow. And debt of 14,000. Total net worth of 97,000. Okay. So this is troubling. It\u2019s not necessarily an issue to have a small amount of assets. I don\u2019t mind that. But to only have about $25,000 of investments around the age of 43 and 48, that is a problem.<\/p>\n<p>[00:03:13]\u00a0To also have more savings than investments probably suggests to me that this couple has not been particularly educated about money. Because why would you have more in savings than in investments around the age of 50? That makes no sense. You\u2019re leaving so much money on the table, and time is against you.<\/p>\n<p>[00:03:34]\u00a0The debt at least is nominal 15, 000 bucks. We can knock that out if necessary, but we need to take a look at the incomes to understand more. Okay. We have one partner making 6,000 bucks, another making 3,000 bucks, for a total of about $10,000. So they make six figures gross. I\u2019m curious why one partner is making $3,000.<\/p>\n<p>[00:03:59]\u00a0That\u2019s pretty low, $3,000 a month as a 43-year-old. So I want to find that out. Going down to the fixed costs. Fixed costs are at 74%. That\u2019s too high, way too high. Housing costs are fine, 21, 22%. That\u2019s not bad. Car payment is 766. Okay, it\u2019s not horrible. Debt payment\u2019s 557 per month. That\u2019s a lot of money.<\/p>\n<p>[00:04:29]\u00a0Phone is 275. Also, why? Subscription is 299. Okay, so we see some sloppiness here. Just out of curiosity, if I drop that subscriptions down to 50, and I drop that phone down to, let\u2019s just say 150, what would happen? Well, their fixed costs would drop down to 68%. Still high, but moving in the right direction.<\/p>\n<p>[00:04:51]\u00a0Let me tell you why I did that. What that tells me is there is sloppiness in their spending. If you\u2019re at 74% and I just simulate using the CSP and get you down to 68% with a couple of clicks, you could do it. I bet you there\u2019s some other various expenses that we\u2019ll get to in guilt-free spending. Overall, that\u2019s slightly reassuring.<\/p>\n<p>[00:05:11]\u00a0Let\u2019s keep going. Investments are at zero. Huge problem. Savings are at zero. Huge problem. What the hell? Guilt-free spending is at 32%. I don\u2019t even really believe this number. According to the CSP, it says their guilt-free spending is at 32% or 2,200 a month. I don\u2019t believe this. I think they\u2019re spending discretionary money on eating out, travel, etc.<\/p>\n<p>[00:05:35]\u00a0But I don\u2019t think this properly reflects it. In any case, this tells me they have money to use. So we could redirect this money. We could invest it aggressively. We can save it. We could pay off that debt. There\u2019s a lot we can do, which gets me excited. But I suspect that this goes a lot deeper. In Dawn\u2019s application, she mentioned that she spends too much on her son who \u201chas no concept of money.\u201d<\/p>\n<p>[00:06:03]\u00a0She mentioned resentment about how Dawn and Rich spend money together. She mentioned that they\u2019ve even put off getting married because of money. So we have a lot to unpack here. I\u2019m excited to get a chance to speak to them.<\/p>\n<p>[Interview]<\/p>\n<p>[00:06:15]\u00a0<strong>Dawn:<\/strong>\u00a0I have a family. My money goes to supporting my children, my home, my house. Financial stability is number one on my list of what I need, and we\u2019re engaged. And so I think part of me, we haven\u2019t gone to the next level, one, for money, but for two, I need to feel secure. So we\u2019re not on the same page many times. I\u2019d say back in February was one of the times that we were really\u2013<\/p>\n<p>[00:06:41]\u00a0<strong>Richard:<\/strong>\u00a0Last year.<\/p>\n<p>[00:06:42]\u00a0<strong>Dawn:<\/strong>\u00a0Struggling.<\/p>\n<p>[00:06:42]\u00a0<strong>Ramit:<\/strong>\u00a0What happened in February?<\/p>\n<p>[00:06:44]\u00a0<strong>Dawn:<\/strong>\u00a0He moved in. And that was when it really became more of a struggle that we\u2019re not on the same page, where, how much money he should give to the household.<\/p>\n<p>[00:06:57]\u00a0<strong>Richard:<\/strong>\u00a0She would give me just a relative number.<\/p>\n<p>[00:07:00]\u00a0<strong>Dawn:<\/strong>\u00a0Give me 200 a week. That will at least help me. But then as you talked about, you didn\u2019t want to be without money for yourself.<\/p>\n<p>[00:07:09]\u00a0<strong>Richard:<\/strong>\u00a0We moved into a house that had a lot of love to be put into it. Just a fixer upper. It wasn\u2019t move in ready. So inconsistently, I would give money. I\u2019d give money here and here, but I took money that I would have and put it into the house as far as fixing it.<\/p>\n<p>[00:07:26]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So you\u2019re putting money in sporadically in different ways, not necessarily handing over 200 a week, but contributing in other ways.<\/p>\n<p>[00:07:33]\u00a0<strong>Richard:<\/strong>\u00a0Yes.<\/p>\n<p>[00:07:35]\u00a0<strong>Dawn:<\/strong>\u00a0So I\u2019m struggling to pay the mortgage and things like that, and so I\u2019m not seeing consistent money coming into me. The 200 I wasn\u2019t seeing every week. It was like one week it\u2019d be 100. The next week it\u2019d be 200.<\/p>\n<p>[00:07:49]\u00a0<strong>Ramit:<\/strong>\u00a0Were you struggling before he moved in?<\/p>\n<p>[00:07:53]\u00a0<strong>Dawn:<\/strong>\u00a0I was struggling before he moved in, but things were different economy wise. My daughter, we redid the basement, so she had an apartment down there. So she lived down there and was giving me money towards that. She has since moved out. It was perfect timing. He moved in. So I was like, \u201cOkay, that will help.\u201d But then it was very inconsistent. So I never knew if I was getting money from him.<\/p>\n<p>[00:08:18]\u00a0So that\u2019s been our fight, how to put our money together, because I feel like he\u2019s paying me rent. He\u2019s not really into putting our finances together because of some of his past stuff. So I didn\u2019t know how to do it. I\u2019ve never done that before. I\u2019ve never had anyone move in with me, and I was married. So it was different.<\/p>\n<p>[00:08:38]\u00a0<strong>Ramit:<\/strong>\u00a0How many times were you married before?<\/p>\n<p>[00:08:39]\u00a0<strong>Dawn:<\/strong>\u00a0Twice.<\/p>\n<p>[00:08:40]\u00a0<strong>Ramit:<\/strong>\u00a0Twice. Okay. So you\u2019ve never had somebody move in, not married, and figure out how to deal with the money together.<\/p>\n<p>[00:08:48]\u00a0<strong>Dawn:<\/strong>\u00a0Correct.<\/p>\n<p>[00:08:48]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. And when you said, it feels like he\u2019s paying rent, is that a good or bad feeling?<\/p>\n<p>[00:08:54]\u00a0<strong>Dawn:<\/strong>\u00a0That\u2019s a bad feeling because it just feels like all the financial- I pay all the bills in the house. I pay the household bills. He pays his bills. But I pay all the household bills. So if I\u2019m late on something or can\u2019t make rent, that stress is all on me.<\/p>\n<p>[00:09:10]\u00a0<strong>Ramit:<\/strong>\u00a0And out of curiosity, if Richard were not here, how would you be dealing financially?<\/p>\n<p>[00:09:17]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019d be struggling.<\/p>\n<p>[00:09:18]\u00a0<strong>Ramit:<\/strong>\u00a0What would you do?<\/p>\n<p>[00:09:19]\u00a0<strong>Dawn:<\/strong>\u00a0Get a second job.<\/p>\n<p>[00:09:21]\u00a0<strong>Ramit:<\/strong>\u00a0So you began these conversations, and you said, I\u2019m putting money here. I\u2019m putting money there. How did you resolve it?<\/p>\n<p>[00:09:31]\u00a0<strong>Dawn:<\/strong>\u00a0We almost broke up. It was talking about him leaving. But I said, I just need consistency at least. I need you at least to show me consistency. Let\u2019s start with that.<\/p>\n<p>[00:09:43]\u00a0<strong>Richard:<\/strong>\u00a0I\u2019ve been more consistent as far as funding and money dispersed in the house.<\/p>\n<p>[00:09:47]\u00a0<strong>Ramit:<\/strong>\u00a0How much?<\/p>\n<p>[00:09:47]\u00a0<strong>Richard:<\/strong>\u00a0250 a week. 225, 250.<\/p>\n<p>[00:09:50]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah, anywhere from 200 to 250 a week he\u2019s been giving.<\/p>\n<p>[00:09:52]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, so does that work? Is the problem solved?<\/p>\n<p>[00:09:55]\u00a0<strong>Dawn:<\/strong>\u00a0No.<\/p>\n<p>[00:09:56]\u00a0<strong>Richard:<\/strong>\u00a0Yeah, no.<\/p>\n<p>[00:09:57]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, wait, what? This was the problem. You asked for the solution. It sounds like you got the solution you wanted.<\/p>\n<p>[00:10:03]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[00:10:05]\u00a0<strong>Ramit:<\/strong>\u00a0Why are we here?<\/p>\n<p>[00:10:06]\u00a0<strong>Dawn:<\/strong>\u00a0Because I guess I thought we would have extra money that we could\u2013 because that was our plan. Like, oh, we\u2019ll each put like 50 into a savings for this, and we\u2019ll have an emergency fund. But then I realized when he gives me the 200, it still just pays the bills. There\u2019s still not a lot of extra. We\u2019re just not doing any saving or anything. We have no emergency fund. We have nothing.<\/p>\n<p>[00:10:30]\u00a0<strong>Ramit:<\/strong>\u00a0Is this a problem for you, Richard?<\/p>\n<p>[00:10:32]\u00a0<strong>Richard:<\/strong>\u00a0It is. At the end of the day, we just want structure. I have the ability to put money aside, but it\u2019s, now where do I put it?<\/p>\n<p>[00:10:42]\u00a0<strong>Ramit:<\/strong>\u00a0You said you wanted structure. Did you have structure in your finances before you met Dawn?<\/p>\n<p>[00:10:49]\u00a0<strong>Richard:<\/strong>\u00a0I would say yes. There\u2019s a lot there. So I met Dawn. I had an ex-girlfriend. Before that there was an ex-fianc\u00e9, a home, finances, and just the whole thing was a structure. Yes.<\/p>\n<p>[00:11:05]\u00a0<strong>Ramit:<\/strong>\u00a0Who ran the finances in that relationship?<\/p>\n<p>[00:11:08]\u00a0<strong>Richard:<\/strong>\u00a0We had joint finances, but we had a number of different, I would say, accounts that one paid the bills, one for the cars, one for fun money. It all just went in. We had money. It was good. We were good financially, but then after a while she lost her job.<\/p>\n<p>[00:11:26]\u00a0She wanted to take over the finances, and she did that, and then just ultimately in the long run, it didn\u2019t end well. She wasn\u2019t paying anything, and things went into her own accounts, and in the end almost like a fallout, a breakup, lost the home, lost the money, sold off a camera equipment and a lot of different things.<\/p>\n<p>[00:11:47]\u00a0<strong>Dawn:<\/strong>\u00a0Shut down your business.<\/p>\n<p>[00:11:48]\u00a0<strong>Richard:<\/strong>\u00a0Yeah, shut down my business, and there was a lot of things that happened. I was in a rebuilding process for a long time before I met Dawn. I\u2019ve been through a lot, and yeah, if you want to join finances\u2013 because I know her good heart. You know what I mean? Good person, beautiful, amazing. You know what I mean? I know there\u2019s no wrong to be had there in the end.<\/p>\n<p>[00:12:09]\u00a0<strong>Ramit:<\/strong>\u00a0Are you saying you are open to joining finances?<\/p>\n<p>[00:12:12]\u00a0<strong>Richard:<\/strong>\u00a0Absolutely, absolutely.<\/p>\n<p>[00:12:13]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, just out of curiosity, how long have two of you been together?<\/p>\n<p>[00:12:17]\u00a0<strong>Dawn:<\/strong>\u00a0Three years.<\/p>\n<p>[00:12:18]\u00a0<strong>Ramit:<\/strong>\u00a0Three years. And how come you haven\u2019t joined it yet?<\/p>\n<p>[00:12:21]\u00a0<strong>Dawn:<\/strong>\u00a0I think a lot of it is his last girlfriend that he lived with was asking him for a lot of money and he was always like,\u201d I gave her everything.\u201d He had no money for himself. So he\u2019s worried that\u2013<\/p>\n<p>[00:12:34]\u00a0<strong>Richard:<\/strong>\u00a0Yeah. I didn\u2019t make a lot because, from my previous experience, I had a lot of debt, a lot of wage garnishments and everything like this. Everything in my past I\u2019ve already paid my dues.<\/p>\n<p>[00:12:45]\u00a0<strong>Ramit:<\/strong>\u00a0Why were the wages garnished?<\/p>\n<p>[00:12:46]\u00a0<strong>Richard:<\/strong>\u00a0Just ran up credit cards.<\/p>\n<p>[00:12:49]\u00a0<strong>Ramit:<\/strong>\u00a0What?<\/p>\n<p>[00:12:50]\u00a0<strong>Dawn:<\/strong>\u00a0For ex-fianc\u00e9.<\/p>\n<p>[00:12:51]\u00a0<strong>Interview:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:12:53]\u00a0<strong>Ramit:<\/strong>\u00a0Like for what?<\/p>\n<p>[00:12:55]\u00a0<strong>Richard:<\/strong>\u00a0Just random things. I don\u2019t know to this day.<\/p>\n<p>[00:12:58]\u00a0<strong>Ramit:<\/strong>\u00a0Would you say that you\u2019re on top of your finances?<\/p>\n<p>[00:13:01]\u00a0<strong>Richard:<\/strong>\u00a0I would say yes, it\u2019s very minimal. It\u2019s very, very minimal.<\/p>\n<p>[00:13:05]\u00a0<strong>Ramit:<\/strong>\u00a0Listening to Richard talk about his past experience with finances, anything surprise you?<\/p>\n<p>[00:13:12]\u00a0<strong>Dawn:<\/strong>\u00a0No.<\/p>\n<p>[00:13:13]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What do you make of the journey that he\u2019s been on?<\/p>\n<p>[00:13:18]\u00a0<strong>Dawn:<\/strong>\u00a0I guess a couple of things come to mind. I do think he needs to be a little more aware, because one happened when we were together. His wages were being garnished, and I was like, \u201cWell, do you know what it\u2019s for?\u201d He\u2019s like, \u201cNo.\u201d And I\u2019m like, \u201cFight it.\u201d I\u2019m a little different. I will call and be like, \u201cWhat\u2019s this for?\u201d And find out and fight it. And if there\u2019s a late fee, I\u2019ll call them and say, \u201cThis happened. Can I not get that?\u201d I\u2019m a little more aggressive in that sense.<\/p>\n<p>[00:13:47]\u00a0<strong>Ramit:<\/strong>\u00a0Richard, how does your journey with money affect your relationship with it today?<\/p>\n<p>[00:13:53]\u00a0<strong>Richard:<\/strong>\u00a0A lot of stress. There\u2019s not one day that goes by where I\u2019m just punching mathematics, doing problems in my head, moving things around, just bills and numbers. Yeah. Because I have the feeling that one day you could lose it. There\u2019s been times I will go to the store and I\u2019m almost afraid to spend money.<\/p>\n<p>[00:14:16]\u00a0<strong>Ramit:<\/strong>\u00a0Have you always thought I could lose it all?<\/p>\n<p>[00:14:20]\u00a0<strong>Richard:<\/strong>\u00a0Oh, absolutely. I\u2019ve always had a pretty good income. Single, mostly. I\u2019ve had my relationships, but yeah, it was a lot more simple.<\/p>\n<p>[00:14:33]\u00a0<strong>Ramit:<\/strong>\u00a0When you were single, did you get ahead with money?<\/p>\n<p>[00:14:38]\u00a0<strong>Richard:<\/strong>\u00a0There\u2019s been some times in my life where, yes, I didn\u2019t know was pretty ahead with money. Yeah.<\/p>\n<p>[00:14:43]\u00a0<strong>Ramit:<\/strong>\u00a0What was money like for you then? What\u2019d you do with it?<\/p>\n<p>[00:14:46]\u00a0<strong>Richard:<\/strong>\u00a0Invested in my business as far as gear, camera equipment, and things like this upgrade, clothes.<\/p>\n<p>[00:14:55]\u00a0<strong>Ramit:<\/strong>\u00a0Did you save?<\/p>\n<p>[00:14:56]\u00a0<strong>Richard:<\/strong>\u00a0I did.<\/p>\n<p>[00:14:57]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019d you put the money?<\/p>\n<p>[00:14:58]\u00a0<strong>Richard:<\/strong>\u00a0I had a 401k. I had a savings. Paid the principal on my car and everything like this, but then what happened to me is I just lost it all. There was a lot that happened in a short period of the time where I just needed money.<\/p>\n<p>[00:15:13]\u00a0<strong>Ramit:<\/strong>\u00a0And you cashed out the 401k?<\/p>\n<p>[00:15:15]\u00a0<strong>Richard:<\/strong>\u00a0Yes.<\/p>\n<p>[00:15:15]\u00a0<strong>Ramit:<\/strong>\u00a0What was that for?<\/p>\n<p>[00:15:16]\u00a0<strong>Richard:<\/strong>\u00a0There was a house in foreclosure. My car got repossessed. A credit card debt. Yeah. Just a lot of different things.<\/p>\n<p>[00:15:23]\u00a0<strong>Dawn:<\/strong>\u00a0She didn\u2019t pay anything.<\/p>\n<p>[00:15:24]\u00a0<strong>Richard:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:15:24]\u00a0<strong>Dawn:<\/strong>\u00a0She just took the money.<\/p>\n<p>[00:15:25]\u00a0<strong>Richard:<\/strong>\u00a0Took the money.<\/p>\n<p>[00:15:26]\u00a0<strong>Ramit:<\/strong>\u00a0That sucks.<\/p>\n<p>[00:15:27]\u00a0<strong>Richard:<\/strong>\u00a0In the long run it was almost bittersweet because all of it\u2019s paid. It\u2019s in the past. Not really, as far as like trauma and things you carry, but as far as everyday life, it almost started me out on a blank slate. I know I\u2019m behind. I\u2019m 43. You need a 401k. You need finances in the bank. Yeah.<\/p>\n<p>[00:15:48]\u00a0<strong>Dawn:<\/strong>\u00a0I have a pension with the New York State. So I was like, \u201cWhat are you going to do in 20 years? I\u2019m not paying for your retirement\u201d.<\/p>\n<p>[00:15:58]\u00a0<strong>Ramit:<\/strong>\u00a0Meaning if the two of you are married, you\u2019re not going to pay for him.<\/p>\n<p>[00:16:04]\u00a0<strong>Dawn:<\/strong>\u00a0My amount isn\u2019t going to cover mine and his. I don\u2019t have that big of a 401k. I don\u2019t want him to have to work. I want to travel some, or enjoy our retirement. Not that I\u2019m not going to pay for the home and stuff with my retirement, but he\u2019s going to need money. I\u2019m not going to have enough to give him.<\/p>\n<p>[Narration]<\/p>\n<p>[00:16:21]\u00a0<strong>Ramit:<\/strong>\u00a0I get a lot of requests to speak to couples with different income, especially lower incomes. Well, today we have Dawn and Richard, and as you listen, you\u2019re going to hear how money lessons are passed from one generation to another. And at times today\u2019s conversation\u2019s going to be really frustrating. I know it was for me. But I want to encourage you to keep listening.<\/p>\n<p>[00:16:41]\u00a0Let\u2019s recap. Dawn has been married twice. Richard moved in, and she asked him to pay. And he did. But now she feels like he\u2019s paying rent, which, again, he is. Yet that didn\u2019t even make her financial situation improve. When I asked what Dawn would be doing if Richard wasn\u2019t paying, she admitted she would be struggling.<\/p>\n<p>[00:17:01]\u00a0She also acknowledges that Richard helps in non-financial ways around the house. Now, Richard has a complex financial background. As he tells it, his previous fianc\u00e9 caused his wages to get garnished and destroyed his finances. Now, I don\u2019t know the details. I can only take his word for it. What I can see is that he\u2019s afraid to spend money today. And candidly, he\u2019s not in a good financial place.<\/p>\n<p>[00:17:27]\u00a0What really stands out to me is the total lack of a shared vision between the two of them. In fact, you\u2019ll notice that Dawn uses her finances almost as a weapon, saying, I have a pension. What are you going to do in 20 years? I\u2019m going to probe on the kind of vision they have together, but first, let\u2019s take a quick break to support our sponsors.<\/p>\n<p>[00:17:47]\u00a0Now, back to our conversation.<\/p>\n<p>[Interview]<\/p>\n<p>[00:17:48]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s the vision of the together thing that you want to build?<\/p>\n<p>[00:17:52]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019d like to do our finances together so I don\u2019t pay all the bills myself and all the stress is on me. I would like once a week we sit down and say, \u201cOkay, this is what we need to pay this week, and he\u2019ll be like, \u201cOkay. I\u2019ll take this, and go pay that.\u201d<\/p>\n<p>[00:18:06]\u00a0<strong>Ramit:<\/strong>\u00a0So share the responsibilities of bill pay. Okay. Got it. What else?<\/p>\n<p>[00:18:11]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019d like to have some joint savings that we\u2019re each putting some money into. I don\u2019t want to just have me put money in. I make more than him, so that\u2019s where we struggle a little bit. I want us both to put some money in so I feel like when we go on vacation or we have an emergency fund, it\u2019s not just all me, because then I feel like in time I\u2019m going to build resentments against that.<\/p>\n<p>[00:18:32]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What else?<\/p>\n<p>[00:18:33]\u00a0<strong>Richard:<\/strong>\u00a0Getting married. Yeah.<\/p>\n<p>[00:18:34]\u00a0<strong>Dawn:<\/strong>\u00a0Get married, purchase the house.<\/p>\n<p>[00:18:35]\u00a0<strong>Richard:<\/strong>\u00a0Purchase the house, have something you own. Number wise, the house, when you look at it on paper, it\u2019s a really good deal. But it\u2019s not hers yet.<\/p>\n<p>[00:18:44]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s a house that you\u2019re renting to own.<\/p>\n<p>[00:18:46]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[00:18:47]\u00a0<strong>Ramit:<\/strong>\u00a0You could own it or not. It\u2019s up to you.<\/p>\n<p>[00:18:51]\u00a0<strong>Dawn:<\/strong>\u00a0I could walk away. Yes.<\/p>\n<p>[00:18:53]\u00a0<strong>Ramit:<\/strong>\u00a0How much have you put into it?<\/p>\n<p>[00:18:55]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019d say probably 10 to 12,000 because we redid the basement.<\/p>\n<p>[00:19:01]\u00a0<strong>Ramit:<\/strong>\u00a0Ah. And if you were to buy it, how much would it cost?<\/p>\n<p>[00:19:04]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s my ex-husband. He takes 1,000 a month off of the sale price, so he was selling it to me for 330,000, and now I think we\u2019re at about 317, 315. So the longer I wait, the longer it goes down. So I\u2019m assuming like $300,000.<\/p>\n<p>[00:19:25]\u00a0<strong>Ramit:<\/strong>\u00a0How much would a house like that cost if you were to buy it?<\/p>\n<p>[00:19:28]\u00a0<strong>Dawn:<\/strong>\u00a0Right now it\u2019s about 495,000.<\/p>\n<p>[00:19:31]\u00a0<strong>Ramit:<\/strong>\u00a0Wow.<\/p>\n<p>[00:19:31]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:19:31]\u00a0<strong>Ramit:<\/strong>\u00a0So that\u2019s a good deal.<\/p>\n<p>[00:19:32]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s a huge deal. And it\u2019s because he\u2019s financially in a horrible position, and he wants me to have it because it\u2019s for our children. I thought about getting out of it, and I looked around to see, because I want to stay in the same school district for my son, and I can\u2019t find anything under 250,000 to 300,000.<\/p>\n<p>[00:19:52]\u00a0<strong>Richard:<\/strong>\u00a0There\u2019s nothing close to what we would buy that for.<\/p>\n<p>[00:19:55]\u00a0<strong>Ramit:<\/strong>\u00a0If you were to buy that, how much would it cost you per month?<\/p>\n<p>[00:20:01]\u00a0<strong>Dawn:<\/strong>\u00a0At least 2,000.<\/p>\n<p>[00:20:02]\u00a0<strong>Ramit:<\/strong>\u00a0So a little bit more than you\u2019re paying right now.<\/p>\n<p>[00:20:04]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:20:04]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. And if you were to rent?<\/p>\n<p>[00:20:06]\u00a0<strong>Dawn:<\/strong>\u00a0Two bedrooms where we are are about 2,000, somewhere in there.<\/p>\n<p>[00:20:09]\u00a0<strong>Ramit:<\/strong>\u00a0This makes sense. In certain low cost of living cities, it can be more expensive to rent or as expensive as it is to own.<\/p>\n<p>[00:20:16]\u00a0<strong>Dawn:<\/strong>\u00a0Right. I\u2019m in a better financial position monthly. I\u2019m going to pay more when I get a mortgage.<\/p>\n<p>[00:20:23]\u00a0<strong>Ramit:<\/strong>\u00a0How would you afford this house? How would you buy it?<\/p>\n<p>[00:20:27]\u00a0<strong>Dawn:<\/strong>\u00a0I have a house savings.<\/p>\n<p>[00:20:28]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:20:29]\u00a0<strong>Dawn:<\/strong>\u00a0I have 68,000.<\/p>\n<p>[00:20:32]\u00a0<strong>Ramit:<\/strong>\u00a0What? You have 68,000 in a house savings account?<\/p>\n<p>[00:20:35]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah, to buy the house. It was 100,000 when I started the process. But that\u2019s slowly dwindling down. We used it for the basement for my daughter to have a place down there.<\/p>\n<p>[00:20:47]\u00a0<strong>Ramit:<\/strong>\u00a0What do you think of that decision?<\/p>\n<p>[00:20:49]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah, financially, not the best. Both my daughters are in stable positions at this point. They both have children, so it\u2019s a spot for them to come back.<\/p>\n<p>[00:20:59]\u00a0<strong>Richard:<\/strong>\u00a0There\u2019s a lot of things with that house because it\u2019s very family-oriented, where it has a pool. It has the backyard, a patio. There\u2019s 10 grandchildren.<\/p>\n<p>[00:21:07]\u00a0<strong>Dawn:<\/strong>\u00a0I do have 10 grandchildren.<\/p>\n<p>[00:21:08]\u00a0<strong>Richard:<\/strong>\u00a0There\u2019s a lot of get togethers, a lot of parties.<\/p>\n<p>[00:21:10]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s always at my house.<\/p>\n<p>[00:21:10]\u00a0<strong>Richard:<\/strong>\u00a0The house totally fits the bill when it comes to that lifestyle.<\/p>\n<p>[00:21:14]\u00a0<strong>Ramit:<\/strong>\u00a0I appreciate that. And I know that parents, grandparents, it feels amazing to be able to have the house that everybody comes back to.<\/p>\n<p>[00:21:23]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[00:21:23]\u00a0<strong>Ramit:<\/strong>\u00a0I am trying to understand the financial side. How much did it cost to renovate the basement?<\/p>\n<p>[00:21:28]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019d say 9,000.<\/p>\n<p>[00:21:29]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, so you renovated for 9,000 in a house that you\u2019re renting, for which I don\u2019t mind. I\u2019ve put money into rentals I\u2019ve had because I want to live in a nice place. But I could afford it. How did you decide if you could afford that or not?<\/p>\n<p>[00:21:45]\u00a0<strong>Dawn:<\/strong>\u00a0Well, at the time I\u2019m just looking at, oh, I have 100,000. That\u2019s not something I normally have in my bank account. So it was like, it\u2019s not that big of a deal.<\/p>\n<p>[00:21:53]\u00a0<strong>Ramit:<\/strong>\u00a0So 100,000. And how much is it now?<\/p>\n<p>[00:21:56]\u00a0<strong>Dawn:<\/strong>\u00a068,000.<\/p>\n<p>[00:21:57]\u00a0<strong>Ramit:<\/strong>\u00a0Ah, what happened to the rest?<\/p>\n<p>[00:21:59]\u00a0<strong>Dawn:<\/strong>\u00a0We went on vacation.<\/p>\n<p>[00:22:00]\u00a0<strong>Ramit:<\/strong>\u00a0Oh. Where\u2019d you go?<\/p>\n<p>[00:22:02]\u00a0<strong>Dawn:<\/strong>\u00a0Outer banks.<\/p>\n<p>[00:22:02]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:22:03]\u00a0<strong>Dawn:<\/strong>\u00a0So that wasn\u2019t a huge, but I brought the whole family.<\/p>\n<p>[00:22:06]\u00a0<strong>Ramit:<\/strong>\u00a0How much?<\/p>\n<p>[00:22:08]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019d say probably 6,000.<\/p>\n<p>[00:22:11]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. 6k. What else?<\/p>\n<p>[00:22:12]\u00a0<strong>Richard:<\/strong>\u00a0This was really great that year.<\/p>\n<p>[00:22:15]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah. I just spent, not on anything for myself. House things. I paid off my car.<\/p>\n<p>[00:22:22]\u00a0<strong>Ramit:<\/strong>\u00a0Ah, what car was that?<\/p>\n<p>[00:22:23]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s 2015 Infiniti. I owed 12,000, so I paid that off to put me in a better financial place monthly. It was a high interest. It was 9%. I claimed bankruptcy eight years ago.<\/p>\n<p>[00:22:41]\u00a0<strong>Ramit:<\/strong>\u00a0What?<\/p>\n<p>[00:22:42]\u00a0<strong>Dawn:<\/strong>\u00a0When I got divorced the second time, I was in a home, and we had a ton of credit card debt because he had stopped working and wasn\u2019t paying any bills, and I wasn\u2019t making a lot of money. So we lived on credit cards. I did have a prenup, so when he left, he left with nothing, but then it\u2019s all on me. I could not afford the bills. I couldn\u2019t afford my car payment. So I claimed bankruptcy.<\/p>\n<p>[00:23:07]\u00a0<strong>Ramit:<\/strong>\u00a0What did it feel like to make the decision to declare bankruptcy?<\/p>\n<p>[00:23:10]\u00a0<strong>Dawn:<\/strong>\u00a0It was a hard decision for me. In the long run after it felt good just it was a clean slate. I had my car and my house, but all the credit card debt and all that was gone.<\/p>\n<p>[00:23:23]\u00a0<strong>Ramit:<\/strong>\u00a0Do you notice the similarity in your journeys?<\/p>\n<p>[00:23:27]\u00a0<strong>Dawn:<\/strong>\u00a0Yes, it is what brought us together.<\/p>\n<p>[Narration]<\/p>\n<p>[00:23:29]\u00a0<strong>Ramit:<\/strong>\u00a0A lot of this is hard for me to hear. When I ask about what they want to build together, I hear, I want us to split the bills, I want us to talk about money, and eventually I want us to own a home because you should own something of your own. It\u2019s a simple set of goals, even simplistic.<\/p>\n<p>[00:23:50]\u00a0Then I hear Dawn had $100,000 but tapped into it for vacations, a car, and a basement renovation. This is after declaring bankruptcy. Which is just another reminder of how hard it is to actually change your financial behavior. Then Dawn says that she and Richard came together after their respective financial history.<\/p>\n<p>[00:24:13]\u00a0And that is a huge red flag because people who bond over trauma can often solidify and weave that trauma into their own relationship dynamic. Let\u2019s hear from Dawn about how growing up with money impacted her money psychology today.<\/p>\n<p>[Interview]<\/p>\n<p>[00:24:28]\u00a0<strong>Ramit:<\/strong>\u00a0What do you remember hearing about money in your household?<\/p>\n<p>[00:24:31]\u00a0<strong>Dawn:<\/strong>\u00a0Only the fighting. It was always, we don\u2019t have enough. Money was fought about in my house all the time. My dad owned a business, and my mom worked two jobs, and he never could pay the bills. It was just constant fighting back and forth about not having enough, not having enough, which I understand as a mom how that would be if she\u2019s working two jobs.<\/p>\n<p>[00:24:54]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:24:54]\u00a0<strong>Dawn:<\/strong>\u00a0And he was like, \u201cWell, I am paying the bills.\u201d<\/p>\n<p>[00:24:56]\u00a0<strong>Ramit:<\/strong>\u00a0Does that sound familiar to you?<\/p>\n<p>[00:24:57]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:24:58]\u00a0<strong>Ramit:<\/strong>\u00a0In what way?<\/p>\n<p>[00:24:59]\u00a0<strong>Dawn:<\/strong>\u00a0It sounds like me.<\/p>\n<p>[00:25:00]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. And whatever happened with your parents and money?<\/p>\n<p>[00:25:05]\u00a0<strong>Dawn:<\/strong>\u00a0They divorced.<\/p>\n<p>[00:25:06]\u00a0<strong>Ramit:<\/strong>\u00a0What else do you remember your family discussing about money?<\/p>\n<p>[00:25:10]\u00a0<strong>Dawn:<\/strong>\u00a0Just we\u2019d never had enough. It was always we never had enough. We\u2019d go grocery shopping and we\u2019d always have to watch what we would buy per se. I never went without. But my mother did what I do. She never said no.<\/p>\n<p>[00:25:25]\u00a0<strong>Ramit:<\/strong>\u00a0Wow.<\/p>\n<p>[00:25:26]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah. I was bratty. And if I wanted something, a new Barbie house or something like that, I would get it, even if they didn\u2019t have money. Very similar situation to now.<\/p>\n<p>[00:25:37]\u00a0<strong>Ramit:<\/strong>\u00a0What lessons do you take away from that looking back?<\/p>\n<p>[00:25:40]\u00a0<strong>Dawn:<\/strong>\u00a0I wish my parents taught me more about money and how to be financially stable. I wish I did that to my children because they\u2019re in different situations. They had children younger. But I wish there was more talk about it in a positive way.<\/p>\n<p>[00:25:56]\u00a0<strong>Ramit:<\/strong>\u00a0What would that have looked like?<\/p>\n<p>[00:25:58]\u00a0<strong>Dawn:<\/strong>\u00a0Instead of fighting about it and me hearing about the fighting, maybe sitting down and actually knowing what was going on.<\/p>\n<p>[00:26:06]\u00a0<strong>Ramit:<\/strong>\u00a0Looking at where you are now and looking back at your journey from growing up to these two marriages, where would you have thought that you would be financially speaking?<\/p>\n<p>[00:26:17]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019m much better than I thought I would be because I didn\u2019t have a degree. I went to college. I went and got my substance abuse counselor after that. And now I\u2019m an investigator. So I make more money now than I ever thought I would ever make. And compared to some people, it\u2019s not a lot, but for me, it\u2019s a ton. When you look at me like as a single mom, I\u2019ve never been without a home. I\u2019ve never been without a job, a car. My kids don\u2019t go without.<\/p>\n<p>[00:26:45]\u00a0<strong>Richard:<\/strong>\u00a0Works very hard. Very, very ambitious.<\/p>\n<p>[00:26:48]\u00a0<strong>Ramit:<\/strong>\u00a0I appreciate the gratitude. I really do. That\u2019s really cool. Okay.<\/p>\n<p>[00:26:52]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah. I try to think of that sometimes, but it\u2019s hard because I still struggle. And I\u2019m like, I make this much money. Why am I still struggling? But it\u2019s because I live above my means in some ways. I spend too much.<\/p>\n<p>[00:27:05]\u00a0<strong>Ramit:<\/strong>\u00a0You do?<\/p>\n<p>[00:27:06]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah. On my kids. Yeah.<\/p>\n<p>[00:27:07]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. How old are your kids?<\/p>\n<p>[00:27:09]\u00a0<strong>Dawn:<\/strong>\u00a025 and 22 are my girls. And they have children. So my one daughter, my 25-year-old has one daughter, and then her fianc\u00e9 has five kids.<\/p>\n<p>[00:27:20]\u00a0<strong>Ramit:<\/strong>\u00a0Two-year-old\u2013<\/p>\n<p>[00:27:21]\u00a0<strong>Dawn:<\/strong>\u00a0My 22-year-old is pregnant with her third child.<\/p>\n<p>[00:27:25]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:27:25]\u00a0<strong>Dawn:<\/strong>\u00a0And then her fianc\u00e9 has one. So they have four.<\/p>\n<p>[00:27:29]\u00a0<strong>Ramit:<\/strong>\u00a0And let\u2019s talk about your son. How old is he?<\/p>\n<p>[00:27:30]\u00a0<strong>Dawn:<\/strong>\u00a0My son is 12. He\u2019s with my second husband. He\u2019s tough. He\u2019s tough. He wants a lot. Every day there\u2019s something he wants. Just yesterday, he sent me three things he wants, and I\u2019m like, \u201cWell, maybe for Christmas.\u201d They\u2019re 125-dollar jackets that he wants.<\/p>\n<p>[00:27:48]\u00a0<strong>Ramit:<\/strong>\u00a0Can we see? Well, he has very good taste. It says Nike Tech Men\u2019s Full Zip Windrunner Hoodie. It looks pretty cool. I have to say it looks pretty cool.<\/p>\n<p>[00:28:00]\u00a0<strong>Dawn:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:28:00]\u00a0<strong>Ramit:<\/strong>\u00a0So he doesn\u2019t even say like, \u201cCan I have this, mom?\u201d<\/p>\n<p>[00:28:04]\u00a0<strong>Dawn:<\/strong>\u00a0No.<\/p>\n<p>[00:28:04]\u00a0<strong>Ramit:<\/strong>\u00a0He just sends the picture and the link.<\/p>\n<p>[00:28:06]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:28:07]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s your reaction when you get a text like this?<\/p>\n<p>[00:28:10]\u00a0<strong>Dawn:<\/strong>\u00a0Typically, I get upset with him, which is that doesn\u2019t help our relationship. I\u2019ll be like, \u201c[Bleep], I don\u2019t have that kind of money. So if that\u2019s something you want for Christmas, I\u2019ll add that to your list.\u201d Sometimes it\u2019s okay, but most of the time it\u2019s a meltdown. And sometimes I give in because I just don\u2019t want to deal with the reaction.<\/p>\n<p>[00:28:31]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s your ex-husband\u2019s take on this as well?<\/p>\n<p>[00:28:34]\u00a0<strong>Dawn:<\/strong>\u00a0My ex-husband doesn\u2019t spend money on him like that. He knows if he reacts poorly, that I\u2019m going to give in. When I had my girls, I was in my 20s. I had a lot more tolerance. Yeah, that\u2019s the word, tolerance. Now I\u2019m tired. And I also work, and I didn\u2019t work with them. So I\u2019m working hard. I have the house. I have the grandkids that I\u2019m\u2013<\/p>\n<p>[00:28:56]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s a lot to juggle.<\/p>\n<p>[00:28:56]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah. So it\u2019s just sometimes I just don\u2019t want to deal with it. And he knows that.<\/p>\n<p>[00:29:00]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s a good explanation. Can you go beyond the explanation and tell me what will happen as this continues?<\/p>\n<p>[00:29:07]\u00a0<strong>Dawn:<\/strong>\u00a0Oh, I\u2019m creating a monster because he wants what everyone else has. And in a way, I struggled with that for a very long time.<\/p>\n<p>[00:29:14]\u00a0<strong>Ramit:<\/strong>\u00a0You did?<\/p>\n<p>[00:29:15]\u00a0<strong>Dawn:<\/strong>\u00a0I really, really struggled with comparing myself. And I still do in some sorts. Facebook\u2019s horrible because I see all these vacations and people are in Italy, Spain, and Caribbean. And I\u2019m like, \u201cI want to go.\u201d I work really hard. I want to go. And that\u2019s where I go back and forth with some days. I\u2019m like, \u201cI need to save and have a future.\u201d And then other days I\u2019m like, \u201cI can\u2019t bring it with you.\u201d So I do struggle with that sometimes.<\/p>\n<p>[00:29:41]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s trace the pattern here.<\/p>\n<p>[00:29:42]\u00a0<strong>Dawn:<\/strong>\u00a0Okay.<\/p>\n<p>[00:29:43]\u00a0<strong>Ramit:<\/strong>\u00a0You were young. You wanted a Barbie house. Mom said fine, even though they were fighting about money and never had enough. You wanted X. You wanted Y. You got it. Your 12-year-old wants a Nike tracksuit. He\u2019s probably going to get the tracksuit. So what happens? What do you see in this story?<\/p>\n<p>[00:30:04]\u00a0<strong>Dawn:<\/strong>\u00a0Well, it\u2019s going to be a repeat. I know that\u2019s part of his issue with combining our incomes. And I don\u2019t blame him because he\u2019s going to give me all his money and then I\u2019m going to spend it all on my kid. And I get that. I do get that. But I\u2019m hoping if we\u2019re doing it together, at that point, I want to change my son\u2019s outlook on money.<\/p>\n<p>[00:30:24]\u00a0<strong>Ramit:<\/strong>\u00a0So you believe that when you have more money at your disposal, you\u2019re going to stop saying yes to your son.<\/p>\n<p>[00:30:30]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:30:31]\u00a0<strong>Ramit:<\/strong>\u00a0Doesn\u2019t strike me as true.<\/p>\n<p>[Narration]<\/p>\n<p>[00:30:32]\u00a0<strong>Ramit:<\/strong>\u00a0We are seeing how easily we can replicate past family patterns right on to the next generation. Dawn\u2019s 25-year-old daughter has six kids with her fianc\u00e9. Her 22-year-old daughter has four kids with her fianc\u00e9. Her 12-year-old son is extremely spoiled, and Dawn admits that she is creating \u201ca monster.\u201d<\/p>\n<p>[00:30:53]\u00a0I was honestly shocked when I saw those text messages. He just sent links of things he wanted. He did not say please. He did not even ask. He just added links of what he wanted. And Dawn knows she\u2019s a pushover. She tells me that her ex-husband doesn\u2019t buy those things for her son, and he wouldn\u2019t ask him. Go back to her childhood and her mom bought her everything she wanted. Now she\u2019s replicating that for her son.<\/p>\n<p>[00:31:18]\u00a0Meanwhile, she directs her worries about money towards Richard. I want to get into their specific numbers, and we\u2019re going to open up their conscious spending plan after this break for our sponsors. But before we get to that, I need a quick favor from you. Hit that Subscribe button because it helps my team and me grow this channel.<\/p>\n<p>[00:31:36]\u00a0Now let\u2019s dig into Dawn and Richard\u2019s CSP.<\/p>\n<p>[Interview]<\/p>\n<p>[00:31:40]\u00a0<strong>Ramit:<\/strong>\u00a0Go ahead and read off the word in bold and then the full number next to it.<\/p>\n<p>[00:31:43]\u00a0<strong>Dawn:<\/strong>\u00a0Okay. Assets, 28,500; investments, 24,985; savings, 58,484; and debt 14,895. Total net worth 97,074.<\/p>\n<p>[00:32:03]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What do y\u2019all think of the numbers?<\/p>\n<p>[00:32:06]\u00a0<strong>Dawn:<\/strong>\u00a0I wish assets was higher, but I don\u2019t own a home, so that\u2019s why that\u2019s so low. Investment is not very big. I would like them all to be bigger.<\/p>\n<p>[00:32:14]\u00a0<strong>Richard:<\/strong>\u00a0I\u2019m pretty much the same, but that definitely could be worse. It\u2019s manageable. I\u2019d like the assets higher as well as the investments.<\/p>\n<p>[00:32:23]\u00a0<strong>Ramit:<\/strong>\u00a0What does this number mean to you, $97,000?<\/p>\n<p>[00:32:26]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s so low. But I guess I never thought of a net worth.<\/p>\n<p>[00:32:30]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019d you think about?<\/p>\n<p>[00:32:32]\u00a0<strong>Dawn:<\/strong>\u00a0Just what I owed.<\/p>\n<p>[00:32:33]\u00a0<strong>Ramit:<\/strong>\u00a0Meaning, how much do I owe every month for my car? How much do I need to pay my bills every month? And that\u2019s why you talk about weekly Richard, pay me 200 a week. I don\u2019t talk to anybody about week, ever. That\u2019s like saying, let\u2019s go for a walk. Let\u2019s walk 2,520 inches. Why would I talk in that term of measure?<\/p>\n<p>[00:32:56]\u00a0<strong>Dawn:<\/strong>\u00a0Right. It\u2019s very small.<\/p>\n<p>[00:32:57]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. But often, people who were not taught about money, they shrink their world down to the month or, in your case, even the week. And what is the effect of that when you talk about things on a weekly basis?<\/p>\n<p>[00:33:12]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t think it allows us to look towards a future at all. It\u2019s just paying what you pay. It\u2019s almost like going into a car salesman and saying, \u201cI don\u2019t want my payment to be over 500.\u201d Instead of actually looking at the numbers.<\/p>\n<p>[00:33:26]\u00a0<strong>Richard:<\/strong>\u00a0It shrinks your bubble. It shrinks your world. It\u2019s almost like it distorts your vision to look out into the future, the big picture.<\/p>\n<p>[00:33:34]\u00a0<strong>Ramit:<\/strong>\u00a0Right. So out of curiosity, how come you haven\u2019t looked at the big picture of money both of you?<\/p>\n<p>[00:33:42]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019ve been single in a sense of living alone for almost 12 years. So I\u2019ve never had to talk about it with anybody.<\/p>\n<p>[00:33:49]\u00a0<strong>Richard:<\/strong>\u00a0I would say my case was just adapting to it. I\u2019m big on adapting and fitting in.<\/p>\n<p>[00:33:55]\u00a0<strong>Ramit:<\/strong>\u00a0When you say that you adapt, when Dawn comes to you and says, \u201cI want 200 or 250 a week,\u201d your method of adapting is to do the fence, etc., but then eventually say like, \u201cOkay, here\u2019s 225 a week.\u201d Did you say to her, this is how much I can afford?<\/p>\n<p>[00:34:20]\u00a0<strong>Richard:<\/strong>\u00a0Not really. Just that I don\u2019t really make a lot of money. So my money only stretches so far. Do you know how much you can afford?<\/p>\n<p>[00:34:27]\u00a0<strong>Dawn:<\/strong>\u00a0We did it together. I sat down and said, \u201cLet\u2019s sit down and figure out.\u201d So I wanted to make sure he still had money for himself because that was a big thing. I\u2019m like, \u201cSo if we do your bills and what you get paid and you give me 200 a week, that leaves you enough for what you need.\u201d<\/p>\n<p>[00:34:43]\u00a0<strong>Ramit:<\/strong>\u00a0How much do you have left over every week?<\/p>\n<p>[00:34:47]\u00a0<strong>Richard:<\/strong>\u00a0150.<\/p>\n<p>[00:34:48]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. And what do you do with that 150?<\/p>\n<p>[00:34:50]\u00a0<strong>Richard:<\/strong>\u00a0Gas. I\u2019m a smoker.<\/p>\n<p>[00:34:52]\u00a0<strong>Ramit:<\/strong>\u00a0Do you notice that the way that both of you talk, there is no discussion about savings rate? None of that. It\u2019s, I have 150. It\u2019s enough to pay my gas and to smoke.<\/p>\n<p>[00:35:03]\u00a0<strong>Dawn:<\/strong>\u00a0Right. It\u2019s very, very weekly. It\u2019s just getting by.<\/p>\n<p>[00:35:07]\u00a0<strong>Ramit:<\/strong>\u00a0Is that okay with you?<\/p>\n<p>[00:35:08]\u00a0<strong>Dawn:<\/strong>\u00a0No.<\/p>\n<p>[00:35:09]\u00a0<strong>Richard:<\/strong>\u00a0No. We have the dreams.<\/p>\n<p>[00:35:11]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019ve tried to do budgets. I\u2019ve tried to do apps. I don\u2019t know if I just don\u2019t follow through.<\/p>\n<p>[00:35:15]\u00a0<strong>Ramit:<\/strong>\u00a0Do you think it\u2019s a budget that\u2019s the problem, that you don\u2019t have the right spreadsheet set up? I don\u2019t think it is.<\/p>\n<p>[00:35:20]\u00a0<strong>Dawn:<\/strong>\u00a0Probably not.<\/p>\n<p>[00:35:20]\u00a0<strong>Ramit:<\/strong>\u00a0What is it?<\/p>\n<p>[00:35:22]\u00a0<strong>Dawn:<\/strong>\u00a0I guess I don\u2019t really know. Saying no and actually taking control, like you said, of my finances and being like, \u201cNo, this is going to go in here,\u201d and being disciplined.<\/p>\n<p>[00:35:34]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What about for you, Richard? Why haven\u2019t you gone beyond the weekly basis? It\u2019s been 40-plus years.<\/p>\n<p>[00:35:42]\u00a0<strong>Richard:<\/strong>\u00a0In my case, it\u2019s what I make. I haven\u2019t made this amount a year since I was in my early 20s. With what I make a year, my ability to put money in, save money, how far can I actually stretch?<\/p>\n<p>[00:35:56]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re right. Maybe your income isn\u2019t high enough. We\u2019re going to get to that in a second. But if I were in your situation and I were talking to a partner who said, \u201cHey, I want you to contribute something to the household,\u201d I would definitely have that conversation. But if I can\u2019t afford to save any money every month and I can\u2019t afford to contribute, I need to be paying myself first. Meaning I need to be saving 20 bucks a week, 50 bucks a week, 50 bucks a month, whatever the number is. That\u2019s how I would think about it.<\/p>\n<p>[00:36:29]\u00a0<strong>Richard:<\/strong>\u00a0Okay.<\/p>\n<p>[00:36:30]\u00a0<strong>Ramit:<\/strong>\u00a0Anybody teach you that ever?<\/p>\n<p>[00:36:33]\u00a0<strong>Richard:<\/strong>\u00a0Not really. No.<\/p>\n<p>[Narration]<\/p>\n<p>[00:36:34]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m really glad that I get the chance to talk to Dawn and Richard because I want you to understand how most people in America grow up with money. Most people have never heard the word investment in their household ever. Their parents don\u2019t talk about it because they don\u2019t even know what investments are. What\u2019s the savings rate? How does retirement work? Parents don\u2019t know, so kids don\u2019t know, so their kids don\u2019t know. And the cycle simply continues.<\/p>\n<p>[00:37:02]\u00a0The truth is, most people grow up with simple money messages, very simple. Save money, make your own coffee at home, buy a house. And then they enter into a complex world with words like mortgages, deductibles, and expense ratios. It\u2019s almost unfair, almost. You\u2019ll notice that Dawn and Richard have not made a serious effort to learn about money.<\/p>\n<p>[00:37:29]\u00a0This is why I say that we can simultaneously call for systemic reform while encouraging personal responsibility. Pick up a book. Listen to podcasts. Start to focus time at least an hour a week at the beginning on your personal finances. It\u2019s one of the most important uses of your time in your entire life. Dawn and Richard are focused on paying weekly bills while the real problems are much, much bigger. But they don\u2019t even realize it.<\/p>\n<p>[Interview]<\/p>\n<p>[00:38:03]\u00a0<strong>Ramit:<\/strong>\u00a0Dawn, that urge you have to combine finances so that you can pay the bills, what do you notice about that?<\/p>\n<p>[00:38:10]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s me. Probably because I\u2019ve had to do things on my own, so I take control. I do it in the house too. Everything needs to be planned. If there\u2019s anything going on, I just\u2013<\/p>\n<p>[00:38:22]\u00a0<strong>Ramit:<\/strong>\u00a0Why didn\u2019t you plan more investments?<\/p>\n<p>[00:38:24]\u00a0<strong>Dawn:<\/strong>\u00a0I never really thought about it. Growing up, it was just the bills. It was always the bills. It was never investments. It was never, like I said, go to college to get a better job. I try to instill that in my children.<\/p>\n<p>[00:38:35]\u00a0<strong>Ramit:<\/strong>\u00a0You instill the saving, investing part in them.<\/p>\n<p>[00:38:38]\u00a0<strong>Dawn:<\/strong>\u00a0I think I try to but not with [Bleep]. I don\u2019t.<\/p>\n<p>[00:38:42]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s going to end up with his financial situation when he becomes an adult?<\/p>\n<p>[00:38:46]\u00a0<strong>Dawn:<\/strong>\u00a0He\u2019s going to struggle because if he wants $100, $100 every day, he better make a lot of money.<\/p>\n<p>[00:38:54]\u00a0<strong>Richard:<\/strong>\u00a0You come accustomed to getting what you want.<\/p>\n<p>[00:38:56]\u00a0<strong>Dawn:<\/strong>\u00a0Which I was.<\/p>\n<p>[00:38:58]\u00a0<strong>Ramit:<\/strong>\u00a0And now he will and probably his kids will.<\/p>\n<p>[00:39:02]\u00a0<strong>Dawn:<\/strong>\u00a0Probably. Which I\u2019d like to stop that.<\/p>\n<p>[00:39:04]\u00a0<strong>Ramit:<\/strong>\u00a0Really?<\/p>\n<p>[00:39:05]\u00a0<strong>Dawn:<\/strong>\u00a0I would like to make a plan and do it. I have been putting my foot down more with that. I was like, \u201cYou\u2019re not getting it. I don\u2019t have the money.\u201d<\/p>\n<p>[00:39:13]\u00a0<strong>Ramit:<\/strong>\u00a0You said that?<\/p>\n<p>[00:39:14]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[00:39:15]\u00a0<strong>Ramit:<\/strong>\u00a0How did that go?<\/p>\n<p>[00:39:15]\u00a0<strong>Dawn:<\/strong>\u00a0A couple of weeks ago, I had a surprise bill taken out, so my bank account was nothing. And I\u2019m like, \u201c[Bleep], I literally have $8 in my bank account. I don\u2019t have it.\u201d And then he\u2019s like, \u201cOh. Well, you should have told me.\u201d<\/p>\n<p>[00:39:31]\u00a0<strong>Ramit:<\/strong>\u00a0What has happened with the fact that he asks you for things all the time and he doesn\u2019t ask your ex?<\/p>\n<p>[00:39:37]\u00a0<strong>Dawn:<\/strong>\u00a0I think because his father wasn\u2019t around, and I overcompensated.<\/p>\n<p>[00:39:42]\u00a0<strong>Ramit:<\/strong>\u00a0First, I wish it wasn\u2019t guilt. I wish it was caring. And I wish you had that same care for yourself. The reason I wish you had that care for yourself is that by prioritizing yourself, you actually create a model for everyone in your family.<\/p>\n<p>[00:39:55]\u00a0<strong>Dawn:<\/strong>\u00a0Right.<\/p>\n<p>[00:39:56]\u00a0<strong>Ramit:<\/strong>\u00a0To see what it\u2019s like to have healthy boundaries, to see what it\u2019s like to prioritize things that are important for you. Still be generous, but to prioritize a healthy Rich Life. Let\u2019s look at the income. Richard, can you read off the combined current monthly income?<\/p>\n<p>[00:40:14]\u00a0<strong>Narration:<\/strong>\u00a010,251.<\/p>\n<p>[00:40:17]\u00a0<strong>Ramit:<\/strong>\u00a0I know you two have not combined your income, but just for simplicity, if you did, your household income would be $123,000. Did you know that?<\/p>\n<p>[00:40:26]\u00a0<strong>Dawn:<\/strong>\u00a0Not really.<\/p>\n<p>[00:40:27]\u00a0<strong>Ramit:<\/strong>\u00a0Richard?<\/p>\n<p>[00:40:27]\u00a0<strong>Richard:<\/strong>\u00a0No.<\/p>\n<p>[00:40:27]\u00a0<strong>Dawn:<\/strong>\u00a0It took a long time for him to even tell me what he made.<\/p>\n<p>[00:40:30]\u00a0<strong>Ramit:<\/strong>\u00a0Why?<\/p>\n<p>[00:40:32]\u00a0<strong>Richard:<\/strong>\u00a0I\u2019m not comfortable with what I make.<\/p>\n<p>[00:40:34]\u00a0<strong>Ramit:<\/strong>\u00a0So the income split here, 6,700 is for you, Dawn.<\/p>\n<p>[00:40:39]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[00:40:39]\u00a0<strong>Ramit:<\/strong>\u00a035 is for you, Richard.<\/p>\n<p>[00:40:40]\u00a0<strong>Dawn:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:40:41]\u00a0<strong>Ramit:<\/strong>\u00a0All right. And you net about 7,000 a month. Again, combined. But if you look at that, we make $123,000. What do you say?<\/p>\n<p>[00:40:53]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t think it\u2019s terrible. Of course, I\u2019d want to make more.<\/p>\n<p>[00:40:55]\u00a0<strong>Richard:<\/strong>\u00a0I\u2019d say it\u2019s almost average.<\/p>\n<p>[00:40:57]\u00a0<strong>Ramit:<\/strong>\u00a0I don\u2019t know too many small towns that make 123k average. That\u2019s a lot of money. You want me to look it up right now?<\/p>\n<p>[00:41:03]\u00a0<strong>Dawn:<\/strong>\u00a0Sure.<\/p>\n<p>[00:41:04]\u00a0<strong>Ramit:<\/strong>\u00a0The median income in your city is 57, 000. What does that tell you?<\/p>\n<p>[00:41:09]\u00a0<strong>Dawn:<\/strong>\u00a0That we\u2019re not doing poorly for where we live. So we might live above our means.<\/p>\n<p>[00:41:17]\u00a0<strong>Ramit:<\/strong>\u00a0What do you make of it, Richard, the fact that the two of you combined make double the median income in your town?<\/p>\n<p>[00:41:23]\u00a0<strong>Richard:<\/strong>\u00a0Very eye-opening. It\u2019s good. It\u2019s good news.<\/p>\n<p>[00:41:28]\u00a0<strong>Ramit:<\/strong>\u00a0For me, if I had just sat down and discovered that I make twice the median household income as what I thought, I would feel a lot of gratitude. We should give ourselves a pat on the back. We should appreciate how far we\u2019ve come, how hard we\u2019ve worked. And sometimes people become addicted to the feeling of struggle. It is all they know. And when I ask them, \u201cWhat if you didn\u2019t worry about money? What would you do?\u201d They go, \u201cI have no idea.\u201d<\/p>\n<p>[00:41:57]\u00a0The second thing I would feel is anger. Anger at why do we feel so behind if we make more than a lot of people in our area? What are we doing? And I would start to get mad. If I make that much, where\u2019s it going? Yeah. What are we doing wrong? Because it shouldn\u2019t be like this if we\u2019re making double what other people are making.<\/p>\n<p>[00:42:23]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah, absolutely.<\/p>\n<p>[00:42:24]\u00a0<strong>Ramit:<\/strong>\u00a0Shall we take a look at the fixed costs? All right. What was that laugh?<\/p>\n<p>[00:42:29]\u00a0<strong>Dawn:<\/strong>\u00a0Because mine are a 100%.<\/p>\n<p>[00:42:31]\u00a0<strong>Ramit:<\/strong>\u00a0Wow, your fixed costs are 100%.<\/p>\n<p>[00:42:32]\u00a0<strong>Dawn:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:42:34]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What does that tell you right there.<\/p>\n<p>[00:42:36]\u00a0<strong>Dawn:<\/strong>\u00a0That I have too much for what I make?<\/p>\n<p>[00:42:39]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, it tells me you\u2019re broke. You are literally spending more than you make every month.<\/p>\n<p>[00:42:43]\u00a0<strong>Dawn:<\/strong>\u00a0Absolutely.<\/p>\n<p>[00:42:43]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s where the money from your $100,000 is going. It will go away, and you will be left in extreme peril.<\/p>\n<p>[00:42:51]\u00a0<strong>Dawn:<\/strong>\u00a0It scares me, and I think that\u2019s where my stress comes up. And maybe that\u2019s where I portray it on to him, like, I need more money.<\/p>\n<p>[00:42:58]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. That is. You\u2019ll also see that stress manifesting in other ways in your financial life. How many times a week do you log into your accounts, look at the numbers, run calculations?<\/p>\n<p>[00:43:10]\u00a0<strong>Dawn:<\/strong>\u00a0I have it on my phone, right on the screen.<\/p>\n<p>[00:43:14]\u00a0<strong>Ramit:<\/strong>\u00a0Does it get you anything?<\/p>\n<p>[00:43:16]\u00a0<strong>Dawn:<\/strong>\u00a0No. Stress, that\u2019s what it gets me.<\/p>\n<p>[00:43:19]\u00a0<strong>Ramit:<\/strong>\u00a0Why do you do it then?<\/p>\n<p>[00:43:20]\u00a0<strong>Dawn:<\/strong>\u00a0Maybe habit.<\/p>\n<p>[00:43:22]\u00a0<strong>Ramit:<\/strong>\u00a0Remember when your kids were young. They have a blankie?<\/p>\n<p>[00:43:24]\u00a0<strong>Interview:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:43:25]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s your blankie. You log in, you feel this intensity, you click the button, you see the same familiar numbers, but there\u2019s this. There\u2019s that. It\u2019s a bit of stress. And then what do you feel at the end?<\/p>\n<p>[00:43:41]\u00a0<strong>Dawn:<\/strong>\u00a0Still stressed.<\/p>\n<p>[00:43:41]\u00a0<strong>Ramit:<\/strong>\u00a0Still stressed. But?<\/p>\n<p>[00:43:43]\u00a0<strong>Dawn:<\/strong>\u00a0Well, a little relief that I\u2019ve done it.<\/p>\n<p>[00:43:45]\u00a0<strong>Ramit:<\/strong>\u00a0I can make it this week.<\/p>\n<p>[00:43:47]\u00a0<strong>Dawn:<\/strong>\u00a0Correct. I have a little calendar that I have everything that comes out, and I look at it almost daily of, okay, this comes out today.<\/p>\n<p>[00:43:55]\u00a0<strong>Ramit:<\/strong>\u00a0Making $123,000, but talking about making calendars, like a child would make them to make sure they did their homework.<\/p>\n<p>[00:44:03]\u00a0<strong>Dawn:<\/strong>\u00a0Correct.<\/p>\n<p>[00:44:04]\u00a0<strong>Ramit:<\/strong>\u00a0I think there\u2019s a different way. One of the reasons I wanted to get a chance to speak to you was that sometimes we\u2019re just not taught this, and we are passed down conscious and unconscious messages from our family. We\u2019ve talked about them. Mom did this. I do this. Now my kids do this. In your case, Richard, things happen to you in your relationships. You were not in control of your money.<\/p>\n<p>[00:44:33]\u00a0It almost was like you were a passenger for some of this. Oddly enough, the journey you went through brought you two together, but you haven\u2019t rewritten the chapter of your life that you\u2019re in now, and you\u2019re just continuing the same trends, being passive with money, mistaking, observing your finances for being in control of your finances. And so I see this and I get alarmed. I look at your fixed cost, Dawn, I see 100%. I look at yours, Richard. Is this right? Dawn, are you paying less than Richard pays?<\/p>\n<p>[00:45:07]\u00a0<strong>Dawn:<\/strong>\u00a0Well, I pay all the other bills, so I guess when it comes to just rent.<\/p>\n<p>[00:45:11]\u00a0<strong>Richard:<\/strong>\u00a0The money I give her, I don\u2019t know where it goes. I\u2019ll just say bills.<\/p>\n<p>[00:45:16]\u00a0<strong>Ramit:<\/strong>\u00a0No. That\u2019s not acceptable to just say, \u201cShe wants 250, so I gave her 250. As long as she\u2019s okay, that\u2019s okay with me.\u201d No, you\u2019re in your 40s. You have to prioritize yourself first. You\u2019re not married. And similarly, Dawn, it\u2019s not acceptable to just say, I need 250 to cover my weekly bills because you\u2019ll be covering your weekly bills until one day you can\u2019t work anymore and now you\u2019re screwed.<\/p>\n<p>[00:45:38]\u00a0So this isn\u2019t acceptable. $723 a month for rent is what Dawn is paying. Richard is paying 1,000 a month. That doesn\u2019t make sense to me, but let\u2019s keep going down the list. Utilities, Dawn is paying all of them, $486 a month. So you\u2019re picking up more of the housing proportionally. I get it.<\/p>\n<p>[00:46:00]\u00a0Insurance, you\u2019re paying 238, Dawn. Car payments, 260 is what Dawn is paying per month. So I assume you have a paid off car. This is just your gas. And then, Richard, you got 506. You have a car payment still?<\/p>\n<p>[00:46:12]\u00a0<strong>Richard:<\/strong>\u00a0Yes.<\/p>\n<p>[00:46:13]\u00a0<strong>Ramit:<\/strong>\u00a0What kind of car?<\/p>\n<p>[00:46:14]\u00a0<strong>Richard:<\/strong>\u00a0It\u2019s a 2015 Jeep Cherokee.<\/p>\n<p>[00:46:16]\u00a0<strong>Ramit:<\/strong>\u00a0Does the thing break down a lot?<\/p>\n<p>[00:46:18]\u00a0<strong>Richard:<\/strong>\u00a0Doing pretty good.<\/p>\n<p>[00:46:19]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s starting to break down, and we want a truck.<\/p>\n<p>[00:46:22]\u00a0<strong>Ramit:<\/strong>\u00a0Wait. Hold on. Just explain the logic. We need a truck because we own a connection.<\/p>\n<p>[00:46:25]\u00a0<strong>Dawn:<\/strong>\u00a0I want a camper.<\/p>\n<p>[00:46:27]\u00a0<strong>Ramit:<\/strong>\u00a0Explain these words to me. What\u2019s a camper?<\/p>\n<p>[00:46:30]\u00a0<strong>Dawn:<\/strong>\u00a0An RV that you pull behind a truck.<\/p>\n<p>[00:46:32]\u00a0<strong>Ramit:<\/strong>\u00a0Oh my God, is this a joke? How many couples do I talk to that tell me they own a truck? I go, \u201cWhy do you own a truck?\u201d They go, \u201cI got to pull the boat.\u201d So you currently tow it behind what?<\/p>\n<p>[00:46:44]\u00a0<strong>Dawn:<\/strong>\u00a0I have to pay somebody to tow it. I have a membership to a campground, so we camp for free. We go camping for a couple of weeks in the summer. And that\u2019s our vacation.<\/p>\n<p>[00:46:55]\u00a0<strong>Ramit:<\/strong>\u00a0And how much does this camper cost in maintenance fees?<\/p>\n<p>[00:46:59]\u00a0<strong>Dawn:<\/strong>\u00a0I pay 500 a season to have it towed.<\/p>\n<p>[00:47:02]\u00a0<strong>Ramit:<\/strong>\u00a0And then you want to get a truck because you want to stop paying someone to tow it for you.<\/p>\n<p>[00:47:06]\u00a0<strong>Dawn:<\/strong>\u00a0Some of it. Yes. And then just household. When we\u2019re doing household things, like we have no way to get stuff to our\u2013 like lumber and things like that.<\/p>\n<p>[00:47:13]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Can I just say without even looking at the rest of the numbers, don\u2019t buy a truck. Do not buy a freaking truck right now.<\/p>\n<p>[00:47:20]\u00a0<strong>Dawn:<\/strong>\u00a0Okay.<\/p>\n<p>[00:47:20]\u00a0<strong>Ramit:<\/strong>\u00a0All right. 517 a month in debt payments for Dawn. What is that for?<\/p>\n<p>[00:47:25]\u00a0<strong>Dawn:<\/strong>\u00a0Credit cards.<\/p>\n<p>[00:47:27]\u00a0<strong>Ramit:<\/strong>\u00a0What? How many? How much in debt?<\/p>\n<p>[00:47:29]\u00a0<strong>Dawn:<\/strong>\u00a0I have a loan on my 401k because I needed the money back before my bankruptcy. I tried to do it that way first, pay things, and then I took out the rest for the camper.<\/p>\n<p>[00:47:43]\u00a0<strong>Ramit:<\/strong>\u00a0Why\u2019d you do that?<\/p>\n<p>[00:47:45]\u00a0<strong>Dawn:<\/strong>\u00a0Because I wanted a camper.<\/p>\n<p>[00:47:47]\u00a0<strong>Ramit:<\/strong>\u00a0What she grew up with.<\/p>\n<p>[00:47:48]\u00a0<strong>Dawn:<\/strong>\u00a0I had this membership\u2013<\/p>\n<p>[00:47:49]\u00a0<strong>Ramit:<\/strong>\u00a0I grew up eating Indian food five times a week. It doesn\u2019t mean I do it now.<\/p>\n<p>[00:47:52]\u00a0<strong>Dawn:<\/strong>\u00a0Well, that\u2019s my spoiledness of that part.<\/p>\n<p>[00:47:55]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, I wanted the Barbie house. I got the Barbie house. I wanted a camper. I got the camper.<\/p>\n<p>[00:47:59]\u00a0<strong>Dawn:<\/strong>\u00a0Right.<\/p>\n<p>[00:47:59]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Well, I will say that was a horrible decision, but a lot of people who take loans out don\u2019t even pay themselves back. So the fact that you\u2019re paying yourself back is better than most, and you have 40 bucks a month, Richard, in debt. What\u2019s that?<\/p>\n<p>[00:48:15]\u00a0<strong>Richard:<\/strong>\u00a0I have a personal loan. Yeah.<\/p>\n<p>[00:48:16]\u00a0<strong>Ramit:<\/strong>\u00a0How much is it for?<\/p>\n<p>[00:48:18]\u00a0<strong>Richard:<\/strong>\u00a0Right now the total is about 800, 850, around there.<\/p>\n<p>[00:48:24]\u00a0<strong>Ramit:<\/strong>\u00a0Groceries are 800 a month. That\u2019s for the three of you?<\/p>\n<p>[00:48:29]\u00a0<strong>Dawn:<\/strong>\u00a0Mm-hmm. I would love to get that down.<\/p>\n<p>[00:48:32]\u00a0<strong>Ramit:<\/strong>\u00a0Groceries are not the problem. That\u2019s fine. I have no comments. 800 bucks a month, fine. I\u2019ll take it all day.<\/p>\n<p>[00:48:37]\u00a0<strong>Dawn:<\/strong>\u00a0Okay. Yeah, that\u2019s the three of us. And if the kids come over, I\u2019ll make dinner.<\/p>\n<p>[00:48:41]\u00a0<strong>Ramit:<\/strong>\u00a0Phone is 150 for you and 125 for you, Richard. That\u2019s 275 total. Why is it so much?<\/p>\n<p>[00:48:47]\u00a0<strong>Dawn:<\/strong>\u00a0I pay for my children and then they pay me. We\u2019re on one together.<\/p>\n<p>[00:48:51]\u00a0<strong>Ramit:<\/strong>\u00a0And do they actually pay you?<\/p>\n<p>[00:48:52]\u00a0<strong>Dawn:<\/strong>\u00a0Well, they didn\u2019t used to, but I just took on my other daughter, so they said, let me know when you get it, and I\u2019ll pay it. So it\u2019s more me having to ask for it.<\/p>\n<p>[00:49:02]\u00a0<strong>Ramit:<\/strong>\u00a0How many text messages are you sending, time to pay me? How many meetings are you having with Richard, time to pay me?<\/p>\n<p>[00:49:09]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s a lot. I would love to not do that ever because that makes me feel like I\u2019m a debt collector.<\/p>\n<p>[00:49:16]\u00a0<strong>Ramit:<\/strong>\u00a0You are a debt collector.\u00a0That\u2019s the role you\u2019ve given yourself. Remember when I told you that the way you feel about money, that stress, will manifest itself in certain ways? What is this?<\/p>\n<p>[00:49:27]\u00a0<strong>Dawn:<\/strong>\u00a0More stress.<\/p>\n<p>[00:49:28]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. But what are you getting out of it? You go around to everyone. You knock on the town\u2019s doors, including your fianc\u00e9. Hey, it\u2019s time to pay me again. I feel horrible doing this. But in the end, what happens?<\/p>\n<p>[00:49:41]\u00a0<strong>Dawn:<\/strong>\u00a0I feel better once I get it.<\/p>\n<p>[00:49:42]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Ah, let that temporary sense of money wash over me and give me control.<\/p>\n<p>[00:49:49]\u00a0<strong>Dawn:<\/strong>\u00a0That\u2019s absolutely right. When I get his money, the 200 or 250, I feel better.<\/p>\n<p>[00:49:58]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:49:59]\u00a0<strong>Dawn:<\/strong>\u00a0Like I can breathe.<\/p>\n<p>[00:50:00]\u00a0<strong>Ramit:<\/strong>\u00a0Richard, I can see you are very observant about what\u2019s going on in the studio.<\/p>\n<p>[00:50:05]\u00a0<strong>Richard:<\/strong>\u00a0Love it.<\/p>\n<p>[00:50:06]\u00a0<strong>Ramit:<\/strong>\u00a0How long has it been since you\u2019ve been in the photography business?<\/p>\n<p>[00:50:11]\u00a0<strong>Richard:<\/strong>\u00a0Four or five years.<\/p>\n<p>[00:50:13]\u00a0<strong>Ramit:<\/strong>\u00a0What if you just never start the business?<\/p>\n<p>[00:50:14]\u00a0<strong>Richard:<\/strong>\u00a0If I never start the business, then I\u2019d have to dive into something that made a little more money.<\/p>\n<p>[00:50:21]\u00a0<strong>Ramit:<\/strong>\u00a0What do you do?<\/p>\n<p>[00:50:22]\u00a0<strong>Richard:<\/strong>\u00a0I do assets protection and logistics, and they\u2019re 12-hour days, Saturday, Sunday, Monday. Tuesday through Friday, all that\u2019s open to start a business.<\/p>\n<p>[00:50:33]\u00a0<strong>Ramit:<\/strong>\u00a0What do you currently do during that time?<\/p>\n<p>[00:50:35]\u00a0<strong>Richard:<\/strong>\u00a0Just the housework, organization, renovations. That\u2019s kind of nothing. I always say that\u2019s nothing for me.<\/p>\n<p>[00:50:43]\u00a0<strong>Ramit:<\/strong>\u00a0Well, it\u2019s something for me. I don\u2019t know how to do any of that stuff. If somebody was doing that, that\u2019s worth a lot of money. You know what I mean?<\/p>\n<p>[00:50:50]\u00a0<strong>Richard:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:50:50]\u00a0<strong>Dawn:<\/strong>\u00a0He works very hard at the house.<\/p>\n<p>[00:50:52]\u00a0<strong>Richard:<\/strong>\u00a0Yeah. I don\u2019t stop.<\/p>\n<p>[00:50:53]\u00a0<strong>Ramit:<\/strong>\u00a0Is there value in that?<\/p>\n<p>[00:50:54]\u00a0<strong>Dawn:<\/strong>\u00a0Oh, absolutely.<\/p>\n<p>[00:50:55]\u00a0<strong>Richard:<\/strong>\u00a0I save money. Yeah. There\u2019s money saved.<\/p>\n<p>[00:50:57]\u00a0<strong>Ramit:<\/strong>\u00a0Is there financial value besides just the money saved?<\/p>\n<p>[00:51:01]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019ve told him when we first talked about him starting his business, I\u2019m like, \u201cWhy don\u2019t you get something part time?\u201d And he\u2019s like, \u201cWell, I couldn\u2019t pay the bills.\u201d I\u2019m like, \u201cAll you need to do is pay your bills and just help out a little.\u201d But what you do in the house is so much more to me than financially, but at the same time, I don\u2019t want to struggle.<\/p>\n<p>[00:51:19]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s the balance that you\u2019ve decided on?<\/p>\n<p>[00:51:22]\u00a0<strong>Richard:<\/strong>\u00a0I work now, and the struggle is there, even though I\u2019m giving the money. I\u2019m told to work part time, grind my business, but we all know when you\u2019re starting out, it\u2019s up and down.<\/p>\n<p>[00:51:32]\u00a0<strong>Ramit:<\/strong>\u00a0What if Richard told you that looking at his finances, he can\u2019t contribute 250 a week? He can contribute 100 a week because he needs to prioritize his own retirement.<\/p>\n<p>[00:51:43]\u00a0<strong>Dawn:<\/strong>\u00a0I would be okay with that if I could get my finances under control more.<\/p>\n<p>[Narration]<\/p>\n<p>[00:51:49]\u00a0<strong>Ramit:<\/strong>\u00a0You can see that a lot of Dawn\u2019s financial struggles are due to her own decisions. She took out a loan on her 401k for a camper. When I asked her why, she said, \u201cBecause I wanted a camper.\u201d Now, of course, I\u2019m getting frustrated listening. And I know a lot of you want me to scream at Dawn and Richard, but this isn\u2019t a zoo. I\u2019m not here to create a spectacle with my guests.<\/p>\n<p>[00:52:10]\u00a0It might feel good to you, but I\u2019m not here to scream at them. I\u2019m here to try to help them live a Rich Life. This is why I\u2019m asking them lots of questions, and I\u2019m going slowly. I\u2019m letting them hear their own responses. When we get back from this short break, I\u2019m going to talk to Richard about what he wants. Let\u2019s keep going.<\/p>\n<p>[Interview]<\/p>\n<p>[00:52:30]\u00a0<strong>Richard:<\/strong>\u00a0If we didn\u2019t work out, I have the ability to bank half of my income.<\/p>\n<p>[00:52:36]\u00a0<strong>Ramit:<\/strong>\u00a0How?<\/p>\n<p>[00:52:37]\u00a0<strong>Richard:<\/strong>\u00a0My family owns a duplex apartment, and I can move in there rent free.<\/p>\n<p>[00:52:41]\u00a0<strong>Ramit:<\/strong>\u00a0How long can you do that for?<\/p>\n<p>[00:52:43]\u00a0<strong>Richard:<\/strong>\u00a0Forever. But that\u2019s not what I want.<\/p>\n<p>[00:52:46]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Very interesting. You want to live together, and you\u2019re willing to contribute in some way, financial, logistical, all the above so that you two can do that.<\/p>\n<p>[00:52:56]\u00a0<strong>Richard:<\/strong>\u00a0Yes.<\/p>\n<p>[00:52:57]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Hear you loud and clear. Let\u2019s keep going down the numbers here. So we are currently at 74% fixed costs, which is a lot. Well, it\u2019s 77% for Dawn, which is high, but fixable, and 69% for Richard, which is also high, but we can work with that. Okay. 74% joint fixed costs. Although again, you\u2019re not joint expenses. Your subscriptions by the way are 161 and 138 per month. Let\u2019s go down to the investments. Investments are zero, $0 being invested.<\/p>\n<p>[00:53:36]\u00a0<strong>Dawn:<\/strong>\u00a0I have a 401k, but it\u2019s pre-tax.<\/p>\n<p>[00:53:39]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So how much are you putting in that 401k?<\/p>\n<p>[00:53:41]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s about 120 a check.<\/p>\n<p>[00:53:45]\u00a0<strong>Ramit:<\/strong>\u00a0So 3,000 a year ballpark. Okay, fine. And what about you, Richard? Investments?<\/p>\n<p>[00:53:52]\u00a0<strong>Richard:<\/strong>\u00a0Nothing.<\/p>\n<p>[00:53:55]\u00a0<strong>Ramit:<\/strong>\u00a0How come?<\/p>\n<p>[00:53:56]\u00a0<strong>Richard:<\/strong>\u00a0Just trying to rebuild after things.<\/p>\n<p>[00:54:00]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Savings are at zero for everybody.<\/p>\n<p>[00:54:05]\u00a0<strong>Dawn:<\/strong>\u00a0Besides my house savings, which needs to go to buy the house, that\u2019s all. There\u2019s no savings.<\/p>\n<p>[00:54:10]\u00a0<strong>Ramit:<\/strong>\u00a0Down from 100 to 58. And going down every month, probably. Okay, let\u2019s look at guilt-free spending. Whoa! First of all, I don\u2019t believe these numbers. I know you\u2019re spending more than 993 a month on eating out, travel, etc., stuff for the kids. What happens at Christmas?<\/p>\n<p>[00:54:31]\u00a0<strong>Dawn:<\/strong>\u00a0Last Christmas, I probably took out of my savings.<\/p>\n<p>[00:54:35]\u00a0<strong>Richard:<\/strong>\u00a0Was either that or a lot of credit cards.<\/p>\n<p>[00:54:37]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah, one or the other. It\u2019s very stressful.<\/p>\n<p>[00:54:39]\u00a0<strong>Richard:<\/strong>\u00a0A lot of kids, a lot of family members.<\/p>\n<p>[00:54:42]\u00a0<strong>Ramit:<\/strong>\u00a0What I took away from that was, life happens to me. Not I decide what happens at Christmas. Another couple I could speak to could be making half of what you make, even a third of what you make, and they could say something like this. \u201cYou know what? We talked about it, and we saved up for the whole year. And each child gets one gift and we really spend Christmas together. We all watch a movie.\u201d<\/p>\n<p>[00:55:10]\u00a0Fraction of what I\u2019m sure you pay. But they decided. The world didn\u2019t decide. I also noticed that you said, \u201cI don\u2019t know what\u2019s going to happen this Christmas.\u201d What\u2019s that saying to me? So by saying, I don\u2019t know what happens, life is out of control for me. I don\u2019t know.<\/p>\n<p>[00:55:25]\u00a0<strong>Dawn:<\/strong>\u00a0Other people are going to tell me what happened.<\/p>\n<p>[00:55:28]\u00a0<strong>Ramit:<\/strong>\u00a0Exactly. And why is it that you\u2019re so afraid to decide what happens with your own money?<\/p>\n<p>[00:55:35]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t want to disappoint my children, maybe, and other people.<\/p>\n<p>[00:55:40]\u00a0<strong>Ramit:<\/strong>\u00a0What would be disappointing to them?<\/p>\n<p>[00:55:42]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t know with my girls, if they would be disappointed, really, because they\u2019re older and they\u2019re like, don\u2019t buy for me this year. Buy for the kids instead. I think they\u2019d be okay if I really said I don\u2019t have money. My son, it depends with him. He might be disappointed. It\u2019s the guilt. It\u2019s that overcompensating.<\/p>\n<p>[00:56:00]\u00a0<strong>Ramit:<\/strong>\u00a0If guilt is the primary driver for your financial behavior, you\u2019re going to guilt yourself right into running out of money.<\/p>\n<p>[00:56:06]\u00a0<strong>Dawn:<\/strong>\u00a0Which I\u2019ve done.<\/p>\n<p>[00:56:07]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Look at this number. You\u2019re down from 100k to 58k. It\u2019s going down.<\/p>\n<p>[00:56:11]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:56:12]\u00a0<strong>Ramit:<\/strong>\u00a0I don\u2019t know about you. I would not want to live my life based on reactive guilt. It just seems like you\u2019re always one step behind. No matter what you do, it\u2019s never enough.<\/p>\n<p>[00:56:23]\u00a0<strong>Dawn:<\/strong>\u00a0That\u2019s exactly how I feel.<\/p>\n<p>[00:56:25]\u00a0<strong>Ramit:<\/strong>\u00a0If we were to speak about money in a combined sense, you have $123,000. It\u2019s a good salary, particularly relative to the median salary in your area. You have an enviable housing situation, unbelievable. And in your case, Richard, if you need to, you could always go and live back for free. So you both have an enviable situation housing wise.<\/p>\n<p>[00:56:51]\u00a0<strong>Dawn:<\/strong>\u00a0Correct.<\/p>\n<p>[00:56:52]\u00a0<strong>Ramit:<\/strong>\u00a0But you have only $24,000 in investments, and you\u2019re investing very little. And if we run a calculation on how much you will have, I can show you, but it\u2019s going to be very little. You have a pension?<\/p>\n<p>[00:57:09]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[00:57:09]\u00a0<strong>Ramit:<\/strong>\u00a0How much is a pension going to pay you?<\/p>\n<p>[00:57:11]\u00a0<strong>Dawn:<\/strong>\u00a0Maybe 1,100 a month, 1,200 a month, something like that.<\/p>\n<p>[00:57:14]\u00a0<strong>Ramit:<\/strong>\u00a0Just so everybody knows, you\u2019re currently making 6,700 a month gross. So to go from that to 1,100, what would you do?<\/p>\n<p>[00:57:21]\u00a0<strong>Dawn:<\/strong>\u00a0I wouldn\u2019t be able to afford to live or get a job.<\/p>\n<p>[00:57:25]\u00a0<strong>Ramit:<\/strong>\u00a0So right now you don\u2019t have enough money to retire. You\u2019re not on track to have enough money. So I guess from the reactions you\u2019re both giving me, I feel more alarmed for your situation than you are. Why is that?<\/p>\n<p>[00:57:38]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019ve never had to really think about the future much. It\u2019s more, like you said, living the day.<\/p>\n<p>[00:57:44]\u00a0<strong>Ramit:<\/strong>\u00a0So here we are. What do you want to do? This is your chance.<\/p>\n<p>[00:57:47]\u00a0<strong>Dawn:<\/strong>\u00a0I want help.<\/p>\n<p>[00:57:49]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Tell me what you want to do.<\/p>\n<p>[00:57:50]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t want to be 70 years old and working a second job.<\/p>\n<p>[00:57:53]\u00a0<strong>Ramit:<\/strong>\u00a0Right now you\u2019re on track to do that.<\/p>\n<p>[00:57:54]\u00a0<strong>Dawn:<\/strong>\u00a0Yes. So I need to start putting more money into my 401k and investments.<\/p>\n<p>[00:58:01]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm. How are you going to do that?<\/p>\n<p>[00:58:03]\u00a0<strong>Dawn:<\/strong>\u00a0I need to get some of my fixed costs down so I have the money to put in there. If I didn\u2019t have the debt payments, but I do, so I don\u2019t know how to get those down besides just paying them off.<\/p>\n<p>[00:58:14]\u00a0<strong>Ramit:<\/strong>\u00a0Well, you could pay that off today if you wanted.<\/p>\n<p>[00:58:16]\u00a0<strong>Dawn:<\/strong>\u00a0With my 58,000. Yes. Which is what I did with my car. I don\u2019t think I can be in a better spot rent wise, mortgage wise, financially.<\/p>\n<p>[00:58:25]\u00a0<strong>Ramit:<\/strong>\u00a0I agree. Even if you were to downsize to a two or three bedroom, you\u2019d pretty much be paying the same.<\/p>\n<p>[00:58:30]\u00a0<strong>Dawn:<\/strong>\u00a0Right.<\/p>\n<p>[00:58:30]\u00a0<strong>Ramit:<\/strong>\u00a0But what about the basement that you spent $9,000 on? Is there an opportunity there?<\/p>\n<p>[00:58:36]\u00a0<strong>Dawn:<\/strong>\u00a0There is an opportunity there. It\u2019s just finding some way to utilize that with somebody.<\/p>\n<p>[00:58:43]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Somebody you trust. I totally hear you on that. But getting aggressive, putting the word out. But if somebody were to come in, how much rent would they pay you?<\/p>\n<p>[00:58:52]\u00a0<strong>Dawn:<\/strong>\u00a0800.<\/p>\n<p>[00:58:54]\u00a0<strong>Ramit:<\/strong>\u00a0800? Let\u2019s even say 700.<\/p>\n<p>[00:58:56]\u00a0<strong>Dawn:<\/strong>\u00a0Okay.<\/p>\n<p>[00:58:57]\u00a0<strong>Ramit:<\/strong>\u00a0That changes the whole game. Absolutely, it does. Okay, so that\u2019s a huge lever you have to pull as long as it is safe for your family.<\/p>\n<p>[00:59:05]\u00a0<strong>Dawn:<\/strong>\u00a0Right. Yeah. I have no problem with that.<\/p>\n<p>[00:59:08]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, what else?<\/p>\n<p>[00:59:08]\u00a0<strong>Dawn:<\/strong>\u00a0Not pay for my kids\u2019 phone.<\/p>\n<p>[00:59:11]\u00a0<strong>Ramit:<\/strong>\u00a0Agreed. Every bit helps. Just to show you, instead of 150, if we take it down to 80, that drops you from 77% fixed cost to 75%. So it actually is meaningful. But what\u2019s more important about that? Can you imagine sending a text message to your kids and letting them know they\u2019re going to be responsible for covering their own phone?<\/p>\n<p>[00:59:33]\u00a0<strong>Dawn:<\/strong>\u00a0I try to help them out because to be on mine it\u2019s cheaper than if they went on their own.<\/p>\n<p>[00:59:36]\u00a0<strong>Ramit:<\/strong>\u00a0Look, it\u2019s your money. You can do what you choose. It\u2019s your family. But the way you are currently managing your money, you will run out of money. This is the easiest decision you will make out of the things that we\u2019re going to talk about.<\/p>\n<p>[00:59:52]\u00a0<strong>Dawn:<\/strong>\u00a0Right.<\/p>\n<p>[00:59:53]\u00a0<strong>Ramit:<\/strong>\u00a0So would you be willing to do it?<\/p>\n<p>[00:59:54]\u00a0<strong>Dawn:<\/strong>\u00a0Yes, I would be willing to do it.<\/p>\n<p>[00:59:56]\u00a0<strong>Ramit:<\/strong>\u00a0Are you ready to turn the page on that chapter of them being little kids and you helping them with everything?<\/p>\n<p>[01:00:01]\u00a0<strong>Dawn:<\/strong>\u00a0Yes, I think it would be good for them.<\/p>\n<p>[01:00:03]\u00a0<strong>Ramit:<\/strong>\u00a0Can we do it right now? Can you send the text?<\/p>\n<p>[01:00:06]\u00a0<strong>Dawn:<\/strong>\u00a0Oh boy. I will.<\/p>\n<p>[01:00:13]\u00a0<strong>Ramit:<\/strong>\u00a0Tell me what you\u2019re going to say in this text message.<\/p>\n<p>[01:00:16]\u00a0<strong>Dawn:<\/strong>\u00a0Looking at my finances, it would be financially in my favor if everyone had their own phone plan.<\/p>\n<p>[01:00:26]\u00a0<strong>Ramit:<\/strong>\u00a0Was that difficult?<\/p>\n<p>[01:00:30]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s very difficult. Now I\u2019m going to cry.<\/p>\n<p>[01:00:34]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s okay to cry.<\/p>\n<p>[01:00:38]\u00a0<strong>Dawn:<\/strong>\u00a0I just want to help my kids. And I don\u2019t have a lot of money to help them, and that\u2019s really small amount. And I do ask them for the money and they pay, but I just at least feel like I\u2019m being a little\u2013<\/p>\n<p>[01:00:53]\u00a0<strong>Ramit:<\/strong>\u00a0I think everyone wants to take care of her kids. And that changes over time. It seems like you are providing a place for the whole family to come.<\/p>\n<p>[01:01:03]\u00a0<strong>Richard:<\/strong>\u00a0That\u2019s what the house is. That\u2019s what that plays. Everybody gathers, grandkids, everybody, pool, yard, anything like that. That\u2019s the hub.<\/p>\n<p>[01:01:12]\u00a0<strong>Ramit:<\/strong><strong>\u00a0<\/strong>So you are living that dream?<\/p>\n<p>[01:01:16]\u00a0<strong>Dawn:<\/strong>\u00a0My house right now I would say is my dream.<\/p>\n<p>[01:01:19]\u00a0<strong>Ramit:<\/strong>\u00a0In order to keep that dream, would you be willing to make other changes?<\/p>\n<p>[01:01:25]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[01:01:26]\u00a0<strong>Ramit:<\/strong>\u00a0Which ones?<\/p>\n<p>[01:01:29]\u00a0<strong>Dawn:<\/strong>\u00a0Sell the camper, things like that. I can sell the camper.<\/p>\n<p>[01:01:33]\u00a0<strong>Ramit:<\/strong>\u00a0How much would you get?<\/p>\n<p>[01:01:35]\u00a0<strong>Dawn:<\/strong>\u00a0Somewhere between 10 and 12,000.<\/p>\n<p>[01:01:37]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s say 10,000. 10,000, what do you do with the money?<\/p>\n<p>[01:01:40]\u00a0<strong>Dawn:<\/strong>\u00a0That\u2019s where I\u2019m not sure if I would put it into the house fund to make my mortgage go lower when I do buy it or put it into a 401k.<\/p>\n<p>[01:01:49]\u00a0<strong>Ramit:<\/strong>\u00a0Is anyone looking at the credit card debt here?<\/p>\n<p>[01:01:51]\u00a0<strong>Dawn:<\/strong>\u00a0Oh, definitely get rid of the credit cards and pay back my 401k, I\u2019m assuming.<\/p>\n<p>[01:01:56]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that would be good.<\/p>\n<p>[01:01:58]\u00a0<strong>Dawn:<\/strong>\u00a0And then the rest put into my savings.<\/p>\n<p>[01:02:01]\u00a0<strong>Ramit:<\/strong>\u00a0I think that you should probably be investing more, a lot more. And I think that you probably don\u2019t understand how investments work. And I\u2019m going to be willing to bet both of you haven\u2019t read my book or anyone\u2019s book on personal finance, stuff like that, right?<\/p>\n<p>[01:02:18]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019ve read the book.<\/p>\n<p>[01:02:19]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah?<\/p>\n<p>[01:02:19]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:02:20]\u00a0<strong>Ramit:<\/strong>\u00a0Oh. What\u2019d it tell you?<\/p>\n<p>[01:02:22]\u00a0<strong>Dawn:<\/strong>\u00a0Well, it told me a lot of things, but I have to put it into play.<\/p>\n<p>[01:02:26]\u00a0<strong>Ramit:<\/strong>\u00a0This isn\u2019t a hypothetical life. This is your life. Either I want that and I\u2019m going to do it, or I\u2019m not. You can also say I\u2019m not. I like the way it is. I don\u2019t want to make any changes. I want to pay the cell phone and keep the camper. I\u2019ll respect that.<\/p>\n<p>[01:02:42]\u00a0<strong>Dawn:<\/strong>\u00a0No, I want to do it, and I will do it. I want savings. I want to get married.<\/p>\n<p>[01:02:46]\u00a0<strong>Ramit:<\/strong>\u00a0You guys talk a lot about what you want, but you don\u2019t talk about what you\u2019re willing to do.<\/p>\n<p>[01:02:50]\u00a0<strong>Dawn:<\/strong>\u00a0True.<\/p>\n<p>[01:02:50]\u00a0<strong>Ramit:<\/strong>\u00a0And I have a lot of compassion for both of the things that you\u2019ve gone through in your journeys. I feel for that because not everyone grows up learning about this stuff when you\u2019re a kid. But at a certain point, you have made decisions that have kept you here. And even when we have this time together, which I want to help you, you\u2019re reliving the past, and you are telling me what you want. But kids want unicorns. That doesn\u2019t mean they\u2019re going to get them. And kids want everything. That\u2019s not a plan. So I\u2019m begging you to tell me what changes specifically are you willing to make? Let\u2019s start with Richard.<\/p>\n<p>[01:03:32]\u00a0<strong>Richard:<\/strong>\u00a0Sell the camper. 10.5, 11 at most, pay your 401k. But you look at the money you\u2019re already putting into the camper as far as towing it, the expenses. The money that you would spend doing that, put it where you want.<\/p>\n<p>[01:03:48]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, wow. Normally during summer, let\u2019s just say you would spend, I\u2019m going to make it up, 300 bucks a month on XYZ assorted expenses. So three months, that\u2019s 900 bucks you would have normally spent. You take that 300 bucks a month, and you\u2013 what?<\/p>\n<p>[01:04:03]\u00a0<strong>Richard:<\/strong>\u00a0Put it in your 401k, put it towards your wedding. Put it in an emergency fund.<\/p>\n<p>[01:04:08]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s either one of two things, save it or invest it. In your case, because you are starting later than most, but you still have time, 48 years old and 43. So you have time. You have. 15 to 20 years to let money compound and grow. That\u2019s a long time before potentially you retire. For me, I\u2019m investing aggressively. I\u2019m finding an extra 5,000, 6,000, or more per year to be investing. And that\u2019s right there. I love what you said. 900. Pull it. Put it in there. Okay. What\u2019s next? Let\u2019s go back and forth.<\/p>\n<p>[01:04:45]\u00a0<strong>Dawn:<\/strong>\u00a0I need to stop buying stuff for my family.<\/p>\n<p>[01:04:49]\u00a0<strong>Ramit:<\/strong>\u00a0How?<\/p>\n<p>[01:04:50]\u00a0<strong>Dawn:<\/strong>\u00a0Well, the phones, like you said.<\/p>\n<p>[01:04:51]\u00a0<strong>Ramit:<\/strong>\u00a0Is that a done deal or no? If you are serious about making these changes, you\u2019re probably going to make a series of changes to recalibrate the financial relationship between you and your loved ones.<\/p>\n<p>[01:05:06]\u00a0<strong>Dawn:<\/strong>\u00a0Correct.<\/p>\n<p>[01:05:06]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s not just about the cell phone. Correct. So this is a great opportunity to let them know that you\u2019re going to recalibrate it. It\u2019s not just about the cell phone because if it\u2019s just about the cell phone, then it\u2019s going to be just about this and this, and they\u2019re just going to feel like she\u2019s constantly just stabbing me.<\/p>\n<p>[01:05:23]\u00a0So let\u2019s set the tone. Hey, I\u2019m in New York. I\u2019m meeting with this guy. I\u2019ve realized I need to make some big changes with my finances. The first thing that I\u2019m going to do is I\u2019d like for each of you to be responsible for your own phone plan, and I\u2019d like for you to switch over to your own plans by the end of the month.<\/p>\n<p>[01:05:51]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019m in New York. I\u2019m meeting with Ramit, and I need to make some big financial changes. I would like you both to switch to your own phone plans.<\/p>\n<p>[01:06:03]\u00a0<strong>Ramit:<\/strong>\u00a0Before you send it, at the very end, put this. \u201cThis is important to me. I love you.\u201d<\/p>\n<p>[01:06:09]\u00a0<strong>Dawn:<\/strong>\u00a0Look, I\u2019m crying. Am I sending it?<\/p>\n<p>[01:06:13]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Good work.<\/p>\n<p>[01:06:15]\u00a0<strong>Dawn:<\/strong>\u00a0You think I\u2019m taking away their dog or something?<\/p>\n<p>[01:06:20]\u00a0<strong>Ramit:<\/strong>\u00a0It goes a lot deeper than just a cell phone bill, doesn\u2019t it? What is it to you?<\/p>\n<p>[01:06:25]\u00a0<strong>Dawn:<\/strong>\u00a0Just being there for them. It was just me and them for a long time, 11 years. I went through a lot with the divorce emotionally. If it wasn\u2019t for them, I don\u2019t know how I would have gotten through it.<\/p>\n<p>[01:06:40]\u00a0<strong>Ramit:<\/strong>\u00a0You know you\u2019re still there for them. You\u2019re there physically. You\u2019re there emotionally.<\/p>\n<p>[01:06:46]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah, I have a great relationship with them.<\/p>\n<p>[01:06:48]\u00a0<strong>Ramit:<\/strong>\u00a0Mom is mom. You\u2019re going to be there. But you\u2019re going to change the dynamics. It\u2019s the same way every parent has done when they were little kids. You used to feed them. You don\u2019t feed them anymore. Same way that you used to pay for them to go back to school shopping. You don\u2019t do that anymore. And this is just another evolution of that.<\/p>\n<p>[01:07:12]\u00a0So what feels big to you, I get it. It feels big because it\u2019s just closing the door on one more chapter of parenting. But you are actually giving them the keys to start their own chapter. They\u2019re going to figure things out now with their spouses and fianc\u00e9s. They\u2019ve got to figure it out, just as you\u2019re doing it right now. Not everybody has a chance to come to New York and talk to me and others. You had that chance. Now you\u2019re passing that gift along to them. Yes, it\u2019s going to be tough for them. It is. There\u2019s no doubt. Especially with the incomes they make, the number of kids, it\u2019s going to be tough.<\/p>\n<p>[01:07:47]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:07:48]\u00a0<strong>Ramit:<\/strong>\u00a0Well, let\u2019s remember. They have a house that they can go to where grandma\u2019s there. They\u2019re loved. And a cell phone bill, they will figure out a way to make it work. Okay?<\/p>\n<p>[01:08:03]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:08:03]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Richard, what do you say?\u00a0I noticed you were holding her hand during that process.<\/p>\n<p>[01:08:05]\u00a0<strong>Richard:<\/strong>\u00a0It\u2019s a really big deal. I know what family is to her. That\u2019s everything.<\/p>\n<p>[01:08:13]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. I love watching the two of you. I love that you reached over and comforted her. And Dawn, I love that I think when we were talking about the numbers you were quite stoic. I was becoming alarmed. But this really tells me so much about you. It is family. And just the fact that it is so challenging for you to send this text message.<\/p>\n<p>[01:08:31]\u00a0<strong>Dawn:<\/strong>\u00a0Yeah I\u2019ve never realized that that would be so hard.<\/p>\n<p>[01:08:35]\u00a0<strong>Richard:<\/strong>\u00a0Yeah. It\u2019s like standing up. It\u2019s like me first.<\/p>\n<p>[01:08:39]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that\u2019s right.<\/p>\n<p>[01:08:41]\u00a0<strong>Dawn:<\/strong>\u00a0I don\u2019t do that.<\/p>\n<p>[Narration]<\/p>\n<p>[01:08:41]\u00a0<strong>Ramit:<\/strong>\u00a0That conversation was really hard for me, but it was 10 times harder for Dawn. Truthfully, looking back on the recording, I don\u2019t know if it was the right call. Think about it. Her daughters are engaged. They seem to be responsible. They have big families. They don\u2019t make a lot of money. Why are they being penalized?<\/p>\n<p>[01:09:00]\u00a0Let me tell you why I decided for Dawn to start with her daughters. They\u2019re grown up, they have their own families, and Dawn is my guest\u2013 Dawn. She\u2019s my focus today, along with Richard. Without making a change, it is a certainty that Dawn will run out of money. She doesn\u2019t have enough saved. She doesn\u2019t own a house. She is at extreme risk of living in poverty when she gets older.<\/p>\n<p>[01:09:25]\u00a0And I know that her saving $50 a month on cell phone bills will not materially change her financial situation, but I need her to take an action, a hard one, to show herself that she can put herself first. Also, I intentionally did not tackle her relationship with her son. The fact that she spoils him, that a 12-year-old essentially orders her around, that she has allowed him to control the financial dynamic at home, that goes much deeper than the scope of this show, and that needs the help of a therapist. Back to Dawn standing up for herself.<\/p>\n<p>[Interview]<\/p>\n<p>[01:10:00]\u00a0<strong>Ramit:<\/strong>\u00a0What could be a new definition for you of who Dawn is going to be?<\/p>\n<p>[01:10:06]\u00a0<strong>Dawn:<\/strong>\u00a0Somebody that takes control of my own life but is still there for my children and still a good mom.<\/p>\n<p>[01:10:14]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s not a but. You\u2019re taking control of your life, and you\u2019re going to continue to be there but in a different way. You\u2019ll be there to hug them. You\u2019ll be there to talk to them. You\u2019re not going to be there to pay their bills, and you\u2019re not probably going to be there with your son when it comes to what?<\/p>\n<p>[01:10:34]\u00a0<strong>Dawn:<\/strong>\u00a0Things that he wants every day.<\/p>\n<p>[01:10:35]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. That\u2019s going to be really challenging, right?<\/p>\n<p>[01:10:38]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s going to be challenging, but I think it\u2019s going to be easier than sending that text. The bond with my girls, and they are in college and trying so hard, and I do feel like I financially failed them. I wasn\u2019t able to pay for their colleges. I look at like my brother\u2019s situation, and he\u2019s done so well. His house is paid off. He paid for his kids to go to college. He\u2019s got a ton of money, savings, all in one income. I just wasn\u2019t able to give them any of that, and I could have if I did things differently.<\/p>\n<p>[01:11:13]\u00a0<strong>Ramit:<\/strong>\u00a0Don\u2019t you think that\u2019s what we\u2019re doing right now? You can give them cellphone payment, and you can do that for the rest of your life and put yourself into complete debt. Or you can actually give them something even more valuable than 50 bucks a month. You can give them what I think is the opposite of a doormat, is being a role model with money.<\/p>\n<p>[01:11:32]\u00a0Can you imagine they look and say, \u201cWow, mom took total control of her money. Mom went through so much, and look at now. Her retirement account is growing. She feels confident. And believe it or not, I guarantee your family will respect you when you start to have very clear boundaries of what you will and will not do.<\/p>\n<p>[01:11:53]\u00a0With your son, I think that that\u2019s probably outside of the scope of what we could talk about today, but I\u2019ve noticed that there is no therapy on this as well. Is that something that the two of you have done before?<\/p>\n<p>[01:12:02]\u00a0<strong>Dawn:<\/strong>\u00a0Oh yes.<\/p>\n<p>[01:12:03]\u00a0<strong>Richard:<\/strong>\u00a0We\u2019re very big into mental health.<\/p>\n<p>[01:12:04]\u00a0<strong>Ramit:<\/strong>\u00a0Love it. I\u2019m so happy. If you haven\u2019t already, although I assume you have, talking about the financial relationship with your son, is that something you could bring up comfortably in therapy?<\/p>\n<p>[01:12:15]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[01:12:15]\u00a0<strong>Ramit:<\/strong>\u00a0Highly encourage you to do that because you\u2019ll get some great tools to have conversations with him. And I think that will be fantastic.<\/p>\n<p>[01:12:22]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[01:12:22]\u00a0<strong>Ramit:<\/strong>\u00a0What about you, Richard? If you want to live together, then that makes it difficult for you to start a business or have the financial security in order to\u2013 you\u2019re investing zero. You\u2019re saving zero. So what\u2019s the plan?<\/p>\n<p>[01:12:39]\u00a0<strong>Richard:<\/strong>\u00a0God, I can almost say not even pursue the business.<\/p>\n<p>[01:12:43]\u00a0<strong>Ramit:<\/strong>\u00a0Really?<\/p>\n<p>[01:12:45]\u00a0<strong>Richard:<\/strong>\u00a0It\u2019s time. That\u2019s the balance issue with me. Where do you fit it all in as far as like house care, renovations, and grinding a business?<\/p>\n<p>[01:12:54]\u00a0<strong>Ramit:<\/strong>\u00a0Well, maybe, what\u2019s the point of the renovations? What if you stopped doing that, what would you do instead?<\/p>\n<p>[01:12:59]\u00a0<strong>Richard:<\/strong>\u00a0Probably that.<\/p>\n<p>[01:13:00]\u00a0<strong>Ramit:<\/strong>\u00a0What?<\/p>\n<p>[01:13:01]\u00a0<strong>Richard:<\/strong>\u00a0The business. Taking pictures, creating content, doing things for myself.<\/p>\n<p>[01:13:06]\u00a0<strong>Ramit:<\/strong>\u00a0All right. And if you do that, how long will you give it? And how much do you need to make to know if it\u2019s the right financial decision or not?<\/p>\n<p>[01:13:16]\u00a0<strong>Richard:<\/strong>\u00a0That I don\u2019t know. Enough to pay bills, obviously. I\u2019d have to pay my bills first and foremost.<\/p>\n<p>[01:13:23]\u00a0<strong>Ramit:<\/strong>\u00a0If I were going to start a business, let\u2019s forget video, audio, it doesn\u2019t matter. It\u2019s just a business at a certain level. You currently make $3,500 a month.<\/p>\n<p>[01:13:31]\u00a0<strong>Richard:<\/strong>\u00a0Yes.<\/p>\n<p>[01:13:33]\u00a0<strong>Ramit:<\/strong>\u00a0So that\u2019s roughly 40K a year. The thing is we can start to make some choices about finances by just looking at the high level. We go, making roughly 40k a year, you can make 20 bucks an hour. And I don\u2019t know what places around you pay for minimum wage and things like that. Probably what?<\/p>\n<p>[01:13:52]\u00a0<strong>Dawn:<\/strong>\u00a018.<\/p>\n<p>[01:13:53]\u00a0<strong>Ramit:<\/strong>\u00a0So that\u2019s close to it. That\u2019s right there. You can make minimum wage and make similar to what you\u2019re making. No grinding, no nothing. Just go to work. And after work is done, you\u2019re over, but you\u2019re working full-time.<\/p>\n<p>[01:14:06]\u00a0The real reason that I think there\u2019s so much confusion in your mind about what to choose is that there\u2019s no clear end goal. The two of you haven\u2019t talked about what is the actual lifestyle we want. Do we actually want to buy this house? If so, how much is it actually going to cost us, and when are we going to do it?<\/p>\n<p>[01:14:23]\u00a0That means you need to make this much, and I need to make this much. That means we need to be contributing this much every month. Right now it\u2019s a lot of, I\u2019d like to do this and travel. You guys are in your 40s. So either you decide now or you just coast into the rest of your life and close off lots of doors.<\/p>\n<p>[01:14:44]\u00a0<strong>Dawn:<\/strong>\u00a0Right. Which I don\u2019t want.<\/p>\n<p>[01:14:46]\u00a0<strong>Ramit:<\/strong>\u00a0Richard, for you, if I were in your situation, I would say, I have six months to be making more than I currently make at my job. Right now I make 3,500 bucks a month. I need to be making 3,500 bucks a month within six months. Otherwise, close the business down. It\u2019s not working. And if you can make 3,500, you could probably make 5,000 and on and on and on.<\/p>\n<p>[01:15:09]\u00a0I set a time limit and an income goal because that forces me to be really specific about what I\u2019m doing in my business. Otherwise, I\u2019m just doing random stuff and hoping one day it will take off. I don\u2019t have time for that. I\u2019m getting aggressive with my business. I\u2019m getting aggressive with my finances. What do y\u2019all notice about the way I\u2019m talking?<\/p>\n<p>[01:15:29]\u00a0<strong>Richard:<\/strong>\u00a0Confident.<\/p>\n<p>[01:15:30]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[01:15:31]\u00a0<strong>Richard:<\/strong>\u00a0Aggressive.<\/p>\n<p>[01:15:32]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m going to do this. And, hey, it won\u2019t always work, but if it doesn\u2019t work, here\u2019s my plan. Close it down or change approach, etc. Timeline, specific, numbers. If you look back over the last 10 years, financially speaking, what\u2019s changed? It sounds like you\u2019ve gone through all. You\u2019ve gone through a lot of relationship changes and things like that. Yes.<\/p>\n<p>[01:15:55]\u00a0But the next 10 years, I want you to be able to live this amazing life. Now, amazing might be different than what you envisioned when you were 20, but it might be, look, being able to be in your dream house and have your family over X, Y, Z times per year. Maybe it\u2019s not fighting about money. Maybe it\u2019s taking a camping trip. Fine.<\/p>\n<p>[01:16:15]\u00a0But you got to be intentional about it. If it were me with the numbers, I would not combine my finances until I got married. I would not get married financially speaking until I had a shared vision about what we\u2019re going to do. And the fact that you can\u2019t afford a wedding right now, this is where I think you need to start talking about compromises.<\/p>\n<p>[01:16:41]\u00a0I would never let the cost of a wedding get in the way of getting married. A wedding is a wedding. If I didn\u2019t have money, when I got married, I still would have gotten married. I should have done it in the courthouse. If having a wedding in your fashion is important to you, fine. What choices are you willing to make to do it?<\/p>\n<p>[01:16:58]\u00a0So I would make the changes to cut this number down to roughly 60%. That would be difficult. That would involve raising incomes. In your case, Dawn, you mentioned that if you didn\u2019t have Richard, you would get a second job. I would hate to see a 48-year-old mom have to get a second job simply because of her inability to say no. It\u2019s like, let me just take on more and more and more so that I can just give, give, give to others. And then what happens to you?<\/p>\n<p>[01:17:30]\u00a0<strong>Dawn:<\/strong>\u00a0I get lost in it.<\/p>\n<p>[01:17:33]\u00a0<strong>Ramit:<\/strong>\u00a0You are lost in it. But nobody can get you out except you. Not even me. I would increase my savings and my investments. I would take this house payment and I would say, \u201cLook, I don\u2019t know if we\u2019re going to get a house or not, but right now what\u2019s more important is we have an emergency fund. That emergency fund is going to be roughly 30k because that is six months of expenses. Again, I\u2019m speaking jointly. I know you\u2019d have to divide it for the two of you.<\/p>\n<p>[01:18:01]\u00a0<strong>Dawn:<\/strong>\u00a0Right.<\/p>\n<p>[01:18:02]\u00a0<strong>Ramit:<\/strong>\u00a0Richard, since you don\u2019t have any savings, that would be first priority for you is to build up those savings. And that is why you cannot afford to be paying $1,000 a month. There are a lot of things here that need to change if you two want to be financially secure, a lot. And it\u2019s difficult. We saw the text message, difficult. It\u2019s difficult. Going to be for your son. It\u2019s going to be really difficult for you. This is where the two of you can actually show that you are partners.<\/p>\n<p>[01:18:31]\u00a0And it\u2019s like, hey, I know this is so tough for you to say this. Let me help role play with you what you\u2019re going to say to your kids before they come over. Hey, I know it\u2019s tough for you to quit smoking. How can I help? How can I support? This is where partners can step up. And you can do it together. But what\u2019s important is you\u2019ve got to have a vision together. If we\u2019re going to get married, this is what it\u2019s going to take. If I were in your position, I would be putting a lot more money towards investments than savings.<\/p>\n<p>[01:19:01]\u00a0<strong>Dawn:<\/strong>\u00a0Okay.<\/p>\n<p>[01:19:01]\u00a0<strong>Ramit:<\/strong>\u00a0Why? Because savings make you very little. You need time for these investments to compound. Typically, historically, these numbers have returned roughly 7% per year after inflation and all that stuff. That doesn\u2019t sound like a lot, but it adds up to a lot. And in your case, you\u2019re 48. Presuming you retire at 65, 68, that number could turn out to be quite a bit. Would you like to see?<\/p>\n<p>[01:19:29]\u00a0<strong>Dawn:<\/strong>\u00a0Sure. Love to see that.<\/p>\n<p>[01:19:30]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m going to show you the math really quickly here. You have 25,000. You are putting in, let\u2019s say, 6,000.<\/p>\n<p>[01:19:36]\u00a0<strong>Dawn:<\/strong>\u00a0Okay.<\/p>\n<p>[01:19:37]\u00a0<strong>Ramit:<\/strong>\u00a0You want to retire at 65?<\/p>\n<p>[01:19:38]\u00a0<strong>Dawn:<\/strong>\u00a0That would be my goal, but I don\u2019t know if that\u2019s doable.<\/p>\n<p>[01:19:43]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So you\u2019ll currently have $276,000. That means you will have. $11,000 a year in income, plus your extra 12,000, we\u2019re talking about $22,000 a year in income.<\/p>\n<p>[01:19:58]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019d be hard to live on that.<\/p>\n<p>[01:19:59]\u00a0<strong>Ramit:<\/strong>\u00a0You can\u2019t live on that. You can\u2019t. What\u2019s going through your mind right now?<\/p>\n<p>[01:20:03]\u00a0<strong>Dawn:<\/strong>\u00a0I\u2019m in a really bad place.<\/p>\n<p>[01:20:05]\u00a0<strong>Ramit:<\/strong>\u00a0Do you see why I\u2019ve been in such a hurry? You can\u2019t live on this. It\u2019s not a good life. Can we make some changes?<\/p>\n<p>[01:20:12]\u00a0<strong>Dawn:<\/strong>\u00a0Yes.<\/p>\n<p>[01:20:14]\u00a0<strong>Ramit:<\/strong>\u00a0Instead of 6,000 a year, you put 12,000 a year. That\u2019s $1,000 a month. Okay. That\u2019s pre-tax. It\u2019s extra money. You have all of it to your 401k. Let\u2019s just say, to keep it simple, 17 years You\u2019re now at 474,000. It\u2019s growing. Still not enough. What else could we do? Let\u2019s assume for the moment that you are not going to buy a house.<\/p>\n<p>[01:20:35]\u00a0<strong>Dawn:<\/strong>\u00a0Okay.<\/p>\n<p>[01:20:35]\u00a0<strong>Ramit:<\/strong>\u00a0So we take 30k out of here and put it into the investments. Watch what happens. You\u2019re now at 569. All right. What else?<\/p>\n<p>[01:20:49]\u00a0<strong>Dawn:<\/strong>\u00a0Put more money in?<\/p>\n<p>[01:20:50]\u00a0<strong>Ramit:<\/strong>\u00a0Yes. 18,000 a year. We\u2019re now at 767,000, which means you could have 30,000 of income plus your pension plus social security.<\/p>\n<p>[01:21:02]\u00a0<strong>Dawn:<\/strong>\u00a0It\u2019s doable. I can live.<\/p>\n<p>[01:21:04]\u00a0<strong>Ramit:<\/strong>\u00a0You can live. You know what else you can do? You can stay working for a couple of more years. Why don\u2019t we do that? Watch what happens. Instead of 767,000, a million bucks. You see what just happened? It grew a lot in three years. You\u2019re up to 40,000 a year in income plus all that other stuff. Now why? Because we\u2019re in a hurry. Compounding needs time. It\u2019s like cooking a turkey. You can\u2019t just do it in five minutes.<\/p>\n<p>[01:21:27]\u00a0That\u2019s why I\u2019m getting so passionate about like, oh, are we talking about sending a text message? Send the text. We got bigger things to worry about. We need to be putting well over $1,000 a month into investments. We need to be decisive, and making big moves with our money needs to become a regular thing.<\/p>\n<p>[01:21:46]\u00a0And these conversations that feel so existential right now, they\u2019re actually the tiniest conversations in the grand scheme of what\u2019s important. Wat\u2019 are you all taking away from this? Dawn?<\/p>\n<p>[01:21:57]\u00a0<strong>Dawn:<\/strong>\u00a0I just need to be more aggressive with what I do with my money and take control of it. I have to not make impulse decisions when it comes to my family and buying, even buying for myself in the house. I love to buy things for the house. But I just have to look at my future more.<\/p>\n<p>[01:22:14]\u00a0<strong>Ramit:<\/strong>\u00a0Richard?<\/p>\n<p>[01:22:16]\u00a0<strong>Richard:<\/strong>\u00a0Know about your money, be more aware where you want it to go. Be more aggressive.<\/p>\n<p>[01:22:21]\u00a0<strong>Ramit:<\/strong>\u00a0I like that you said, be aware of where you want to go because it\u2019s not enough to just be aware of what\u2019s going on today. We have to be aware of where we want to go. And in your case, because you have 20-plus years to do it, you have a chance to actually build a pretty healthy financial life.<\/p>\n<p>[01:22:43]\u00a0<strong>Dawn:<\/strong>\u00a0Right.<\/p>\n<p>[01:22:44]\u00a0<strong>Ramit:<\/strong>\u00a0In this calculation, I didn\u2019t even combine the two of you. If you were to combine, makes things even better.<\/p>\n<p>[01:22:51]\u00a0<strong>Dawn:<\/strong>\u00a0Oh, absolutely.<\/p>\n<p>[01:22:52]\u00a0<strong>Ramit:<\/strong>\u00a0But you can\u2019t combine it until you each get control of your money right now.<\/p>\n<p>[Narration]<\/p>\n<p>[01:22:57]\u00a0<strong>Ramit:<\/strong>\u00a0The real issue with Dawn and Richard is that they don\u2019t believe they have agency or control over their lives. This is very common with people who grow up low income, who often see the world as happening to them, not as something they can influence. And this explains so much of some people\u2019s passive behavior with money.<\/p>\n<p>[01:23:19]\u00a0You\u2019ll hear them talking about their decisions, and you\u2019ll say, \u201cWhy don\u2019t you just do X or Y?\u201d And they\u2019ll have an answer for everything. You\u2019re basically playing financial whack-a-mole. And after a while, you realize there\u2019s a deep lack of agency. And it goes something like this. Nothing I ever did made any difference, so why bother?<\/p>\n<p>[01:23:42]\u00a0It\u2019s haunting, really, when you think about it. And these messages are passed down generationally. So even when you get someone trying to make a change, they often lack the basic fundamentals. Sometimes they try to make a change, but they end up fixating on how much money they\u2019re spending on groceries that week.<\/p>\n<p>[01:24:01]\u00a0This is where we really have to have compassion for the different ways that we grew up. I grew up knowing that I could make an impact on the world. It was an expectation. My parents told us, of course, you\u2019re going to college. Of course, you\u2019re going to get a good job. Of course, you\u2019re going to get A\u2019s.<\/p>\n<p>[01:24:17]\u00a0That\u2019s an expectation. I knew that I could work and that I could get results. But that was taught to me from my parents, whose parents taught them, and on and on and on. And we have to remember that not everybody grew up the same way. In this conversation, I also wish I\u2019d gotten to the retirement numbers earlier.<\/p>\n<p>[01:24:37]\u00a0It was only at the last minute that I showed Dawn these numbers, and did you see her reaction? She looked alarmed. All that talk about their situation, but it was only when she realized she\u2019d have to live on a fraction of what she makes now that she sat up and realized she was in trouble.<\/p>\n<p>[01:24:54]\u00a0I want to thank Dawn and Richard for asking for help. I truly hope they\u2019re able to make the changes they need to. Time is not on their side, and if they want to live comfortably as they get older, they will need to make aggressive, sweeping changes very quickly. Let\u2019s hear what they have to say, starting with Dawn\u2019s follow-up.<\/p>\n<p>[01:25:14]\u00a0<strong>Dawn:<\/strong>\u00a0I guess Rich and I came into it thinking that it would be more of a plan of what we\u2019re due to move forward, more of an idea or blueprint of what we are to put our finances together so it doesn\u2019t feel like I\u2019m paying all the house bills and he\u2019s just giving me money. We did come up with a solution. He is going to actually pay certain bills because the money he gives me doesn\u2019t go solely to rent.<\/p>\n<p>[01:25:39]\u00a0It does have to go to food and electricity, things like that. So he is going to actually take on some of those bills and be responsible for those. So that takes a little weight off me. I don\u2019t have to ask him for the money. So that did make us open up a conversation about that, and we were happy with the outcome of that.<\/p>\n<p>[01:25:57]\u00a0When it comes to my retirement, I did look into that, and I actually have a New York state pension, which is so much better than I thought. I am going to be putting into a 401k. But I get a pretty high percent of my top three years that I work for New York State. So looking at that now, I know how to actually navigate that. Richard started putting money into his 401k, and so we are well on our way. So thank you. Bye.<\/p>\n<p>[01:26:26]\u00a0<strong>Ramit:<\/strong>\u00a0Unfortunately, we never got a follow-up from Richard, even after my team reached out several times. And I have to tell you, I am very, very disappointed to hear that. Dawn and Richard, I\u2019m wishing you the best. I would love to stay in touch, and I would love for you to keep me updated. Thank you, again, for coming on the show.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Dawn is 48, Richard is 43, and they\u2019re living paycheck to paycheck. Although they\u2019re engaged, they\u2019re struggling to combine their finances because of their varied pasts. Dawn is overspending on kids and grandkids, and Richard has deep scars from a financially devastating breakup. Can they move beyond their past money stories and get aggressive [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"","_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[290],"class_list":["post-118854","post","type-post","status-publish","format-standard","hentry","category-podcast-episodes"],"acf":[],"aioseo_notices":[],"modified_by":"Nasrin","_links":{"self":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/comments?post=118854"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118854\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}