{"id":118858,"date":"2024-11-12T12:21:24","date_gmt":"2024-11-12T16:21:24","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118858"},"modified":"2026-02-18T15:48:15","modified_gmt":"2026-02-18T19:48:15","slug":"182-don-tana","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/182-don-tana\/","title":{"rendered":"Episode 182. \u201cWe\u2019re $350k in debt &#038; have no savings. Will I have to work until we die?\u201d"},"content":{"rendered":"<p><iframe title=\"\u201c$350k in debt &amp; no savings. Do I have to work until we die?\u201d\" src=\"https:\/\/www.youtube.com\/embed\/GH9LyPatIdY\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/episode\/3OHKFLMdxLdhhNMv4x31Tl?utm_source=generator\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Don is 50, Tana is 48, and they\u2019ve struggled to make ends meet their entire adult lives. They have a lot of debt, they\u2019ve never really saved or thought they\u2019d be able to retire\u2026 but their income has recently DOUBLED and they\u2019re wondering how to manage the extra money. Throughout this conversation, as Don and Tana work to set aside their scarcity mindset, you\u2019ll hear how hard it can be to change.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>NordVPN | Secure your online privacy this Black Friday with NordVPN\u2019s special offer. Get a huge discount on a 2-year plan, plus 4 bonus months free, when you sign up at\u00a0<strong><a href=\"https:\/\/nordvpn.com\/ramit\">https:\/\/nordvpn.com\/ramit<\/a><\/strong>.<\/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\u00a0<a href=\"https:\/\/rocketmoney.com\/ramit\">https:\/\/rocketmoney.com\/ramit<\/a>.<\/p>\n<p>ZocDoc | Download the ZocDoc app for FREE\u00a0 at\u00a0<a href=\"https:\/\/zocdoc.com\/ramit\">https:\/\/zocdoc.com\/ramit<\/a>\u00a0then find and book a top-rated doctor today.<\/p>\n<p>Mint Mobile | To get your new wireless plan for just $15 a month, go to\u00a0<strong><a href=\"https:\/\/mintmobile.com\/ramit\">https:\/\/mintmobile.com\/ramit<\/a><\/strong>.<\/p>\n<p>Trust &amp; Will | Secure your assets and protect your loved ones. Get 10% off plus free shipping on your estate plan documents by visiting\u00a0<strong><a href=\"https:\/\/trustandwill.com\/ramit\">https:\/\/trustandwill.com\/ramit<\/a><\/strong>.<\/p>\n<h2><strong>Links mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/iwt.com\/booktour\">Get tickets to Money for Couples LIVE coming to a city near you in January<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p>[00:00:00]\u00a0<strong>Don:<\/strong>\u00a030 years of barely nose above water, we can\u2019t imagine a\u00a0Rich\u00a0Life.<\/p>\n<p>[00:00:04]\u00a0<strong>Tana:<\/strong><strong>\u00a0<\/strong>We\u2019ve always been either living paycheck to paycheck or actually on assistance.<\/p>\n<p>[00:00:09]\u00a0<strong>Ramit:<\/strong>\u00a0Don\u00a0is 50, Tana\u2019s 48, and they have struggled to make ends meet for their entire adult lives.<\/p>\n<p>[00:00:15]\u00a0<strong>Don:<\/strong>\u00a0We\u2019ve always had hustle, side hustle, and second side hustle.<\/p>\n<p>[00:00:19]\u00a0<strong>Tana:<\/strong>\u00a0I have always stressed about money. We\u2019re always waiting for the other shoe to drop.<\/p>\n<p>[00:00:24]\u00a0<strong>Ramit:<\/strong>\u00a0They have a lot of debt. They never really saved. They never actually thought they\u2019d be able to retire.<\/p>\n<p>[00:00:28]\u00a0<strong>Don:<\/strong>\u00a0We just never thought we were actually\u00a0going to\u00a0be able to retire.<\/p>\n<p>[00:00:30]\u00a0<strong>Tana:<\/strong>\u00a0Don and I had both just given up, just assumed we were going to work until we were dead.<\/p>\n<p>[00:00:36]\u00a0<strong>Ramit:<\/strong>\u00a0Their income increased significantly, and for the first time ever, they are starting to wonder how to handle the extra money.<\/p>\n<p>[00:00:43]\u00a0<strong>Don:<\/strong>\u00a0I make more a month now than I made in entire years.<\/p>\n<p>[00:00:47]\u00a0<strong>Tana:<\/strong>\u00a0We\u2019re not used to this. This isn\u2019t our world. We don\u2019t know what to do.<\/p>\n<p>[00:00:50]\u00a0<strong>Ramit:<\/strong>\u00a0Can Don and Tana set aside their scarcity mindset and make an actual plan for the money?<\/p>\n<p>[00:00:55]\u00a0<strong>Don:<\/strong>\u00a0It was really hard for me to accept being paid what I\u2019m worth.<\/p>\n<p>[00:00:58]\u00a0<strong>Tana:<\/strong>\u00a0We need a plan.<\/p>\n<p>[00:00:59]\u00a0<strong>Ramit:<\/strong>\u00a0All right.\u00a0Let\u2019s see what we have here. Their assets are\u00a0$200,000; investments, $11,000. Okay. Quite low for that age.\u00a0Debt is 387,000.\u00a0That debt includes $51,000 of credit card debt, 145,000 for the mortgage, 168,000 for student loans\u2013\u00a0that\u2019s at age 50\u2013\u00a0and a 10,000-dollar\u00a0personal loan,\u00a0plus $12,000 for a lease. It\u2019s a lot of debt. Okay. Income is 21,500 per month. That\u2019s a lot. I think that\u2019s recent.\u00a0That\u2019s $258,000 a year. Housing costs are quite low.<\/p>\n<p>[00:01:47]\u00a0Debt payments are $5,895 a month. Wow. They have a lot of margin to play with with this income,\u00a0and they\u2019ve chosen to put it towards debt. Makes sense.\u00a0Investments at\u00a00,\u00a0and they have $0 in savings. Of course, their guilt-free spending is working,\u00a020%, $2,792.\u00a0This CSP tells me a lot. It tells me that one of them recently started making a lot of money.<\/p>\n<p>[00:02:14]\u00a0That part is good. The part that is problematic is how little they have for investments and how much debt they have.\u00a0The great news is that if they can keep their expenses low, they can certainly shovel money towards that debt as they\u2019re doing.\u00a0That\u2019s great.<\/p>\n<p>[00:02:36]\u00a0I think the more psychological problem here is this need to constantly work and being more worried now that they\u2019re making money than before when they weren\u2019t. That\u2019s quite interesting.\u00a0All right. Sometimes when you can actually see a light at the end of the tunnel, you actually feel worse than when you are completely in the dark.\u00a0We\u2019re\u00a0going to\u00a0talk about that today. I\u2019m very eager to talk to them.<\/p>\n<p>[Interview]<\/p>\n<p>[00:03:01]\u00a0<strong>Tana:<\/strong>\u00a0We\u2019ve always been either living paycheck to paycheck or actually on assistance, and all of a sudden we made a huge leap. We\u2019re not used to this. This isn\u2019t our world. We don\u2019t know what to do.<\/p>\n<p>[00:03:15]\u00a0<strong>Don:<\/strong>\u00a0We\u2019ve always had hustle, side hustle, and second side hustle. And just the other day I was out and I was like, \u201cOh, I could probably do Uber Eats and pick up a few extra bucks.\u201d And I\u2019m like, \u201cWait, why am I thinking that way?\u201d But that\u2019s just how we\u2019re so wired at this point.<\/p>\n<p>[00:03:31]\u00a0<strong>Ramit:<\/strong>\u00a0Can we go to the moment where your financial lives changed? I suspect this happened pretty recently. Don, can you walk me through it?<\/p>\n<p>[00:03:42]\u00a0<strong>Don:<\/strong>\u00a0We\u2019ve always done consulting on the side, just trying to pick up a few extra bucks. And during COVID someone approached me and said, \u201cHey, I\u2019m starting this new business, would you mind taking a look?\u201d So I signed a small contract to do a look, and at the end of it, they offered me the COO role.<\/p>\n<p>[00:03:59]\u00a0And so I did that for a little over a year. Company had great success, so much so the investors flipped it, and I lost my job. But a contact there remembered me. And so that opened a door for a consulting opportunity with one client, and then I\u2019ve added other clients since then.<\/p>\n<p>[00:04:21]\u00a0<strong>Ramit:<\/strong>\u00a0How much did you make as a COO?<\/p>\n<p>[00:04:22]\u00a0<strong>Don:<\/strong>\u00a0I never made above $35,000 a year until that job. When I left there, I was at 120K.<\/p>\n<p>[00:04:34]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. So you basically almost quadrupled your salary. How much did you both make as a household for most of your career?<\/p>\n<p>[00:04:43]\u00a0<strong>Tana:<\/strong>\u00a0We actually had some years where we were under 20,000, and then we got up to 70 for a few years. So we were in and out of assistance.<\/p>\n<p>[00:04:59]\u00a0<strong>Ramit:<\/strong>\u00a0And as of today, how much household income do you make?<\/p>\n<p>[00:05:04]\u00a0<strong>Tana:<\/strong>\u00a0245, 250. Yeah.<\/p>\n<p>[00:05:10]\u00a0<strong>Ramit:<\/strong>\u00a0So 5 to 10 times more than you used to make.<\/p>\n<p>[00:05:13]\u00a0<strong>Don:<\/strong>\u00a0I make more a month now than I made in entire years.<\/p>\n<p>[00:05:18]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. Well, first of all, amazing job. That\u2019s incredible. How do you feel about that, Don?<\/p>\n<p>[00:05:27]\u00a0<strong>Don:<\/strong>\u00a0It\u2019s a mixed bag, right? Because first of all, it was really hard for me to accept being paid what I\u2019m worth. Tana has been my biggest champion, like, get paid what you\u2019re worth. But there\u2019s a part of me that has some bitterness because I spent so much of my life doing activism and justice work. And so now when I stop doing that, all of a sudden I\u2019m benefiting. So it feels a little backwards to me. And there\u2019s quite a bit of psychology there that I need to work through.<\/p>\n<p>[00:06:00]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s not often I get to talk to a couple who has 5X to 10X their previous income, especially at the age of 48 and 50. It\u2019s quite extraordinary. What has changed?<\/p>\n<p>[00:06:15]\u00a0<strong>Don:<\/strong>\u00a0I have some survivor\u2019s guilt. Because I started a nonprofit that worked with homeless and food insecurity folks. And so we\u2019re now the people I would approach, hoping they might consider to care for folks in our community. I never imagined in my life that having money would actually be nearly as complicated mentally, psychologically, for me as it is.<\/p>\n<p>[00:06:40]\u00a0When you\u2019re in non-profits, when you\u2019re in justice work, there\u2019s a sense of like, it\u2019s a call, and therefore you shouldn\u2019t be in it for the money. Make all the sacrifices. So to then all of a sudden everything change, it\u2019s been really hard. It\u2019s also been really great.<\/p>\n<p>[00:07:01]\u00a0We actually went out to dinner tonight before the show, and the person said, \u201cAre you here for a special occasion?\u201d We\u2019re like, \u201cNo, just dinner.\u201d And I looked at Tana. I was like, what a fun thing to be able to say, \u201cNo, we\u2019re actually just here to eat.\u201d It\u2019s a Monday night, and we\u2019re eating.<\/p>\n<p>[00:07:16]\u00a0<strong>Ramit:<\/strong>\u00a0I love that you have the appreciation for that. To be able to go out to a restaurant, so many of us take it for granted. To be able to step back and say, \u201cOh, that\u2019s not normal.\u201d Tana, how has it felt for your household income to increase like this?<\/p>\n<p>[00:07:32]\u00a0<strong>Tana:<\/strong>\u00a0I have always stressed about money. It\u2019s a huge relief to no longer have to worry about paying our basic bills, to no longer have to worry about, do we have enough money in our checking account before the next paycheck comes so that we don\u2019t overdraw?<\/p>\n<p>[00:07:51]\u00a0I think that\u2019s the biggest change, is that sense of relief. There\u2019s been some anxiety along with it because I think Don and I had both just given up and just assumed we were going to work until we were dead.<\/p>\n<p>[00:08:12]\u00a0<strong>Ramit:<\/strong>\u00a0Did you make jokes to people like, \u201cWe\u2019re going to work till the day we die,\u201d kind of thing?<\/p>\n<p>[00:08:16]\u00a0<strong>Tana:<\/strong>\u00a0Oh, sure. Yeah.<\/p>\n<p>[00:08:17]\u00a0<strong>Don:<\/strong>\u00a0I\u2019m a 50-year-old guy. Of course, I made that joke, too often.<\/p>\n<p>[00:08:21]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s a very common joke among people who don\u2019t have money and\/or people who have a lot of student debt. They frequently make that, and it\u2019s not really a joke. It\u2019s a half joke. They do it with a bit of a laugh, but also they believe it, and they say it enough times, and it starts to become a self-fulfilling prophecy. And just to see if that\u2019s true, Tana, after your household income has increased by 5, 10X, has your money stress vanished?<\/p>\n<p>[00:08:54]\u00a0<strong>Tana:<\/strong>\u00a0I wouldn\u2019t say it\u2019s completely vanished. It\u2019s changed. It\u2019s gotten better.<\/p>\n<p>[00:08:59]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s good.<\/p>\n<p>[00:09:01]\u00a0<strong>Tana:<\/strong>\u00a0So the stress now is more so about not screwing it up. We\u2019ve had a lot of stuff happen to us throughout the years, and so we\u2019re always waiting for the other shoe to drop. And so it took several months for me to get past that, this like, \u201cOh, this is just a flash in the pan.\u201d And so I am feeling that a little bit less now, but now the stress is like, \u201cOh, man, we actually will be able to retire. So how do we not screw that up?\u201d<\/p>\n<p>[00:09:32]\u00a0<strong>Ramit:<\/strong>\u00a0Would you say you love money or hate money?<\/p>\n<p>[00:09:38]\u00a0<strong>Don:<\/strong>\u00a0It\u2019s straddling that fence because it\u2019s a mystery in some ways because I don\u2019t know what to do with it.<\/p>\n<p>[00:09:48]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm. Tana, what about you? Love money or hate money?<\/p>\n<p>[00:09:54]\u00a0<strong>Tana:<\/strong>\u00a0I definitely feel like I have a love-hate relationship with money just because it\u2019s been so difficult to come by for most of our lives. And then I love when I can make life easier because of money. That\u2019s a big thing that would always frustrate me in the past. It\u2019d be like, \u201cOh, we broke our whisk. We can\u2019t afford to buy a new one.\u201d<\/p>\n<p>[00:10:19]\u00a0<strong>Ramit:<\/strong>\u00a0Whisk, like for pancakes?<\/p>\n<p>[00:10:20]\u00a0<strong>Tana:<\/strong>\u00a0Yeah. So it\u2019s like, \u201cWell, I guess I\u2019m using a fork now.\u201d And now it\u2019s like, \u201cOh, I broke the whisk. Let\u2019s just go buy a new whisk.\u201d<\/p>\n<p>[00:10:27]\u00a0<strong>Don:<\/strong>\u00a0One of the first things we bought was we replaced our measuring cups.<\/p>\n<p>[00:10:31]\u00a0<strong>Tana:<\/strong>\u00a0That\u2019s exactly right. Because you couldn\u2019t read them. You couldn\u2019t read the numbers anymore in our old ones.<\/p>\n<p>[00:10:36]\u00a0<strong>Ramit:<\/strong>\u00a0Amazing. I appreciate that.<\/p>\n<p>[Narration]<\/p>\n<p>[00:10:38]\u00a0<strong>Ramit:<\/strong>\u00a0Here we have a couple who truly struggled for many, many years, and then suddenly their financial life changed. How do you grapple with those changes? Remember that money is not simply numbers in your bank account. Money is a core part of your identity.\u00a0It\u2019s where you live. It\u2019s what you eat. It\u2019s what you can do.<\/p>\n<p>[00:11:00]\u00a0Try to imagine how you would handle going from being on public assistance to suddenly,\u00a0in your\u00a050s,\u00a0earning hundreds of thousands of dollars a year. Would you know how to handle the money? Imagine the money is like driving a fast car. Sure,\u00a0if you\u2019ve gotten your driver\u2019s license and you\u2019ve practiced on slower cars, you might feel confident driving this fast car. But what if you\u2019ve never driven this fast ever and suddenly your only car is a supercar.<\/p>\n<p>[00:11:29]\u00a0Would you know what to do,\u00a0how to think,\u00a0or even how to feel? I think it\u2019s quietly beautiful that the first thing they bought was measuring cups. See, if you\u2019ve struggled for this long, you can probably relate. The first thing you\u2019d buy is probably not some luxury vacation. It\u2019s something simple like the expensive bread at a grocery store.\u00a0I\u00a0got to\u00a0tell you, I love hearing my guests\u2019\u00a0stories. We\u2019ll get back to the conversation after a quick pause to support our sponsors.<\/p>\n<p>[00:11:58]\u00a0Now back to Don and Tana<\/p>\n<p>[Interview]<\/p>\n<p>[00:12:00]\u00a0<strong>Ramit:<\/strong>\u00a0What do you remember your parents or your family saying about money when you were young?<\/p>\n<p>[00:12:06]\u00a0<strong>Tana:<\/strong>\u00a0I got the money doesn\u2019t grow on trees. But other than that, there weren\u2019t a lot of conversations about money. My parents were both self-employed, so the income went up and down, and I could tell where we were at based on what we were eating for dinner. When things were good, there would be the occasional like, \u201cOh, we\u2019re going to have a filet mignon tonight.\u201d And where things were not great, it was meatloaf and spaghetti meatballs.<\/p>\n<p>[00:12:31]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Who did you see dealing with money in your family?<\/p>\n<p>[00:12:35]\u00a0<strong>Tana:<\/strong>\u00a0My mother.<\/p>\n<p>[00:12:36]\u00a0<strong>Ramit:<\/strong>\u00a0Mom. Okay. What about dad?<\/p>\n<p>[00:12:38]\u00a0<strong>Tana:<\/strong>\u00a0My mom did the bookkeeping for his business in addition to the bookkeeping for her business, and so then she did all the budgeting. So any money negotiations went through mom.<\/p>\n<p>[00:12:48]\u00a0<strong>Ramit:<\/strong>\u00a0Don, can we go back to your childhood? I\u2019m curious.<\/p>\n<p>[00:12:51]\u00a0<strong>Don:<\/strong>\u00a0Sure.<\/p>\n<p>[00:12:52]\u00a0<strong>Ramit:<\/strong>\u00a0What do you remember about your family or parents, what they said about money when you were a kid?<\/p>\n<p>[00:12:57]\u00a0<strong>Don:<\/strong>\u00a0I grew up in a really poor, abusive household. It was like if you finished the last of something in the cereal box, you finished the last little bit of cereal, you got in trouble. Everything was scarcity to the nth degree.<\/p>\n<p>[00:13:10]\u00a0If I wanted to buy something, then I was going to have to go out and make money and buy it myself, which I started doing at 14. At 14, I found some pottery place that let me fold boxes for a nickel a box. And I would fold it, and then I would buy all the kids, all the Swedish fish they wanted at the swimming pool.<\/p>\n<p>[00:13:29]\u00a0<strong>Ramit:<\/strong>\u00a0Really? Why? Why\u2019d you do that?<\/p>\n<p>[00:13:31]\u00a0<strong>Don:<\/strong>\u00a0I think it was probably because at my house there wasn\u2019t anything, and there was no generosity. I think some people, the response goes one direction, and for me it went the other, which was then I\u2019m going to give everything away. Which Tana can tell you is an unfortunate theme of our life.<\/p>\n<p>[00:13:47]\u00a0<strong>Ramit:<\/strong>\u00a0That relate to the activism, to the non-profit world, etc.?<\/p>\n<p>[00:13:51]\u00a0<strong>Don:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:13:52]\u00a0<strong>Ramit:<\/strong>\u00a0Did you ever have a discussion that Tana said something like, \u201cYou are so busy giving to everyone else that you don\u2019t focus on this family?\u201d<\/p>\n<p>[00:14:03]\u00a0<strong>Don:<\/strong>\u00a0Yes. Not necessarily in those words. I received it as, \u201cI\u2019m making choices to give things away or care for someone, and our nose are barely above water. Why would we do that?\u201d And I want to be very clear, all reasonable questions to ask me. 100%.<\/p>\n<p>[00:14:25]\u00a0<strong>Ramit:<\/strong>\u00a0Did you have any values in your relationship, looking back from the beginning?<\/p>\n<p>[00:14:30]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:14:30]\u00a0<strong>Don:<\/strong>\u00a0I think one of the big values was that we always had people in our home. We were a hub for young people, college-age students that were displaced from families. So we would host big Easter meals and have everyone over, which then led us to feeding them, and we didn\u2019t have any money to feed them.<\/p>\n<p>[00:14:47]\u00a0<strong>Ramit:<\/strong>\u00a0How did you pay for that?<\/p>\n<p>[00:14:49]\u00a0<strong>Tana:<\/strong>\u00a0Credit cards.<\/p>\n<p>[00:14:51]\u00a0<strong>Don:<\/strong>\u00a0Credit cards.<\/p>\n<p>[00:14:51]\u00a0<strong>Ramit:<\/strong>\u00a0Tana, what about you? What values did you have in the relationship from the beginning?<\/p>\n<p>[00:14:56]\u00a0<strong>Tana:<\/strong>\u00a0We both value social justice. We both value giving back. My jobs have almost all been in non-profits as well. I just earned more than Don did. And we definitely value creating a community. I think you and I just also have a sense of responsibility to the world of wanting to leave it a better place than it was when we entered it.<\/p>\n<p>[00:15:25]\u00a0<strong>Ramit:<\/strong>\u00a0After hearing about your values, a lot of which I love, I understand community. That\u2019s how my family was raised. But it strikes me, and I\u2019m wondering, do either of you have trouble saying no?<\/p>\n<p>[00:15:45]\u00a0<strong>Tana:<\/strong>\u00a0No. Yes, yes, yes, I do.<\/p>\n<p>[00:15:50]\u00a0<strong>Ramit:<\/strong>\u00a0You do. And Don?<\/p>\n<p>[00:15:52]\u00a0<strong>Don:<\/strong>\u00a0It depends on the circumstance. If someone is in need, then I really struggle saying no.<\/p>\n<p>[00:16:00]\u00a0<strong>Ramit:<\/strong>\u00a0You know why I asked that question?<\/p>\n<p>[00:16:02]\u00a0<strong>Don:<\/strong>\u00a0No.<\/p>\n<p>[00:16:03]\u00a0<strong>Ramit:<\/strong>\u00a0Tana?<\/p>\n<p>[00:16:05]\u00a0<strong>Tana:<\/strong>\u00a0No.<\/p>\n<p>[00:16:06]\u00a0<strong>Ramit:<\/strong>\u00a0Hosting community, paying for it when you didn\u2019t have the money, at some point feeling obligated, real or perceived, difficulty saying no is the undercurrent of all those things. Do you see that?<\/p>\n<p>[00:16:23]\u00a0<strong>Tana:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:16:23]\u00a0<strong>Ramit:<\/strong>\u00a0Where else did the inability to say no show up specifically in your financial life?<\/p>\n<p>[00:16:30]\u00a0<strong>Tana:<\/strong>\u00a0I\u2019ve mostly been the one who\u2019s done the finances. We didn\u2019t have a lot of money conversations. At some point during our marriage, we just stopped having them. But Don would be like, \u201cWell, I need this. Can we afford it?\u201d And even though I\u2019m like, \u201cWell, no, not really,\u201d I would still be like, \u201cYeah. Okay.\u201d<\/p>\n<p>[00:16:54]\u00a0<strong>Ramit:<\/strong>\u00a0What was your magical phrase that you said? How would you say it to him?<\/p>\n<p>[00:16:58]\u00a0<strong>Tana:<\/strong>\u00a0I don\u2019t know how I would say. I guess like, \u201cYeah, you can get that.\u201d I don\u2019t know.<\/p>\n<p>[00:17:02]\u00a0<strong>Don:<\/strong>\u00a0I think it was stuff around it\u2019s going to be hard, but we can figure it out.<\/p>\n<p>[00:17:09]\u00a0<strong>Ramit:<\/strong>\u00a0Figure it out. Thank you very much. I was for the F word. It never fails. We\u2019ll figure it out. That\u2019s code for I have no [Bleep] idea how to do this, but I don\u2019t want to say no. We\u2019ll figure it out.<\/p>\n<p>[00:17:24]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:17:24]\u00a0<strong>Ramit:<\/strong>\u00a0So Tana, how many times do you think that happened?<\/p>\n<p>[00:17:28]\u00a0<strong>Tana:<\/strong>\u00a0Oh, a lot.<\/p>\n<p>[00:17:29]\u00a0<strong>Ramit:<\/strong>\u00a0A lot, right? Dozens, hundreds, etc.<\/p>\n<p>[00:17:32]\u00a0<strong>Tana:<\/strong>\u00a0Probably hundreds. Yeah.<\/p>\n<p>[00:17:34]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s pretty interesting that a deeply held worldview, like I struggle to say no, can come up in 10,000 different permutations in our life. We can chase after them and try to play whack-a-mole, but it\u2019s this. It\u2019s here, and it\u2019s here. And we have to change this. We have to acknowledge what we believe, but to trace it back to why, and then we have to decide if we want to change it. We could change a lot. We can\u2019t change everything. We could change a lot, but we have to have a reason to change it.<\/p>\n<p>[00:18:11]\u00a0<strong>Tana:<\/strong>\u00a0I think I know where that comes from for me, for a long, long part of my life, very low self-esteem and being a people pleaser. And so I always felt like I had to prove my worth. And so giving to people, saying yes to Don when he wanted things, I always felt like I had to be giving more than I was receiving in order to feel okay about it.<\/p>\n<p>[00:18:42]\u00a0<strong>Ramit:<\/strong>\u00a0Because? If you\u2019re taking more than you\u2019re giving, you are what?<\/p>\n<p>[00:18:49]\u00a0<strong>Tana:<\/strong>\u00a0In my mind, holding myself too highly.<\/p>\n<p>[00:18:53]\u00a0<strong>Ramit:<\/strong>\u00a0Mm. Mm. And I don\u2019t deserve to be up here.<\/p>\n<p>[00:18:58]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:18:59]\u00a0<strong>Ramit:<\/strong>\u00a0Right. So to prove my worth, I need to give more. I need to be adding value all the time.<\/p>\n<p>[00:19:06]\u00a0<strong>Tana:<\/strong>\u00a0Yes.<\/p>\n<p>[00:19:07]\u00a0<strong>Ramit:<\/strong>\u00a0And Don, similar dynamic exists for you, right?<\/p>\n<p>[00:19:10]\u00a0<strong>Don:<\/strong>\u00a0Yeah, 100%. I had the advantage of my job was giving, caring, and helping people. But the number of times that we said yes to things that we didn\u2019t have any business saying yes to, we just trusted it would work out. And the hard part, Ramit, is it worked out because now we\u2019re earning, and that lie plays in my head of like, see, it did work out.<\/p>\n<p>[Narration]<\/p>\n<p>[00:19:39]\u00a0<strong>Ramit:<\/strong>\u00a0I love that Don and Tana are service-minded, but their relationship to giving reveals something pretty interesting.\u00a0Generosity to others can be a good thing, but taken too far, it can become very harmful.<\/p>\n<p>[00:19:53]\u00a0In Don\u2019s case, he\u2019s generous, but he\u2019s gone into debt to help other people. He and Tana struggled to say no, and that shows up in lots of places in their lives. When\u00a0they had little money, they were generous,\u00a0and they went into debt to help others.<\/p>\n<p>[00:20:09]\u00a0If they continue that same behavior of giving,\u00a0but now they make hundreds of thousands of dollars,\u00a0how long do you think the money will last? This is why I love the phrase\u00a0\u201cmoney changes you.\u201d\u00a0Most people say it with a sneer, but money should change you. It\u2019s made me more adventurous, more spontaneous, more generous.<\/p>\n<p>[00:20:30]\u00a0In their cases, money should change them. And one of the things that should help them do is to set boundaries so they can prioritize their own rich life. Real quick, if you enjoy these videos, you\u00a0want to\u00a0be the first to know when we drop a new one,\u00a0make sure you hit that Subscribe button\u00a0now.\u00a0It helps me,\u00a0and it helps my team grow.<\/p>\n<p>[Interview]<\/p>\n<p>[00:20:49]\u00a0<strong>Ramit:<\/strong>\u00a0Did it work out? You two are earning a high income. I agree. But your financial status, still, pretty tumultuous and problematic, right?<\/p>\n<p>[00:21:00]\u00a0<strong>Don:<\/strong>\u00a0100%.<\/p>\n<p>[00:21:01]\u00a0<strong>Tana:<\/strong>\u00a0Yeah. The Washington Post came out with this thing like, \u201cAre you rich?\u201d<\/p>\n<p>[00:21:05]\u00a0<strong>Ramit:<\/strong>\u00a0They didn\u2019t contact me for that. Washington Post. Literally, who are you going to call if the headline has the word rich? There\u2019s only one person to call. I didn\u2019t get call. All right, go on.<\/p>\n<p>[00:21:16]\u00a0<strong>Tana:<\/strong>\u00a0So it\u2019s a thing where you fill out your net worth and your income and it tells you how you compare to other Americans. And we are literally in the bottom percent for net worth and then like top 6% for income.<\/p>\n<p>[00:21:32]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Your income is quite high, and your net worth is quite low. My take from that Don and Tana is it hasn\u2019t worked out.<\/p>\n<p>[00:21:39]\u00a0<strong>Don:<\/strong>\u00a0Agreed.<\/p>\n<p>[00:21:40]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019ve gotten very lucky in many different ways, and you have a chance to change your trajectory, but you have to make several intentional changes. I\u2019m not just talking about where money goes. We\u2019ll talk about that too. But it\u2019s this: \u201cWho are we if we have money? What changes do we need to make in the way we approach the world, the way we approach each other, the way we approach our money?\u201d<\/p>\n<p>[00:22:09]\u00a0It\u2019s basically in a way like you won the lottery, you all heard stories about lottery winners, and a lot of them go broke. Why? Because money alone isn\u2019t going to change a lot, but changing money and your approach to the world will. Right?<\/p>\n<p>[00:22:22]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:22:25]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. All right. What do you say we take a look at the numbers? Don, can you read off the word in bold and then the number in full next to it?<\/p>\n<p>[00:22:35]\u00a0<strong>Don:<\/strong>\u00a0Assets,\u00a0$202,824; investments,\u00a0$11,043;\u00a0savings,\u00a00; debt, $387,990.\u00a0Total net worth, negative $174,123.<\/p>\n<p>[00:22:58]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s scary to hear those actual numbers read out loud, right?<\/p>\n<p>[00:23:02]\u00a0<strong>Tana:<\/strong>\u00a0Yes.<\/p>\n<p>[00:23:05]\u00a0<strong>Ramit:<\/strong>\u00a0I think one of the things a lot of people don\u2019t get about money, about fitness, about relationships, about these big things in life is when things are not going well, we don\u2019t want to talk about them or think about them. That\u2019s why I have a lot of compassion for people who are in a bad financial state and they ignore it. It\u2019s because you have to have a real pressing reason to want to engage with negative $174,000 at the age 48 and 50.<\/p>\n<p>[00:23:33]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:23:33]\u00a0<strong>Ramit:<\/strong>\u00a0I\u00a0want to\u00a0break down your assets for a second. $202,000, is that a house?<\/p>\n<p>[00:23:39]\u00a0<strong>Don:<\/strong>\u00a0Yes.<\/p>\n<p>[00:23:40]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. And your debt,\u00a0let\u2019s work through this for a second. So we have\u00a0a\u00a0145,000-dollar\u00a0mortgage.\u00a0We\u00a0have $168,000 of student loans,\u00a0$51,000 of credit card\u00a0debt, 12,000-dollar\u00a0lease, and $10,000 personal loan.<\/p>\n<p>[00:24:02]\u00a0<strong>Tana:<\/strong>\u00a0Yes.<\/p>\n<p>[00:24:03]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Have to ask a few questions. $51,000 of credit card debt,\u00a0what\u2019s that for?<\/p>\n<p>[00:24:09]\u00a0<strong>Tana:<\/strong>\u00a0That has built up over time.<\/p>\n<p>[00:24:12]\u00a0<strong>Don:<\/strong>\u00a0I think it came from 30 years of barely keeping our nose above water and just $2,000 under water one year, 3,000 under the next year.<\/p>\n<p>[00:24:21]\u00a0<strong>Tana:<\/strong>\u00a0And we went up 20, 25,000 during the time of unemployment, just buying groceries and\u2013<\/p>\n<p>[00:24:32]\u00a0<strong>Don:<\/strong>\u00a0Because we had no safety\u00a0net.<\/p>\n<p>[00:24:34]\u00a0<strong>Tana:<\/strong>\u00a0Paying medical bills.<\/p>\n<p>[00:24:37]\u00a0<strong>Ramit:<\/strong>\u00a0When that happened afterwards, did you take any lessons away from that?<\/p>\n<p>[00:24:43]\u00a0<strong>Don:<\/strong>\u00a0Sort of.\u00a0I think,\u00a0yes, but it\u2019s the\u00a0conflicting information you get online, of like, do you pay off your high debt credit cards? And that\u2019s what we did with our first cut go round of getting healthy financially, was we just put everything towards our debt.\u00a0But that meant nothing to catch us when we both lost our jobs.<\/p>\n<p>[00:25:06]\u00a0The safety net became the credit card space that we created by being aggressive about paying our debts. And that\u2019s exactly what we\u2019re doing right now. And that\u2019s part of the reason we\u2019re like, we don\u2019t know.\u00a0Is that the right thing to just pay off as fast as we can? Or should we be splitting that up and putting some in\u00a0emergency? So I think we\u2019ve learned to ask the question better. I just don\u2019t know that we\u2019ve made any changes yet because we\u2019re uncertain.<\/p>\n<p>[Narration]<\/p>\n<p>[00:25:34]\u00a0<strong>Ramit:<\/strong>\u00a0You can see that they\u2019re paralyzed by these basic questions and they\u2019re still trying to make decisions as if a job loss is right around the corner, not as a powerful couple that makes hundreds of thousands of dollars per year. We\u2019ll be right back after this short break.<\/p>\n<p>[00:25:51]\u00a0Welcome back. Let\u2019s keep going.<\/p>\n<p>[Interview]<\/p>\n<p>[00:25:53]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s\u00a0go onto your income.\u00a0Tana, read me this combined monthly income.<\/p>\n<p>[00:25:59]\u00a0<strong>Tana:<\/strong>\u00a0Okay. Gross monthly income, 21,500.<\/p>\n<p>[00:26:03]\u00a0<strong>Ramit:<\/strong>\u00a0So that\u2019s $258,000 per year. Who knew that you make that much?<\/p>\n<p>[00:26:12]\u00a0<strong>Don:<\/strong>\u00a0We\u00a0both did.<\/p>\n<p>[00:26:13]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. Really? Literally 50% of the people on this show don\u2019t know how much money they make.<\/p>\n<p>[00:26:18]\u00a0<strong>Tana:<\/strong>\u00a0Are\u00a0you serious? How could you not know?<\/p>\n<p>[00:26:20]\u00a0<strong>Don:<\/strong>\u00a0And not only that,\u00a0we make more than that.<\/p>\n<p>[00:26:25]\u00a0<strong>Ramit:<\/strong>\u00a0Why? What?\u00a0Why?<\/p>\n<p>[00:26:27]\u00a0<strong>Don:<\/strong>\u00a0Because\u00a0I do consulting,\u00a0and that\u2019s the number that I felt comfortable saying that I could have.<\/p>\n<p>[00:26:34]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. I love\u00a0a conservative planner. And for everyone listening, what do I mean by conservative? I\u2019m talking about, it\u2019s almost like running with a weight vest. I\u2019m speaking as a guy who doesn\u2019t run a freaking marathon, but you want to train in harder conditions than you\u2019re actually going to run the race in.<\/p>\n<p>[00:26:53] When you\u2019re putting numbers on your CSP, if you\u2019re putting your income and you\u2019re not sure, round down.\u00a0Round down because it\u2019s better to end up with more than to end up with less.\u00a0And if you have expenses you\u2019re not sure, round up. You\u2019d rather end up with more money than less at the end of the year. So that\u2019s how we do it. That\u2019s conservative planning.\u00a0All right.\u00a0So it says you make 258,000.\u00a0How much are you actually going to make? Give\u00a0me the range.\u00a0From 258 to what?<\/p>\n<p>[00:27:22]\u00a0<strong>Don:<\/strong>\u00a0320, 325.<\/p>\n<p>[00:27:26]\u00a0<strong>Ramit:<\/strong>\u00a0What the [Bleep]?\u00a0It\u2019s\u00a0$60,000 of buffer? Didn\u2019t you guys used to make\u00a0$60,000 in two years?<\/p>\n<p>[00:27:35]\u00a0<strong>Tana:<\/strong>\u00a0Yes.<\/p>\n<p>[00:27:35]\u00a0<strong>Ramit:<\/strong>\u00a0What the\u00a0hell kind of planning is this?<\/p>\n<p>[00:27:39]\u00a0<strong>Tana:<\/strong>\u00a0Well, to be fair, he\u2019s a consultant,\u00a0so he doesn\u2019t get paid for vacation. So he\u2019s trying to find a way to establish a number that won\u2019t make him stressed out.<\/p>\n<p>[00:27:52]\u00a0<strong>Don:<\/strong>\u00a0I can\u2019t take off work,\u00a0Ramit,\u00a0because a day\u2019s work off was the equivalent of over a month\u2019s salary sometimes.\u00a0So in my mind, I can\u2019t even take a day off. I can be sick and I\u2019m\u00a0going to\u00a0work.\u00a0Or even take off a day just to go for a walk in the park, because I\u2019m like, is is that walk in the park really\u00a0going to\u00a0be worth X number of dollars?<\/p>\n<p>[00:28:16]\u00a0<strong>Ramit:<\/strong>\u00a0You remind me of me. Except it\u2019s when I was in college. Back then I rated everything in terms of loads of laundry. Those tacos from\u2013\u00a0we had a\u00a0Jack in the\u00a0Box right off campus\u2013\u00a0that\u2019s two loads of laundry. And so people who earn variable income, they become really weird.<\/p>\n<p>[00:28:34]\u00a0They\u2019re like,\u00a0\u201cI can\u2019t go to my son\u2019s soccer game.\u201d\u00a0My son is\u00a0going to\u00a0cost me $1,500. I\u2019m like,\u00a0\u201cI\u2019m not a parent, but I\u2019m not sure that\u2019s a healthy way to look at your relationship with your son.\u201d\u00a0And they\u2019re like,\u00a0\u201cYeah, but what about the cash?\u201d<\/p>\n<p>[00:28:51]\u00a0<strong>Don:<\/strong>\u00a0I can tell you tonight at dinner, I knew exactly how many minutes it took me to earn that dinner.<\/p>\n<p>[00:28:59]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, listen, that\u2019s super unhealthy, but I understand it. I understand it. Especially right now, money is top of mind\u00a0because\u00a0for the first time, you have some.\u00a0You have light at the end of the tunnel. I get it. But I just need you to know that\u2019s not healthy,\u00a0and we need to put a plan in place so you don\u2019t think that way.\u00a0Because\u00a0that\u2019s a real messed up way to think about money. Okay?<\/p>\n<p>[00:29:20]\u00a0<strong>Don:<\/strong>\u00a0Agreed.<\/p>\n<p>[00:29:21]\u00a0<strong>Ramit:<\/strong>\u00a0So let\u2019s say I like your plan here, 258,000.\u00a0Probably\u00a0going to\u00a0make more. That\u2019s awesome. We can make a plan for what to do with the additional income. We always have a plan.\u00a0And let\u2019s keep working our way down. So your net income is 13,675. So that means what?\u00a0You\u2019re taking a lot of pre-tax,\u00a0401(k)type of stuff.<\/p>\n<p>[00:29:44]\u00a0<strong>Tana:<\/strong>\u00a0I have pre-tax, health insurance,\u00a0and\u00a0401(k)through my job. And then we pay estimated taxes for his consulting income.<\/p>\n<p>[00:29:57]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, okay.\u00a0All right.\u00a0That makes sense. Let\u2019s look at your fixed cost, shall we?\u00a0What\u2019s this number right next to the fixed cost,\u00a0Don?<\/p>\n<p>[00:30:04]\u00a0<strong>Don:<\/strong>\u00a079%.<\/p>\n<p>[00:30:05]\u00a0<strong>Ramit:<\/strong>\u00a0What do you think of that number?<\/p>\n<p>[00:30:07]\u00a0<strong>Don:<\/strong>\u00a0I think it\u2019s really high. But I\u2019d like to defend it with the debt payments\u00a0that\u00a0an extra $4,000.<\/p>\n<p>[00:30:15]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that is correct. Your extra debt payments are $4,000 per month. You\u2019re paying it aggressively to pay off your debt. I understand. And it we took that down by $4,000, lets watch what happens to this number here that\u2019s 79%. Read it off to me, Don.<\/p>\n<p>[00:30:31]\u00a0<strong>Don:<\/strong>\u00a050%.<\/p>\n<p>[00:30:33]\u00a0<strong>Ramit:<\/strong>\u00a050%. 5-0.\u00a0All right.\u00a0Right now with your income, 50%,\u00a0great. And let\u2019s talk about this for a second. So why is your fixed cost 50%? Well, your mortgage is really low. It\u2019s $1,125 a month. Let\u2019s look at a couple of other things here. You got a car payment? 441. What kind of car do you have?<\/p>\n<p>[00:30:57]\u00a0<strong>Tana:<\/strong>\u00a0It\u2019s an electric SUV.<\/p>\n<p>[00:30:59]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, okay. That\u2019s why you\u2019re leasing,\u00a0because\u00a0it\u2019s electric?<\/p>\n<p>[00:31:03]\u00a0<strong>Tana:<\/strong>\u00a0We lease, honestly, because that is a security item for me of not wanting to deal with surprise repairs and\u00a0stuff like that.<\/p>\n<p>[00:31:17]\u00a0<strong>Ramit:<\/strong>\u00a0What\u00a0car did you have when you were a teenager?\u00a0Okay, hold on. Let me just guess. I\u2019m just\u00a0going to\u00a0guess here\u00a0because\u00a0I know it\u2019s a horrible car because of the way you talk about car repairs. Was it a Chevy Lumina?<\/p>\n<p>[00:31:29]\u00a0<strong>Tana:<\/strong>\u00a0No, it was not.\u00a0Actually,\u00a0a Honda Civic was my first car.<\/p>\n<p>[00:31:33]\u00a0<strong>Ramit:<\/strong>\u00a0Blasphemy. I don\u2019t believe you.<\/p>\n<p>[00:31:36]\u00a0<strong>Don:<\/strong>\u00a0Wait till the second one.<\/p>\n<p>[00:31:37]\u00a0<strong>Tana:<\/strong>\u00a0That\u2019s the one I totaled.<\/p>\n<p>[00:31:39]\u00a0<strong>Ramit:<\/strong>\u00a0Okay,\u00a0okay,\u00a0okay.\u00a0Then what was\u00a0the next one?<\/p>\n<p>[00:31:40]\u00a0<strong>Tana:<\/strong>\u00a0And then I got a Toyota\u00a0Tercel.<\/p>\n<p>[00:31:41]\u00a0<strong>Ramit:<\/strong>\u00a0What the [Bleep]? Those are good cars. How do you have a Honda and a Toyota and you have this view about car repairs?<\/p>\n<p>[00:31:47]\u00a0<strong>Tana:<\/strong>\u00a0I got a really old Toyota\u00a0Tercel.<\/p>\n<p>[00:31:51]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m sorry,\u00a0Honda and Toyota. I didn\u2019t know this would happen.\u00a0These\u00a0shows are not scripted. I\u2019m trying to make friends with Honda and Toyota. I love you guys. I love you. All right.\u00a0Listen,\u00a0I understand that\u2013 look, first of all, the lease isn\u2019t that much,\u00a0so I\u2019m just\u00a0going to\u00a0move on past it.\u00a0All right. Groceries are 1,200 for two people?<\/p>\n<p>[00:32:14]\u00a0<strong>Tana:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:32:15]\u00a0<strong>Ramit:<\/strong>\u00a0Clothes, whatever,\u00a0zero.\u00a0Subscriptions,\u00a0235.\u00a0Cleaning and lawn care.\u00a0What is\u00a0this?\u00a0House cleaning?<\/p>\n<p>[00:32:23]\u00a0<strong>Tana:<\/strong>\u00a0Yes. That is\u00a0my one thing I did\u00a0almost right away.\u00a0My one luxury is cleaning.<\/p>\n<p>[00:32:34]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Fine.\u00a0Medical is 335,\u00a0and haircuts and hygiene 125.\u00a0All right.\u00a0So you\u2019re paying 10,783 a month. I have no comments right now except I recognize that you\u2019re \u201coverpaying\u201d\u00a0towards your debt. You\u2019re doing it intentionally. Fine. Let\u2019s go down to the rest of it though.\u00a0Your investments are\u00a0at zero.<\/p>\n<p>[00:32:54]\u00a0<strong>Don:<\/strong>\u00a0Yep.<\/p>\n<p>[00:32:54]\u00a0<strong>Ramit:<\/strong>\u00a0And if we look at your total investments, you have 11,000 bucks at the age of 50.<\/p>\n<p>[00:33:00]\u00a0<strong>Don:<\/strong>\u00a0Crushing it.<\/p>\n<p>[00:33:01]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.\u00a0That\u2019s\u00a0a problem. Right?<\/p>\n<p>[00:33:03]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:33:03]\u00a0<strong>Don:<\/strong>\u00a0That\u2019s a\u00a0big problem.<\/p>\n<p>[00:33:04]\u00a0<strong>Ramit:<\/strong>\u00a0Good.\u00a0Savings are\u2013\u00a0now, this was another clue that was quite interesting. You\u2019re saving $100 per month. This is the only savings,\u00a0and it\u2019s going to a contribution\u00a0for son.<\/p>\n<p>[00:33:18]\u00a0<strong>Don:<\/strong>\u00a0So our son pays rent, and we decided that we would take\u00a0$100\u00a0of that rent and put it in a high-yield savings for him.<\/p>\n<p>[00:33:29]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. I appreciate that. Let\u2019s go down\u00a0.So that\u2019s all the savings you have.\u00a0And you currently have zero in savings.<\/p>\n<p>[00:33:38]\u00a0<strong>Don:<\/strong>\u00a0Yes. Other than the account\u00a0for\u00a0the tax.<\/p>\n<p>[00:33:41]\u00a0<strong>Tana:<\/strong>\u00a0Yeah,\u00a0we have a high yield savings account. We put our estimated taxes in. We set aside until it\u2019s time to pay\u00a0them.<\/p>\n<p>[00:33:48]\u00a0<strong>Ramit:<\/strong>\u00a0So you\u2019re all\u00a0dialed in on uncle Sam. You\u2019re like,\u00a0\u201cOkay, we\u2019re not\u00a0going to\u00a0mess that one up.\u201d\u00a0How about your own freaking savings?\u00a0What about that?<\/p>\n<p>[00:33:58]\u00a0<strong>Tana:<\/strong>\u00a0That\u2019s one of the reasons why we wanted to do this,\u00a0is\u00a0because\u00a0we don\u2019t know\u2013 anytime I put money in savings, I feel like, oh, the cards are charging so much more interest. What\u2019s the value of this stuff sitting here when it could pay down interest and save us that money every month?<\/p>\n<p>[00:34:22]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s interesting that you only started thinking that way now and not for the last 30 years.<\/p>\n<p>[00:34:26]\u00a0<strong>Tana:<\/strong>\u00a0No, we did.<\/p>\n<p>[00:34:28]\u00a0<strong>Ramit:<\/strong>\u00a0You have $51,000 of credit card debt that you\u2019ve had\u00a0for\u2013<\/p>\n<p>[00:34:31]\u00a0<strong>Tana:<\/strong>\u00a0Oh,\u00a0yeah. But we didn\u2019t have a lot of money to do that.\u00a0We were living paycheck to paycheck.<\/p>\n<p>[00:34:40]\u00a0<strong>Ramit:<\/strong>\u00a0Other couples might say, we didn\u2019t have the money, so one of us went out and got a different job.<\/p>\n<p>[00:34:46]\u00a0<strong>Tana:<\/strong>\u00a0Oh,\u00a0we\u2019ve done that.<\/p>\n<p>[00:34:48]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019d the money go?<\/p>\n<p>[00:34:49]\u00a0<strong>Tana:<\/strong>\u00a0We did not make a lot.\u00a0I don\u2019t think I can emphasize enough just how little money Don made.\u00a0I\u2019m not trying to throw him under the bus. It was just that part of the time I had a decent paying job. Other parts of the time, I did not. And so for most of our adulthood,\u00a0we\u2019ve each been working two, three jobs.<\/p>\n<p>[Narration]<\/p>\n<p>[00:35:16]\u00a0<strong>Ramit:<\/strong>\u00a0Something odd is going on, but I can\u2019t figure out what. Can you feel it? My antenna are going up because I can\u2019t understand how they ended up with so much debt, even though they both held multiple jobs. What were the jobs? Why did they have so much debt for so long? I keep asking and then suddenly I find the answer.<\/p>\n<p>[Interview]<\/p>\n<p>[00:35:38]\u00a0<strong>Ramit:<\/strong>\u00a0What was the pay\u00a0disparity between the two of you?<\/p>\n<p>[00:35:42]\u00a0<strong>Don:<\/strong>\u00a0Double or triple.<\/p>\n<p>[00:35:43]\u00a0<strong>Tana:<\/strong>\u00a0I\u00a0think it\u2019s more than that, Don. It was more five times.<\/p>\n<p>[00:35:52]\u00a0<strong>Ramit:<\/strong>\u00a0You made five times more, Tana, than Don?<\/p>\n<p>[00:35:55]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:35:55]\u00a0<strong>Ramit:<\/strong>\u00a0And was there a discussion about like, \u201cHey, in order for us to pay our bills, this is how much we need to be bringing together. This is how much I make, so this is how much you probably need to make?\u201d<\/p>\n<p>[00:36:05]\u00a0<strong>Don:<\/strong>\u00a0I don\u2019t think so. And I think a lot of that goes back to the sense of call. So Ramit, part of this is I was a pastor for 20 years. I\u2019ve walked away from the church. And there was a real sense of guilt and shame. I got defrocked for actually doing inclusion, for doing LGBTQ weddings.<\/p>\n<p>[00:36:31]\u00a0So I got my credentials stripped. I got blackballed in a lot of places. But there was this sense of these people that we helped and we cared for that were like, \u201cYou can\u2019t walk away from this.\u201d The number of times that Tana and I would have conversations, I\u2019d be like, \u201cI\u2019m done. I\u2019m just going to go get a job. I\u2019m done. I can\u2019t do this anymore.\u201d But then people were like, what you did or the conversations we had, blah, blah, blah. We were stuck in this weird spiritual guilt, shame, and this sense that, how could someone like me who has done so much walk away.<\/p>\n<p>[00:37:11]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:37:12]\u00a0<strong>Don:<\/strong>\u00a0I will say the one thing I\u2019m proud of is I was very progressive and was racial reconciliation and LGBTQ inclusion, and fought a lot of people in that. But that also embedded it even more. Because you\u2019re the one person that\u2019s doing that or saying that. And I got played a fiddle and emotionally, spiritually, mentally, and I\u2019m also really bitter about that, Ramit. I\u2019m so angry.<\/p>\n<p>[Narration]<\/p>\n<p>[00:37:42]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. Okay, now I get it. Imagine all the invisible scripts associated with growing up religious. And not just religious, but being a pastor.\u00a0And then what it took to speak out and get defrocked or basically kicked out of what was your life\u2019s work. Honestly, I want to acknowledge how brave it was for Don to speak out and for him to share his story here.\u00a0That\u2019s\u00a0something I really appreciate about my guests, and I cannot begin to imagine how difficult that decision was.\u00a0It\u2019s not just a political or a religious statement. For someone who\u2019s a member of the church, it\u2019s often socially devastating. Let\u2019s hear what Tana has to\u00a0say.<\/p>\n<p>[Interview]<\/p>\n<p>[00:38:25]\u00a0<strong>Tana:<\/strong>\u00a0We had a great community and everything, but he was treated very terribly in many of the church context. And we both grew up in a more conservative Christian context, and so we both had it ingrained in us about tithing. And you tithe even if it hurts.<\/p>\n<p>[00:38:45]\u00a0And so some of our original debt is because we were tithing, and we couldn\u2019t afford to. And this idea that if you\u2019re in ministry, it is because it\u2019s a calling, and you have decided to take a vow of poverty. There was a church we were at that we got a used car from someone for a really good dear, and some of the church people were like, \u201cWell, that\u2019s a fancy car.\u201d<\/p>\n<p>[00:39:12]\u00a0<strong>Don:<\/strong>\u00a0It was 1980 BMW that was rusted out completely. But it was a BMW.<\/p>\n<p>[00:39:18]\u00a0<strong>Tana:<\/strong>\u00a0Right. So it was like there was criticism of what you spend your money on. And so that caused other issues for us as well in what we purchase and how we talk about money.<\/p>\n<p>[00:39:29]\u00a0<strong>Ramit:<\/strong>\u00a0Can I say, first off, I did not know any of this? It now helps me understand so much of what I see because I\u2019m over here like, the income Don was earning was really low, really low. Now I get it. And why is there this need for service, service? I love service. I get it. I love community. I get it. But now it makes sense. Hell, I speak to people who are religious frequently on this podcast, and I understand.<\/p>\n<p>[00:40:02]\u00a0Being religious comes with certain feelings about money. I get that. But I don\u2019t often speak to someone who was a pastor. That is like tying a knot. It\u2019s like two people pulling at the knot. And the more you tried to become inclusive, which I totally appreciate and support LGBTQ and all kinds of communities, the more you become embedded by saying like, \u201cI\u2019m fighting for this ministry, and now I can\u2019t leave because look at what I did.\u201d It\u2019s a very tricky knot that you\u2019ve constructed.<\/p>\n<p>[00:40:35]\u00a0<strong>Don:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:40:36]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Wow.<\/p>\n<p>[00:40:39]\u00a0<strong>Don:<\/strong>\u00a0Our church closing after COVID was what finally I went back into the business world. And I started earning what I could make now.<\/p>\n<p>[00:40:49]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. So had the church stayed open, would you still be there?<\/p>\n<p>[00:40:54]\u00a0<strong>Don:<\/strong>\u00a0It was getting dicey, so I think it was coming to an end for me. But there\u2019s a chance because it was a church we started.<\/p>\n<p>[00:41:03]\u00a0<strong>Ramit:<\/strong>\u00a0For people listening, I don\u2019t think they can understand how powerful a force religion is. I don\u2019t think people can truly understand what a pull it has on you. It\u2019s not like, \u201cHey, look at the CSP. It\u2019s so obvious. You need to go earn more money.\u201d That\u2019s a different language. That\u2019s a different planet versus you being in the church, serving people, serving God, all these things. And you\u2019re actually even affirmatively taught money is not what you\u2019re here for. In fact, if you have a nice car, a 1980 BMW, you must have done something wrong. That\u2019s fancy. Your values are opposite.<\/p>\n<p>[00:41:48]\u00a0<strong>Don:<\/strong>\u00a0I rode a bicycle for 20 years instead of having a car.<\/p>\n<p>[00:41:53]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Wow. I\u2019m so glad I know this. It really helps me understand these numbers. Giving me the story behind the numbers is why I do what I do. Because I can sit here and look at spreadsheets all day. It\u2019s boring. Hearing your story, wow. I feel like I just saw color for the first time. Okay. Let\u2019s look at these numbers again. We got to take it from top. Wow, I feel reinvigorated.<\/p>\n<p>[00:42:17]\u00a0<strong>Don:<\/strong>\u00a0Okay, good.<\/p>\n<p>[00:42:18]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. You got a house. Fine. You have only $11,000 of investments at age 50. Okay.\u00a0Well fix that.\u00a0Savings at zero.\u00a0No way. We\u2019re\u00a0going to\u00a0fix that too. We got a lot of debt. We\u2019re\u00a0going to\u00a0make a plan for that. The income is high. It\u2019s high. It\u2019s at $258,000 and probably higher than that.<\/p>\n<p>[00:42:38]\u00a0Fixed costs are at 50%, but you\u2019re adding $4,000 a month towards debt. Okay, great. Investments are effectively at zero. You have some pre-tax, a few thousand bucks.\u00a0Fine. We will tackle that.\u00a0Savings at basically zero. We\u2019re\u00a0going to\u00a0fix that. And then your guilt-free spending is at 20%,\u00a0$2,792 a month. What\u2019s that? That\u2019s a lot.<\/p>\n<p>[00:42:59]\u00a0<strong>Don:<\/strong>\u00a0It\u00a0is a lot.<\/p>\n<p>[00:43:01]\u00a0<strong>Tana:<\/strong>\u00a0So that\u2019s where we just shoved it all down there and are hoping for guidance on what to do.<\/p>\n<p>[00:43:09]\u00a0<strong>Ramit:<\/strong>\u00a0Y\u2019all are not in the church anymore. This isn\u2019t the Lord coming and telling you what to do. Now\u00a0it\u2019s your\u00a0turn.\u00a0See?<\/p>\n<p>[00:43:16]\u00a0<strong>Don:<\/strong>\u00a0Listen\u2013<\/p>\n<p>[00:43:16]\u00a0<strong>Tana:<\/strong>\u00a0Save us, Ramit.<\/p>\n<p>[00:43:19]\u00a0<strong>Don:<\/strong>\u00a0That\u00a0carefree spending is also a mind\u00a0job. It really is.<\/p>\n<p>[00:43:23]\u00a0<strong>Tana:<\/strong>\u00a0It is\u00a0because\u00a0it doesn\u2019t feel carefree.<\/p>\n<p>[00:43:26]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s talk about it. Let\u2019s talk.\u00a0Just\u00a0so I understand, it says that you have $2,792 left. I\u2019m\u00a0going to\u00a0just assume that you are spending $2,792 a month.\u00a0Would it be more than that?<\/p>\n<p>[00:43:42]\u00a0<strong>Tana:<\/strong>\u00a0There were a couple\u00a0of\u00a0months that it went over,\u00a0and we didn\u2019t pay as much of the stuff towards credit cards.<\/p>\n<p>[00:43:51]\u00a0<strong>Ramit:<\/strong>\u00a0Aha.\u00a0We are going to fix this. So that is simply repeating the pattern of what you used to do, but with bigger numbers.\u00a0That\u2019s a no go. So part of what we\u2019re\u00a0going to\u00a0do is reinvent yourselves.\u00a0And I would actually guess that you two are pretty comfortable with reinvention.\u00a0So\u00a0Good. Look at those nods.\u00a0Big smiles. Big nods. Love it. That\u2019s the energy\u2013<\/p>\n<p>[00:44:11]\u00a0<strong>Tana:<\/strong>\u00a0The only thing constant is change.<\/p>\n<p>[00:44:13]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Reinvention is good, and the best part is we get to choose what we reinvent ourselves to be. Amazing. At 48 and 50, you have an opportunity. You have time. You have high earnings, probably more than even is shown on here. So there\u2019s a possibility of some really great stuff happening.<\/p>\n<p>[00:44:30]\u00a0But you\u2019ll notice some of these loose offhand comments you make reveal a way of looking at the world. Like, \u201cThere have been months where we spent too much, so we cut back on paying our debt as much.\u201d Red alert. These are ways that the old Don and Tana behaved the new Don and Tana do not. So before we get into the specific plans, can you just tell me, who are Don and Tana now as it relates to money? We are\u2013 finish the end of that sentence for me.<\/p>\n<p>[00:45:07]\u00a0<strong>Don:<\/strong>\u00a0Determined.<\/p>\n<p>[00:45:09]\u00a0<strong>Tana:<\/strong>\u00a0Responsible.<\/p>\n<p>[00:45:09]\u00a0<strong>Don:<\/strong>\u00a0Savvy.<\/p>\n<p>[00:45:10]\u00a0<strong>Ramit:<\/strong>\u00a0Savvy.<\/p>\n<p>[00:45:12]\u00a0<strong>Tana:<\/strong>\u00a0Ooh, that\u2019s a good word. That\u2019s a good word. What do we want to be? Balanced.<\/p>\n<p>[00:45:20]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Good. Keep going.<\/p>\n<p>[00:45:22]\u00a0<strong>Tana:<\/strong>\u00a0Relaxed.<\/p>\n<p>[00:45:23]\u00a0<strong>Ramit:<\/strong>\u00a0Relaxed. Nice. Tana.<\/p>\n<p>[00:45:27]\u00a0<strong>Tana:<\/strong>\u00a0I want to be comfortable. Not having to worry about the small stuff, feeling confident that we are saving for retirement, but also able to enjoy extra special things.<\/p>\n<p>[00:45:48]\u00a0<strong>Ramit:<\/strong>\u00a0I love that. Don, anything else?<\/p>\n<p>[00:45:51]\u00a0<strong>Don:<\/strong>\u00a0I think up until now it\u2019s always just been today. Are we secure today? And the idea of actually having any kind of future looking would be wonderful.<\/p>\n<p>[00:46:01]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. I love that. It\u2019s very much like you two have been driving in a thick fog for most of your lives. You can only see 15 feet ahead. And if I were to ask you what\u2019s a mile down the road, you\u2019re like, \u201cA mile? I\u2019m just trying to get the next 15 feet.\u201d And suddenly the fog has cleared. Do you realize?<\/p>\n<p>[00:46:19]\u00a0And yet you are still driving as if you can only see 15 feet ahead. And all I\u2019m saying is Don and Tana, open your eyes. Look at that beautiful vista. We can see miles. We got to make a couple of changes, but we can see further than we\u2019ve ever seen. That\u2019s what I want you to recognize here.<\/p>\n<p>[00:46:37]\u00a0We\u2019ll make some changes to help you feel determined, responsible, savvy, balanced, relaxed, confident, enjoying extra special things, and feeling secure today and tomorrow. Doesn\u2019t that sound like a vision?<\/p>\n<p>[Narration]<\/p>\n<p>[00:46:47]\u00a0<strong>Ramit:<\/strong>\u00a0We\u2019ll be right back after this short break.<\/p>\n<p>[00:46:50]\u00a0Now back to the show.<\/p>\n<p>[Interview]<\/p>\n<p>[00:46:52]\u00a0<strong>Ramit:<\/strong>\u00a0So you currently have a bunch of debt. Do you know how long until this debt that you are paying $5,895 a month towards will be paid off?<\/p>\n<p>[00:47:03]\u00a0<strong>Don:<\/strong>\u00a0July next year.<\/p>\n<p>[00:47:05]\u00a0<strong>Ramit:<\/strong>\u00a0Whoa. You ran the calculations?<\/p>\n<p>[00:47:07]\u00a0<strong>Tana:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:47:09]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Very impressive. I\u2019m pleasantly surprised. Who ran the calculations?<\/p>\n<p>[00:47:14]\u00a0<strong>Tana:<\/strong>\u00a0I think we both did.<\/p>\n<p>[00:47:15]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s amazing. That\u2019s quite advanced. I ran your debt payoff as well, and I got a different answer, but you have more information than I do.<\/p>\n<p>[00:47:23]\u00a0<strong>Don:<\/strong>\u00a0So that July number or date does not include the student loans.<\/p>\n<p>[00:47:30]\u00a0<strong>Tana:<\/strong>\u00a0Oh, yeah. No, that\u2019s just credit cards and personal loan.<\/p>\n<p>[00:47:34]\u00a0<strong>Ramit:<\/strong>\u00a0I was wondering why I got such a different answer. And why did you choose not to include student loans?<\/p>\n<p>[00:47:38]\u00a0<strong>Don:<\/strong>\u00a0Because Tana works in non-profit, and after 10 years, student loans are forgiven.<\/p>\n<p>[00:47:45]\u00a0<strong>Ramit:<\/strong>\u00a0Ah, good answer. Okay, so let\u2019s zero that out. Okay. I get basically the same thing as you. It\u2019s going to be paid off in about a year. Holy\u00a0[Bleep]. All right. Round of applause. This is good. You guys, this is really good. I\u2019m starting to see a plan here. Okay. This is great.<\/p>\n<p>[00:48:06]\u00a0<strong>Don:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:48:07]\u00a0<strong>Ramit:<\/strong>\u00a0You guys will be 51 and 49 roughly, and this debt will be paid off. Isn\u2019t that cool?<\/p>\n<p>[00:48:12]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:48:12]\u00a0<strong>Don:<\/strong>\u00a0Amazing.<\/p>\n<p>[00:48:14]\u00a0<strong>Ramit:<\/strong>\u00a0Ooh. Oh my god. All right. I\u2019m too excited. I got to calm down. Wow. I rarely get a very pleasant surprise when I\u2019m looking at multiple sources of debt. And here, it\u2019s like, \u201cYeah, wipe the 168K, and take that away.\u201d It\u2019s going to be\u2013 I\u2019m like, \u201cThis is great.\u201d Okay. Amazing. So knowing what we all now know, that your debt is going to be paid off in roughly a year, if you had to decide on a plan, what would you do?<\/p>\n<p>[00:48:51]\u00a0<strong>Don:<\/strong>\u00a0Our plan with limited knowledge was to just continue to put every penny we can into the the high interest rate debt, get that paid off, and then as soon as that\u2019s paid off, split that same money, that same pool of money. Just start putting it into investment and savings. But it feels terrible right now not to be putting anything in an investment, but logically, it also makes sense to pay off all that debt first. So yeah, we\u2019re just really confused.<\/p>\n<p>[00:49:25]\u00a0<strong>Ramit:<\/strong>\u00a0And Tana, what about you?<\/p>\n<p>[00:49:26]\u00a0<strong>Tana:<\/strong>\u00a0I\u2019ve been floundering on what the best move is. I would probably do more of the retirement.<\/p>\n<p>[00:49:37]\u00a0<strong>Ramit:<\/strong>\u00a0Why?<\/p>\n<p>[00:49:40]\u00a0<strong>Tana:<\/strong>\u00a0Because that terrifies me.<\/p>\n<p>[00:49:44]\u00a0<strong>Ramit:<\/strong>\u00a0Y\u2019all find what\u2019s going on here interesting? It\u2019s just, \u201cWe don\u2019t know anything about money. Tell us. Guide us.\u201d Now, I am here to help, for sure, but it\u2019s time for you to step into the fact that you make over $250,000 a year. And nobody\u2019s coming to save you. So getting paralyzed by, should we put money here or there, you might as well just pick one and do it.<\/p>\n<p>[00:50:12]\u00a050 years old, time is not on your side. You need motion, and you need to move fast. That\u2019s what we\u2019re going to work on today. It\u2019s time for us to embrace that we have money, and we need to start getting in motion. Nobody\u2019s going to push us and make us go. We\u2019ve got to do it. You agree?<\/p>\n<p>[00:50:30]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:50:30]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s okay if things go wrong a little bit. You might make a wrong decision and lose 1,500 bucks. Guys, 1,500 bucks is chump change compared to what we\u2019re talking about here. Smart people move fast. Why are you laughing?<\/p>\n<p>[00:50:47]\u00a0<strong>Tana:<\/strong>\u00a0I can\u2019t view 1,500 as chump change.<\/p>\n<p>[00:50:52]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. I know that Don and Tana 1.0, they would\u2019ve been laughing. Don and Tana 2.0 are like, \u201cOh,\u00a0[Bleep]. This guy\u2019s right. 1,500 bucks, it\u2019s a tiny percentage of what we make in a year.\u201d It\u2019s crazy to think. It\u2019s crazy to hear, but it\u2019s also true.<\/p>\n<p>[00:51:08]\u00a0<strong>Tana:<\/strong>\u00a0I am having a little bit of a hard time adjusting. Don and I were just having a conversation at dinner tonight where he was like, \u201cI feel like in some cases we\u2019re still buying the cheap thing that we\u2019re going to have to replace rather than saving, waiting, whatever, and buying the nicer thing.\u201d<\/p>\n<p>[00:51:27]\u00a0<strong>Don:<\/strong>\u00a0We\u2019re not thinking about how do we buy something for the next 20 years. I think we\u2019re still purchasing for today. If it lasts a long time, great. We got lucky. And if it doesn\u2019t, then we\u2019ll replace it. But yeah.<\/p>\n<p>[00:51:40]\u00a0<strong>Ramit:<\/strong>\u00a0I think it speaks to the two of you actually believing that you deserve to live a Rich Life and that you have the agency and control to actually do it.<\/p>\n<p>[00:51:55]\u00a0<strong>Don:<\/strong>\u00a0Yeah, I definitely don\u2019t feel like I deserve.<\/p>\n<p>[00:51:57]\u00a0<strong>Ramit:<\/strong>\u00a0And so if you don\u2019t feel you deserve, which I can understand so many decades of why, then every time you try to make plans about money, they could be even investing money, why would we? I don\u2019t deserve to have $500,000. We don\u2019t deserve to be millionaires.<\/p>\n<p>[00:52:22]\u00a0And you will self-sabotage yourself. Then the second part, to believe that you have the agency to actually cause things to happen. For so long you were the recipients of whatever was given to you. And to now be faced here with extra money and go, \u201cWe can make a choice,\u201d I can see that it\u2019s paralyzing to you.<\/p>\n<p>[00:52:51]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:52:52]\u00a0<strong>Ramit:<\/strong>\u00a0I want to acknowledge that I understand why it\u2019s so scary. Again, for the first time ever, you can see a mile down the road, but I also need you to keep moving. That\u2019s the key. That\u2019s the mindset I need you to adopt. I think that we need to talk about the numbers of where you can go, because right now, there\u2019s so many infinite number of decisions you could make, and you\u2019re just like, \u201cWhat do we do? For the first time we have money, we don\u2019t know how to decide these things.\u201d Okay.<\/p>\n<p>[00:53:24]\u00a0One thing is we need to focus on what\u2019s most urgent. So 50 years old, you\u2019re going to want to retire at some point. And for the first time, you\u2019re realizing, oh my God, it\u2019s possible. Have you calculated how much money you will have in retirement?<\/p>\n<p>[00:53:37]\u00a0<strong>Don:<\/strong>\u00a0I did. If we put away 5,000 or 6,000 a month from now until I\u2019m 67 at 7% that\u2019ll put us right around $2 million.<\/p>\n<p>[00:53:49]\u00a0<strong>Ramit:<\/strong>\u00a0What? Good job. Round of applause. Coming from $11,043 at age 50 to having $2 million. At what age did you say?<\/p>\n<p>[00:54:01]\u00a0<strong>Don:<\/strong>\u00a067.<\/p>\n<p>[00:54:03]\u00a0<strong>Ramit:<\/strong>\u00a0Damn. So what are you telling America, Don? Hold on, let me get my mic. Tell them, Don. What does everybody need to do to go from zero to $2 million in, what was it, 17 years? How much do they need to make, Don? Tell them.<\/p>\n<p>[00:54:20]\u00a0<strong>Don:<\/strong>\u00a0$258,000.<\/p>\n<p>[00:54:23]\u00a0<strong>Ramit:<\/strong>\u00a0People are going to get so mad at me right now.<\/p>\n<p>[00:54:27]\u00a0<strong>Don:<\/strong>\u00a0And me. That\u2019s fine.<\/p>\n<p>[00:54:29]\u00a0<strong>Ramit:<\/strong>\u00a0Guys, hey, America. Don\u2019t get mad at my guests. It\u2019s not their fault. That was my joke. I set that one up. You do not have to make $258,000 a year. But what I do love about that example is it shows that a high income solves a lot of financial problems.<\/p>\n<p>[00:54:48]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:54:49]\u00a0<strong>Ramit:<\/strong>\u00a0The only way that a couple who\u2019s roughly 50 years old with basically nothing invested could have a very comfortable retirement, the only way is they have a very high income and carefully managed expenses. There is no other. The only other ways would be to extend retirement, probably into their 70s, and to decrease the amount spent in that retirement. In your case, amazing calculation, Don. You do have the possibility of having pretty healthy retirement at 2 million bucks, plus Social Security, etc.<\/p>\n<p>[00:55:30]\u00a0<strong>Tana:<\/strong>\u00a0I was wondering if that calculation was based on doing that now,\u00a0because\u00a0we\u2019re not putting that much money in\u00a0now. What would we have to do to catch up if we start a year from now?<\/p>\n<p>[00:55:41]\u00a0<strong>Ramit:<\/strong>\u00a0I want you to remove the catch up concept from your head. You\u2019re not going to catch up with what you would\u2019ve done if you started investing at age 22. Why are we thinking of that? It makes no sense. You can decide right now we have roughly 4,000 bucks a month extra.<\/p>\n<p>[00:56:01]\u00a0We could put 3,000 towards debt and 1,000 a month towards retirement. Let\u2019s play it out. Let\u2019s run the calculation, and let\u2019s decide, but let\u2019s not use the word catch up because when people use catch up, it\u2019s always looking backwards. It always makes them feel bad, and it always makes them do really destructive things with their money.<\/p>\n<p>[00:56:21]\u00a0<strong>Tana:<\/strong>\u00a0Mm.<\/p>\n<p>[00:56:22]\u00a0<strong>Ramit:<\/strong>\u00a0Personally, I always like to be investing something. 500 bucks a month, a hundred bucks a month if that\u2019s what you can. Just the habit. And that way the factory is already moving, and I can just turn the speed up. It\u2019s easier to go from 100 to 5,000 than 0 to 100. Look, there\u2019s no right or wrong answer for this because while time matters a lot to you, in the grand scheme, it\u2019s one year.<\/p>\n<p>[00:57:01]\u00a0What\u2019s more important is to get your habits correct. That matters a lot. I\u2019ll just tell you what I would personally do. I can\u2019t tell you what you should do, but I\u2019ll tell you what I would do.\u00a0If it were me and I had your CSP, which I\u2019m\u00a0going to\u00a0put up on screen right now, this is what I would do.<\/p>\n<p>[00:57:17]\u00a0<strong>Tana:<\/strong>\u00a0Okay.<\/p>\n<p>[00:57:19]\u00a0<strong>Ramit:<\/strong>\u00a0I would take this number, your\u00a0guilt-free\u00a0spending, $2,792. Let\u2019s just say that that\u2019s 3,000 bucks, just for easy math.\u00a0I would cut that thing in half because I guarantee you\u2019ve been living on less than that for a long time, right?<\/p>\n<p>[00:57:36]\u00a0<strong>Don:<\/strong>\u00a0Oh,\u00a0yes.<\/p>\n<p>[00:57:37]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Way less. Remember that movie where everybody got\u00a0trapped in the Andes Mountains and they started eating each other? They brought\u00a0them\u00a0back to the hospital,\u00a0and they were very careful not to overfeed them immediately because it\u2019s really dangerous. That\u2019s the same thing here.<\/p>\n<p>[00:57:56]\u00a0You don\u2019t want to go from spending $50 a month to $2,792 a month. You want to go up very gradually and build the skill of what it\u2019s like to spend.\u00a0Same thing I would tell athletes or lottery winners. So if it were me, I would take half of that,\u00a0and I\u2019ll put that right into savings.<\/p>\n<p>[00:58:14]\u00a0In my opinion, savings is more important to you right now than investing 12 months ahead\u00a0because\u00a0you\u2019re already investing a bit,\u00a0and you\u2019re\u00a0going to\u00a0start investing a lot of money soon.\u00a0But you have no savings,\u00a0and that\u2019s a problem.<\/p>\n<p>[Narration]<\/p>\n<p>[00:58:29]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, why would I not immediately put all my money towards high interest credit card debt? In most cases I would.\u00a0But Don and Tana have a unique situation. They never built the skills of saving and investing. But those are the skills that are absolutely critical right now.\u00a0In my opinion, even if it means paying slightly more in high interest debt.<\/p>\n<p>[00:58:51]\u00a0See, the goal here isn\u2019t just to pay off the debt. It\u2019s for them to build the habits of saving and investing and starting to gradually think further ahead. It\u2019s like cultivating a garden. You don\u2019t just aggressively water your plants once a year and then expect them to be okay. You have to nurture them over time, which allows them to develop strong roots.\u00a0That is what I want for Don and Tana.<\/p>\n<p>[00:59:14]\u00a0You may disagree with my suggestion. You might choose to pay off all your credit card debt all at once. Fine. That\u2019s not what I would do in their situation. Let\u2019s get back to the conversation.<\/p>\n<p>[Interview]<\/p>\n<p>[00:59:25]\u00a0<strong>Tana:<\/strong>\u00a0If a surprise repair comes out up, is that from the carefree spending,\u00a0or should that come\u00a0out of\u00a0savings?<\/p>\n<p>[00:59:32]\u00a0<strong>Ramit:<\/strong>\u00a0So let me put it very bluntly. Couples that make $258,000, they don\u2019t have surprise expenses on their 1,125-dollar\u00a0a month house that they haven\u2019t planned for. Now,\u00a0you\u2019ll get there. You\u2019re not there right now. I understand that you have an old house and things have come up. I\u2019m trying to show you what it should be like and what it is\u00a0going to\u00a0be like in about two years.<\/p>\n<p>[00:59:58]\u00a0So here I am in a relationship where I make 258 to $300,000 a year. I know a lot of stuff\u2019s\u00a0going to\u00a0go wrong. I\u2019ve already anticipated it. I\u2019ve put money aside. I have a specific subs savings account called this damn house.\u00a0And every month, how much am I putting in there?\u00a0Tell me.\u00a0Forget about all these numbers.\u00a0Just in general, how much should I be putting in that house fund?<\/p>\n<p>[01:00:23]\u00a0<strong>Don:<\/strong>\u00a0$500.<\/p>\n<p>[01:00:24]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, something like that. Typically they say one to 3% of the value of a house per year for maintenance. Now, your house might be older, blah, blah, blah. But that includes things that break.\u00a0That includes the roof that will break 11 years from now.<\/p>\n<p>[01:00:41]\u00a0So when that happens, you will have the money saved up. That\u2019s how we think. We start being proactive. Now, you can\u2019t save 500 bucks a month right now for your house because you have other things it needs to go towards, but you can save how much?<\/p>\n<p>[01:00:57]\u00a0<strong>Tana:<\/strong>\u00a0200.<\/p>\n<p>[01:00:59]\u00a0<strong>Ramit:<\/strong>\u00a0Sure. 200 bucks. Put it aside. Create a house fund. Get the factory moving. So you have a\u2013\u00a0I love vivid names for accounts. This damn house and whatever you want to call it. And it\u2019s 200 bucks a month.\u00a0And if something goes wrong, that\u2019s where you look. But you really need to be aware. If you have 500 bucks in that account and you have a\u00a01,00-dollar problem, what are you\u00a0going to\u00a0do?<\/p>\n<p>[01:01:30]\u00a0<strong>Don:<\/strong>\u00a0Take it out of our\u00a0carefree spending.<\/p>\n<p>[01:01:31]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that\u2019s correct. It comes\u00a0out of\u00a0guilt-free\u00a0spending. It does not come out of an emergency fund. Nothing ever comes out of an emergency fund unless it\u2019s an emergency. That\u2019s exactly how you do it. Beautiful.\u00a0You\u2019re\u00a0going to\u00a0pay off\u00a0your debt in a year. Let\u2019s talk about what\u2019s going to happen once that\u2019s paid off. You have options. You can split it. You could invest all of it.<\/p>\n<p>[01:01:54]\u00a0I\u2019ll tell you what I would do.\u00a0If I had 4,000 bucks extra per month, the way I\u2019m thinking about this is, how much do I need to retire at age 67? How much is going to be comfortable for me? And I know you\u2019ve already factored in your social security and those things, so I\u2019m just like, how much do we need at age 67? I\u2019m also prioritizing a savings account. I want to get to six months of an emergency fund, six months. And I say that because you\u2019ve had some tough times, caused a lot of problems when you had unemployment.<\/p>\n<p>[01:02:26]\u00a0<strong>Tana:<\/strong>\u00a0There\u2019s a part of me that\u2019s like, we\u2019re finally making money. I want to enjoy it. And so there\u2019s things that don\u2019t necessarily need repaired around the house, but I would like to improve.<\/p>\n<p>[01:02:37]\u00a0<strong>Ramit:<\/strong>\u00a0Wait, what? Hold on. Swear to God, I could talk to people in any situation, and no matter what, no matter what, we\u2019re always going to end up in the same place. Ramit, I got to renovate my house.<\/p>\n<p>[01:02:50]\u00a0<strong>Tana:<\/strong>\u00a0Well, I\u2019ll add, we also have taken one vacation in our entire marriage.<\/p>\n<p>[01:02:56]\u00a0<strong>Ramit:<\/strong>\u00a0Listen, if you want to renovate your house, we can make that happen. But this is one of the clues that I see on your CSP, which is sloppiness. A lot of things that have been mushed together, and they shouldn\u2019t.<\/p>\n<p>[01:03:10]\u00a0So when I have an emergency fund, that is an emergency fund. I don\u2019t touch that. When I have guilt-free spending, that is guilt-free spending. You want to renovate? Love it, love it. I support it. If you can afford it, which means in your case you would probably put money aside, once you have the money, you spend it. Simple as that. But you don\u2019t go into debt for it.<\/p>\n<p>[01:03:35]\u00a0<strong>Tana:<\/strong>\u00a0Yeah, we\u2019re done doing that.<\/p>\n<p>[01:03:36]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. It sounds simple, right? Is there any hesitation?<\/p>\n<p>[01:03:40]\u00a0<strong>Tana:<\/strong>\u00a0I feel muddied when it comes to the guilt-free because things like house repairs, additional medical bills, and stuff like that, is coming out of that.<\/p>\n<p>[01:03:50]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s because you don\u2019t have your account set up to properly reflect your priorities. So you are constantly feeling behind because you have been financially behind for the last 30 years. But I have to tell you that it would be a tragedy to go the rest of your life feeling behind without actually changing your account structure and then changing your psychology of money.<\/p>\n<p>[01:04:19]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:04:20]\u00a0<strong>Ramit:<\/strong>\u00a0We need clear lines of demarcation when it comes to spending. Do you know how I think about my money when it comes to this guilt-free stuff? Every time I go out to spend money on something that I like, it\u2019s guilt-free for me. I\u2019m not thinking about, \u201cOh my God, I could be doing this. I could be doing that.\u201d Because I already handled all that stuff.<\/p>\n<p>[01:04:38]\u00a0The fixed costs are already handled. They\u2019re automatically being paid every month. Savings, automatically being done. Investments, automatically being done, and I already know how much I need, and I\u2019ve built a healthy buffer, all that stuff. So what\u2019s left is meant to be spent. Have you internalized that with your money?<\/p>\n<p>[01:04:58]\u00a0<strong>Tana:<\/strong>\u00a0No.<\/p>\n<p>[01:04:59]\u00a0<strong>Don:<\/strong>\u00a0Definitely not.<\/p>\n<p>[01:05:00]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So we need to do that.\u00a0Let\u2019s look at the numbers again\u00a0because\u00a0there\u2019s one big thing we haven\u2019t talked about.<\/p>\n<p>[01:05:06]\u00a0<strong>Tana:<\/strong>\u00a0Okay.<\/p>\n<p>[01:05:07]\u00a0<strong>Ramit:<\/strong>\u00a0Don, you mentioned that you might make up to $60,000 more than we see on the CSP.<\/p>\n<p>[01:05:14]\u00a0<strong>Don:<\/strong>\u00a0Correct.<\/p>\n<p>[01:05:15]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What are y\u2019all going to do with that money?<\/p>\n<p>[01:05:16]\u00a0<strong>Don:<\/strong>\u00a0We\u2019ve had that conversation about, do we split half of it and pay additional money towards debt? Then take the other half and figure out investments, savings, guilt-free.<\/p>\n<p>[01:05:31]\u00a0<strong>Ramit:<\/strong>\u00a0I would like to hear the two of you have this conversation about what to do with any unexpected income.<\/p>\n<p>[01:05:38]\u00a0<strong>Don:<\/strong>\u00a0What do you want to do? Would it make us feel better to put it in investments?<\/p>\n<p>[01:05:48]\u00a0<strong>Tana:<\/strong>\u00a0I see us splitting up three different percentages, so savings, retirement, and carefree spending.<\/p>\n<p>[01:05:57]\u00a0<strong>Don:<\/strong>\u00a0It\u2019s guilt-free. We keep saying carefree. It\u2019s guilt-free.<\/p>\n<p>[01:06:00]\u00a0<strong>Ramit:<\/strong>\u00a0You all have an aversion to the word guilt because of the religious stuff? What is that?<\/p>\n<p>[01:06:03]\u00a0<strong>Don:<\/strong>\u00a0Probably. That\u2019s what it is.<\/p>\n<p>[01:06:07]\u00a0<strong>Tana:<\/strong>\u00a0Guilt-free spending.<\/p>\n<p>[01:06:08]\u00a0<strong>Ramit:<\/strong>\u00a0Adapt it. Adapt it. Go on.<\/p>\n<p>[01:06:10]\u00a0<strong>Tana:<\/strong>\u00a0Maybe the guilt-free part includes some of these bigger ticket things we want to do. Maybe we add an extra chunk to savings for a vacation, or we add an extra chunk to savings for things we want to do around the house, or whatever.<\/p>\n<p>[01:06:27]\u00a0<strong>Don:<\/strong>\u00a0Tana, I like the idea of us being super aggressive. We do 80% into investments and 20% into savings. How does that sound to you? What do you want to do?<\/p>\n<p>[01:06:38]\u00a0<strong>Tana:<\/strong>\u00a0There is a part of me that wants to have some portion of it, even if it\u2019s small, that\u2019s like, \u201cOh, here\u2019s a little extra.\u201d So we can get the things that we want, that we can do the things that we want.<\/p>\n<p>[01:06:53]\u00a0<strong>Ramit:<\/strong>\u00a0Say the number.<\/p>\n<p>[01:06:54]\u00a0<strong>Tana:<\/strong>\u00a060, retirement; 20 savings; 20\u2013<\/p>\n<p>[01:06:56]\u00a0<strong>Don:<\/strong>\u00a0Awesome, let\u2019s do it. Let\u2019s do it. 60-20-20, 6 months. We\u2019ll review, and maybe we\u2019ll see then that we can do more in one place over the other. But I love the idea of returning six months.<\/p>\n<p>[01:07:10]\u00a0<strong>Tana:<\/strong>\u00a0Yeah. I like that too. Yeah.<\/p>\n<p>[01:07:11]\u00a0<strong>Ramit:<\/strong>\u00a0Great. Take a round of applause. That was very decisive. Amazing. One thing that I think is part of your core values, who you are in 2.0, is we are decisive. We make decisions. We make them informed, we make them educated, but we make decisions. And you just did a great job of that. That was awesome. 60-20-20. I love it. I\u2019m really proud of both of you for just that last exercise. That was really cool.<\/p>\n<p>[01:07:43]\u00a0<strong>Tana:<\/strong>\u00a0Thank you.<\/p>\n<p>[01:07:44]\u00a0<strong>Ramit:<\/strong>\u00a0How\u2019d you feel about that?<\/p>\n<p>[01:07:46]\u00a0<strong>Don:<\/strong>\u00a0I feel good. I feel like there\u2019s clarity. I feel like we\u2019ve hemmed and hawed around the extra income, and what are we going to do. What are we going to do? And even if it\u2019s something we change in six months, I\u2019m so glad that we have something. We have a number.<\/p>\n<p>[01:08:03]\u00a0<strong>Tana:<\/strong>\u00a0I just feel bad that I have been hawing.<\/p>\n<p>[01:08:08]\u00a0<strong>Ramit:<\/strong>\u00a0I understand that temptation is like, as you start to become more adept with your money, just having money, first of all, building these decisive plans, it\u2019s going to be very tempting for you to feel bad, like, why didn\u2019t we do this 30 years ago? We should have done this. Like, oh my God. But I think that many people who have felt bad about money for so long, when they have the opportunity to feel good, they go back to another permutation of feeling bad. Do you know why?<\/p>\n<p>[01:08:39]\u00a0<strong>Don:<\/strong>\u00a0Comfortable.<\/p>\n<p>[01:08:40]\u00a0<strong>Tana:<\/strong>\u00a0Yeah, I was going to say it\u2019s what you\u2019re used to.<\/p>\n<p>[01:08:42]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s comfort. It\u2019s the same reason many people stay in poor relationships, one after another. I\u2019ve known feeling bad. At least I know how to deal with that. What was that thing you said, Tana? When\u2019s the next shoe going to drop? 2.0 says, \u201cWe work hard. We deserve to have money. We spend time talking about our money regularly. We expect our family to have a healthy savings account, healthy investment account to be able to go out and eat every so often and get something nice for the house. We expect it. We deserve it if we work hard and are lucky, fortunate, and put the time in, all those things.\u201d<\/p>\n<p>[01:09:26]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:09:26]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s going to take a while, but I\u2019m just trying to paint a picture of what it will look like.<\/p>\n<p>[01:09:31]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:09:32]\u00a0<strong>Ramit:<\/strong>\u00a0On the guilt-free spending side, one thing I might suggest to each of you is you have, let\u2019s just say it\u2019s $100 a month guilt-free spending. I\u2019m making up a number. It\u2019s obviously more than that. But 20 bucks of that might go towards Tana, 20 bucks towards Don, and then 60 bucks towards the two of you. Something to consider.<\/p>\n<p>[01:09:54]\u00a0You probably want some sort of allocation in there, and that way, if Tana\u2019s like, \u201cI really want these beautiful things for the bedroom,\u201d fantastic. Guilt-free spending. And you two should decide, is it the family, or is it Tana\u2019s? But I also think it\u2019s important to have some joint guilt-free money that the two of you want to use it with your family. That\u2019s for you.<\/p>\n<p>[01:10:19]\u00a0<strong>Tana:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:10:20]\u00a0<strong>Ramit:<\/strong>\u00a0There\u2019s one other thing I want to talk about, which is, Don, you mentioned that you feel the need to work all the time, and if you take a day off, you\u2019re losing potentially 800 bucks a day, 1,000 bucks a day, something like that. What are your thoughts on that, in light of all the things we\u2019ve talked about?<\/p>\n<p>[01:10:37]\u00a0<strong>Don:<\/strong>\u00a0Right now I would like to imagine that I have a better perspective on it and Don 2.0 is not going to have those same issues. I think the area that is still complicated in my brain for mathematical reasons is that then it makes me want to reduce the amount that I count on every month to give room for a day off, to give room for a week vacation, or something, and possibly adjust our budget to make that feel like that is more approachable.<\/p>\n<p>[01:11:10]\u00a0Whereas right now, I feel like the budget we have, I\u2019m pretty much locked into putting in at least a chunk of hours every single day. I would like to be able to take off a Friday and not spend all weekend sweating about, man, I shouldn\u2019t have taken off Friday.<\/p>\n<p>[01:11:27]\u00a0<strong>Ramit:<\/strong>\u00a0Numbers wise, you can make this model work on $258,000 a year. You don\u2019t need even the extra income. That\u2019s all gravy.<\/p>\n<p>[01:11:40]\u00a0<strong>Don:<\/strong>\u00a0Correct.<\/p>\n<p>[01:11:41]\u00a0<strong>Ramit:<\/strong>\u00a0So doesn\u2019t that answer your question right there? You can take a Friday off right now.<\/p>\n<p>[01:11:46]\u00a0<strong>Don:<\/strong>\u00a0Yeah, I think it does all come down to psychology. The idea of me sitting on my front porch and reading a book all afternoon on a Friday instead of earning money, it\u2019s hard to switch to say that was a worthwhile spend of my afternoon.<\/p>\n<p>[01:12:03]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Well, fortunately, you\u2019re talking to the world\u2019s foremost expert in leisure. Me. I [Bleep] love it. And I\u2019m really good at it. And we\u2019re going to talk about this because it\u2019s actually very important. Numbers are numbers. Great. We talked about that. But I want to emphasize something very important to you. One of the values you need to really start to internalize is, I am running a marathon. And if there\u2019s one thing that you cannot do in this entire model we talked about, you know what it is?<\/p>\n<p>[01:12:39]\u00a0<strong>Don:<\/strong>\u00a0Die.<\/p>\n<p>[01:12:40]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Basically, you cannot lose your job.<\/p>\n<p>[Narration]<\/p>\n<p>[01:12:44]\u00a0<strong>Ramit:<\/strong>\u00a0Let me jump in here to make this point crystal clear. Don and Tana\u2019s aggressive retirement plan will only work if Don keeps his job. He cannot lose the job. If they did not have this high income,\u00a0this conversation would not be nearly as positive. In fact, they would be in serious trouble,\u00a0candidly, with no way out. They would be in serious debt. They would be unable to pay it off. They would have no real retirement savings, and their future would be very bleak.<\/p>\n<p>[01:13:14]\u00a0Thankfully,\u00a0they have a high income now, and that is why it is so important to protect it. Now, I don\u2019t say this to discourage anyone from starting to invest later in life. Of course, the best time to start investing is your\u00a020s. It\u2019s also true that the second-best time to start investing is right now.\u00a0In this case, Don and Tana are going to be financially okay.\u00a0In fact, better than okay.<\/p>\n<p>[01:13:34] And if you\u2019re in the same situation, you can do it too. What I want you to understand is that the longer you wait, the harder it gets.\u00a0And it\u2019s not just a little harder.\u00a0It gets really, really hard. So start early if you can, and focus on building the skill of increasing your income and set up automatic investments.\u00a0I teach all of these things in exhaustive detail on the programs on my website. Let me talk to Don about his money psychology now.<\/p>\n<p>[Interview]<\/p>\n<p>[01:14:05]\u00a0<strong>Don:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:14:07]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re like an athlete. You cannot get injured. So what do athletes do?<\/p>\n<p>[01:14:13]\u00a0<strong>Don:<\/strong>\u00a0Recover.<\/p>\n<p>[01:14:14]\u00a0<strong>Ramit:<\/strong>\u00a0Exactly. That\u2019s the way you have to think about it. So if a Friday reading on the porch is what provides you recovery, you actually have to prioritize it, fight for it, and make it happen. This is the same reason. I joke about leisure, but I actually take it very seriously.<\/p>\n<p>[01:14:35]\u00a0I happily watch TV for hours at a time, and to anyone else, they\u2019re like, \u201cWhat the hell\u2019s wrong with this guy?\u201d But the way I mentally constructed it is I\u2019m rejuvenating, I\u2019m recuperating, recovering, and when the time calls for it, I\u2019m ready.<\/p>\n<p>[01:14:54]\u00a0When Netflix called and it was get on a plane to all these different cities, you better look good. You better be ready to go show up on time at grueling hours for six, seven days a week. I\u2019m ready. And that\u2019s how I want you to think. As an athlete, recovery is a priority. Does that change anything for you in terms of time?<\/p>\n<p>[01:15:18]\u00a0<strong>Don:<\/strong>\u00a0It\u2019s interesting because when this financial shift happened, we did things such as get a cleaner, to buy time back. That\u2019s been helping me think about if, if I\u2019m willing to pay for a cleaner, am I willing to pay for my afternoon off, basically? But that would be my first step. That\u2019d be my baby step to embracing that leisure.<\/p>\n<p>[01:15:42]\u00a0<strong>Ramit:<\/strong>\u00a0I like that. I really like the baby steps you\u2019re taking. I think buying back time, that\u2019s a great, great idea. I\u2019m glad you did it. I want to paint a vision for you that, eventually, your leisure time is not a transactional value to be calculated. There is value in leisure for the sake of leisure. We are human beings who need enjoyment and fulfillment. And ironically, the money guy is here telling you, \u201cIt\u2019s not all about money.\u201d<\/p>\n<p>[01:16:13]\u00a0You know that. You know that because you lived it for so many years. But I actually need you to bring that back and realize, my enjoyment, whether it\u2019s with my wife, my son, my dog, or just walking around somewhere, it\u2019s worthwhile. I deserve it. Part of Don and Tana 2.0 is that if you achieve all the things we talked about, you\u2019re actually not behind.<\/p>\n<p>[01:16:40]\u00a0<strong>Don:<\/strong>\u00a0You can preach Ramit.<\/p>\n<p>[01:16:43]\u00a0<strong>Ramit:<\/strong>\u00a0Now that is high praise. I appreciate that.<\/p>\n<p>[Narration ]<\/p>\n<p>[01:16:49]\u00a0Thank you to Don and Tana for sharing their story with us. And I\u00a0want to\u00a0remind you, it can be really hard to share these intimate details of your finances, especially when they don\u2019t seem so great on paper.\u00a0But sharing those stories is what allows all of us to learn from other couples. So big thanks to Don and Tana and to all the guests who come on the show every single week and take us into your\u00a0Rich\u00a0Lives.\u00a0Let\u2019s check in and see how things are going. First,\u00a0Don\u2019s follow-up<\/p>\n<p>[01:17:18]\u00a0<strong>Don:<\/strong>\u00a0Tana and I have had some amazing conversations. We actually have some excitement around our future. We still feel like there\u2019s a lot of work to do. It\u2019s going to\u00a0take a lot of effort,\u00a0and it\u2019s\u00a0going to\u00a0depend on us being consistent.\u00a0But it is doable and manageable in that we actually really have a good shot at retiring.<\/p>\n<p>[01:17:40]\u00a0We thought through the ways that we were\u00a0going to\u00a0split up the additional income that was above and beyond what we\u00a0were accounting for.\u00a0We have a good plan now, which is nice.\u00a0We were just paralyzed by some unknowns that just really took a little bit of nudging. And once the nudging happened, it opened up the gates for us to make some really solid decisions.\u00a0So thank you for everything. We appreciate you. Thank you so much.<\/p>\n<p>[01:18:03]\u00a0<strong>Ramit:<\/strong>\u00a0And now\u00a0Tana\u2019s follow-up.<\/p>\n<p>[01:18:05]\u00a0<strong>Tana:<\/strong>\u00a0With our plan, we are actually in good shape for retirement, which was a relief to hear, and we should no longer view ourselves as catching up. I think it\u2019ll be a little difficult to fully overcome that mindset after years of struggling, but we are going to do it.\u00a0We\u2019re committed to doing it. It\u2019s\u00a0going to\u00a0happen. We realized that our guilt-free spending category was really a catch-all for anything that wasn\u2019t in fixed costs.\u00a0So\u00a0we created a 5% buffer in our budget for small repairs, maintenance, extra medical, small, unexpected, that kind of thing. And then we made our\u00a0guilt-free\u00a0spending category a mix of giving money away plus purchases that are truly\u00a0guilt-free.<\/p>\n<p>[01:18:49]\u00a0In\u00a0addition, we set aside $500 a month for our long-term emergency savings, and then any additional income either of us earns will be split 60-40 between retirement and long-term emergency.\u00a0And then we plan on reevaluating in January. So thank you so much for your help.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Don is 50, Tana is 48, and they\u2019ve struggled to make ends meet their entire adult lives. They have a lot of debt, they\u2019ve never really saved or thought they\u2019d be able to retire\u2026 but their income has recently DOUBLED and they\u2019re wondering how to manage the extra money. Throughout this conversation, as Don and [&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-118858","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\/118858","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=118858"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118858\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}