{"id":118910,"date":"2024-05-14T12:33:50","date_gmt":"2024-05-14T16:33:50","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118910"},"modified":"2026-02-23T15:30:00","modified_gmt":"2026-02-23T19:30:00","slug":"156-paul-morgan","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/156-paul-morgan\/","title":{"rendered":"Episode 156. &#8220;We have 2 kids, 3 cars&#8230;but only 1 month of savings&#8221; (Part 2)"},"content":{"rendered":"<p><iframe title=\"\u201cWe have 3 cars, 2 kids...and only 1 month of savings\u201d\" src=\"https:\/\/www.youtube.com\/embed\/a7D19vPKls8\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/episode\/0T5WIwr1UUZoAyZZASIzQx?utm_source=generator\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>In the second half of this live-recorded conversation with Paul and Morgan, 37 and 33, we dig deeper into their Conscious Spending Plan to uncover three cars (for two adults), sporadic debt management, high pet care costs, hidden student loans, and what seems like no way out from under it all.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>Hatch | A million things don\u2019t want you to sleep, Hatch does. Get $20 off a Hatch Restore at\u00a0<strong><a href=\"https:\/\/hatch.co\/ramit\">https:\/\/hatch.co\/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<strong><a href=\"https:\/\/rocketmoney.com\/ramit\">https:\/\/rocketmoney.com\/ramit<\/a><\/strong>.<\/p>\n<p>ZocDoc | Download the ZocDoc app for FREE\u00a0 at\u00a0<strong><a href=\"https:\/\/zocdoc.com\/ramit\">https:\/\/zocdoc.com\/ramit<\/a><\/strong>\u00a0then find and book a top-rated doctor today.<\/p>\n<p>Masterclass | For unlimited access to every class and 15% off an annual membership, go to\u00a0<strong><a href=\"https:\/\/masterclass.com\/ramit\">https:\/\/masterclass.com\/ramit<\/a><\/strong>.<\/p>\n<p>Fabric by Gerber Life | Protect your family today with Fabric by Gerber Life. Apply today in just 10 minutes at\u00a0<strong><a href=\"https:\/\/meetfabric.com\/ramit\">https:\/\/meetfabric.com\/ramit<\/a><\/strong>.<\/p>\n<h2><strong>Links mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.iwillteachyoutoberich.com\/155-paul-morgan\/\">\u201cWe have $22k in cc debt\u2014but I want to renovate the house\u201d (Part 1)<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p>[00:00:00]\u00a0<strong>Ramit:<\/strong>\u00a0What happens if it doesn\u2019t last?<\/p>\n<p>[00:00:07]\u00a0<strong>Paul:<\/strong>\u00a0We\u2019d fall more into debt or have a bigger issue.<\/p>\n<p>[00:00:12]\u00a0<strong>Ramit:<\/strong>\u00a0And then?<\/p>\n<p>[00:00:14]\u00a0<strong>Paul:<\/strong>\u00a0Then have to make emergency drastic decisions.<\/p>\n<p>[00:00:19]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, it affects our family.<\/p>\n<p>[00:00:20]\u00a0<strong>Paul:<\/strong>\u00a0It affects our family.<\/p>\n<p>[00:00:21]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:00:21]\u00a0<strong>Ramit:<\/strong>\u00a0Like what?<\/p>\n<p>[00:00:22]\u00a0<strong>Paul:<\/strong>\u00a0I guess selling the house or foreclosing on your house, not having a place, bankruptcy, I guess. I don\u2019t know.<\/p>\n<p>[00:00:31]\u00a0<strong>Morgan:<\/strong>\u00a0Our lifestyle would change drastically. I can\u2019t carry the weight of this anymore, and our relationship would probably crumble apart. I want big changes.<\/p>\n<p>[00:00:44]\u00a0<strong>Ramit:<\/strong>\u00a0Tell him.<\/p>\n<p>[00:00:45]\u00a0<strong>Morgan:<\/strong>\u00a0I want big changes.<\/p>\n<p>[00:00:46]\u00a0<strong>Paul:<\/strong>\u00a0Okay. So something\u2013<\/p>\n<p>[00:00:49]\u00a0<strong>Morgan:<\/strong>\u00a0I don\u2019t want it to be on me.<\/p>\n<p>[00:00:51]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[Narration]<\/p>\n<p>[00:00:52]\u00a0<strong>Ramit:<\/strong>\u00a0Welcome back to my conversation with Paul and Morgan. Paul\u2019s 37. Morgan is 33. This is part two of our conversation. Last week we learned that Morgan is the chaser and Paul is the avoider when it comes to money. Interestingly, Paul also constantly reassures Morgan everything\u2019s going to be okay without ever really knowing how their finances work.<\/p>\n<p>[00:01:15]\u00a0Now, I want to point something out about today\u2019s conversation. It is striking that we\u2019re about to spend so much time talking about how they need three cars, but when I finally actually look at the numbers, it becomes clear how severe their situation really is. What do you think the psychology is behind debating some random purchase for hours when your financial house is on fire?<\/p>\n<p>[00:01:40]\u00a0Well, that\u2019s a very common thing. And we\u2019re going to explore that in today\u2019s conversation. If you\u2019re listening, check out the YouTube video, especially today, because we shot this in person in New York. Now to today\u2019s conversation, I started by asking them to imagine a different dynamic, one where they\u2019re not chasing and avoiding each other.<\/p>\n<p>[Interview]<\/p>\n<p>[00:02:00]\u00a0<strong>Ramit:<\/strong>\u00a0What would it look like?<\/p>\n<p>[00:02:01]\u00a0<strong>Morgan:<\/strong>\u00a0I think Paul and I both having more discussions and having a clear idea of and being more intentional about what we\u2019re spending and what we\u2019re buying.<\/p>\n<p>[00:02:14]\u00a0<strong>Paul:<\/strong>\u00a0Both talking things out and having goals, what we want and how we\u2019re going to get there.<\/p>\n<p>[00:02:20]\u00a0<strong>Ramit:<\/strong>\u00a0What would it look like and feel like to you if you actually felt good about money?<\/p>\n<p>[00:02:26]\u00a0<strong>Morgan:<\/strong>\u00a0Feeling like I didn\u2019t have to carry the weight of all of it.<\/p>\n<p>[00:02:29]\u00a0<strong>Ramit:<\/strong>\u00a0Like you do now.<\/p>\n<p>[00:02:30]\u00a0<strong>Morgan:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:02:31]\u00a0<strong>Ramit:<\/strong>\u00a0And that weight you\u2019re carrying, where do you feel it?<\/p>\n<p>[00:02:34]\u00a0<strong>Morgan:<\/strong>\u00a0In my chest, in my back, in my stomach.<\/p>\n<p>[00:02:39]\u00a0<strong>Ramit:<\/strong>\u00a0And you feel that weight because what?<\/p>\n<p>[00:02:43]\u00a0<strong>Morgan:<\/strong>\u00a0Because it feels like it\u2019s on me to restrict. Or I could say, all right, whatever, let\u2019s go to Florida. Let\u2019s do it. And then we have a lot of fun. Then in the back of my head, okay, now we\u2019re in this much debt. I don\u2019t even know what it is because I can\u2019t see the credit card, and we\u2019ll just figure it out.<\/p>\n<p>[00:03:00]\u00a0<strong>Ramit:<\/strong>\u00a0Are you both carrying the weight equally?<\/p>\n<p>[00:03:02]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:03:03]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re carrying more of it?<\/p>\n<p>[00:03:04]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:03:04]\u00a0<strong>Ramit:<\/strong>\u00a0All of it?<\/p>\n<p>[00:03:06]\u00a0<strong>Morgan:<\/strong>\u00a0Probably.<\/p>\n<p>[00:03:10]\u00a0<strong>Ramit:<\/strong>\u00a0That can\u2019t feel good.<\/p>\n<p>[00:03:11]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:03:13]\u00a0<strong>Ramit:<\/strong>\u00a0You carry all the weight of parenting?<\/p>\n<p>[00:03:15]\u00a0<strong>Morgan:<\/strong>\u00a0Not all of it. I carry the emotional weight, I think. Yeah.<\/p>\n<p>[00:03:20]\u00a0<strong>Ramit:<\/strong>\u00a0You talk about how you spread out the weight of household tasks, parenting, things like that?<\/p>\n<p>[00:03:27]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, I think we\u2019ve gotten\u2013<\/p>\n<p>[00:03:28]\u00a0<strong>Ramit:<\/strong>\u00a0Wow, both nods. Look at that.<\/p>\n<p>[00:03:29]\u00a0<strong>Paul:<\/strong>\u00a0Yeah, we\u2013<\/p>\n<p>[00:03:31]\u00a0<strong>Ramit:<\/strong>\u00a0Talk about it a lot.<\/p>\n<p>[00:03:31]\u00a0<strong>Paul:<\/strong>\u00a0We do. We have a lot of coordination.<\/p>\n<p>[00:03:33]\u00a0<strong>Ramit:<\/strong>\u00a0Wow.<\/p>\n<p>[00:03:34]\u00a0<strong>Paul:<\/strong>\u00a0Two kids. Morgan has to be at work at 7:30, the kids are out at the door 6:45 AM.<\/p>\n<p>[00:03:41]\u00a0<strong>Ramit:<\/strong>\u00a0Got to do it.<\/p>\n<p>[00:03:42]\u00a0<strong>Paul:<\/strong>\u00a0I am in New York City sometimes 7:00AM. We\u2019re back.<\/p>\n<p>[00:03:47]\u00a0<strong>Ramit:<\/strong>\u00a0And if one of them gets sick, that throws everything off, right?<\/p>\n<p>[00:03:49]\u00a0<strong>Paul:<\/strong>\u00a0Yeah, but we talk about it, and one of us has to take off, and\u2013<\/p>\n<p>[00:03:52]\u00a0<strong>Morgan:<\/strong>\u00a0We\u2019ve gotten\u2013<\/p>\n<p>[00:03:53]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on. How come you just came to life, Paul? That was really cool. The coordination in your nods was in complete unison. What do you think? How come you came to life on that when I asked about do you two coordinate and share the weight with household tasks?<\/p>\n<p>[00:04:11]\u00a0<strong>Paul:<\/strong>\u00a0I think because I\u2019m confident that we have that down.<\/p>\n<p>[00:04:16]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Did y\u2019all just naturally become good parents who share coordination?<\/p>\n<p>[00:04:22]\u00a0<strong>Morgan:<\/strong>\u00a0No, I think we\u2019ve had to have a lot of conversations about it and sharing load and different responses. It\u2019s a lot.<\/p>\n<p>[00:04:31]\u00a0<strong>Paul:<\/strong>\u00a0And making a lot of mistakes, too.<\/p>\n<p>[00:04:34]\u00a0<strong>Morgan:<\/strong>\u00a0Having arguments.<\/p>\n<p>[00:04:35]\u00a0<strong>Paul:<\/strong>\u00a0Having arguments.<\/p>\n<p>[00:04:35]\u00a0<strong>Ramit:<\/strong>\u00a0And adapting and improving.<\/p>\n<p>[00:04:37]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah. And adapting.<\/p>\n<p>[00:04:38]\u00a0<strong>Paul:<\/strong>\u00a0Definitely.<\/p>\n<p>[00:04:39]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm. I wonder what it would be like if you were to apply that to money. What do you think?<\/p>\n<p>[00:04:43]\u00a0<strong>Paul:<\/strong>\u00a0It would be less uncertainty and more maybe logistical or goal-oriented.<\/p>\n<p>[00:04:57]\u00a0<strong>Ramit:<\/strong>\u00a0Talk to me about the specifics just the same way you talk to me about all the parenting specifics that you do. The kids out the house at this time and that and this and that. Tell me the same thing for money. What would it look like?<\/p>\n<p>[00:05:09]\u00a0<strong>Paul:<\/strong>\u00a0Morgan, there\u2019s this much in the account right now. This is going to this. That is going to that. We\u2019re going to have this left over for our vacation. We\u2019re going to have this in savings.<\/p>\n<p>[00:05:18]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. I fucking love that. I\u2019m curious how come you just got very, almost like a caricature. Why? Did it feel cartoonish to you to say that?<\/p>\n<p>[00:05:28]\u00a0<strong>Paul:<\/strong>\u00a0No, I would love to be like that.<\/p>\n<p>[00:05:34]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, I like the way you created that vision. That\u2019s basically right. What do you think, Morgan? What would it look like if the two of you were the same with money as you are with parenting and household tasks?<\/p>\n<p>[00:05:47]\u00a0<strong>Morgan:<\/strong>\u00a0I think we\u2019d have to talk about it a lot more. For us to have gotten to the point where we are now with those tasks, we had to have a lot of hard conversations and really be intentional about divvying it up.<\/p>\n<p>[00:06:00]\u00a0<strong>Ramit:<\/strong>\u00a0Right. Would you only talk about money at 10:00PM at night?<\/p>\n<p>[00:06:05]\u00a0<strong>Morgan:<\/strong>\u00a0No. We\u2019d find time.<\/p>\n<p>[00:06:08]\u00a0<strong>Ramit:<\/strong>\u00a0And would you be the only one bringing it up?<\/p>\n<p>[00:06:11]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:06:13]\u00a0<strong>Ramit:<\/strong>\u00a0What do y\u2019all make of this, this analogy between how you handle your household tasks and how you\u2019re currently handling money? Find that interesting?<\/p>\n<p>[00:06:22]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[Narration]<\/p>\n<p>[00:06:23]\u00a0<strong>Ramit:<\/strong>\u00a0I thought that moment when I asked Paul to take the parenting skills that they\u2019ve developed and apply it to money was really fascinating. Did you notice how he unconsciously shifted into that cartoonish voice? Almost like he couldn\u2019t truly accept the role that he might be someone who is skilled with money, sitting down, and calmly, confidently talking about money. So he just unconsciously made it a joke.<\/p>\n<p>[00:06:50]\u00a0Of course, I could be wrong, but I thought it was fascinating. What I noticed more generally is that every couple has at least one area of life where they are really good. They\u2019re totally dialed in. And for two working parents, it\u2019s often child care. They touch base frequently. They know what\u2019s going on. They\u2019ve developed contingency plans if something goes wrong.<\/p>\n<p>[00:07:10]\u00a0In my role, the simplest thing I can do is help them connect the dots between their area of competence and money. Because money is just skill, like any other skill. And if you work at it, you can get better at it. We\u2019ll be right back after this short break. Before we get back to their numbers, I want you to see something.<\/p>\n<p>[Interview]<\/p>\n<p>[00:07:31]\u00a0<strong>Ramit:<\/strong>\u00a0Paul, you went through the CSP and you sent a little update to me on how humbling it was to go through this process. You almost looked a little struck after doing the CSP. Do you remember that?<\/p>\n<p>[00:07:46]\u00a0<strong>Paul:<\/strong>\u00a0Yeah. When putting the numbers into the current spending plan and seeing all our fixed costs, how it\u2019s 89% of our income was pretty eye-opening. I don\u2019t think we\u2019ve put that all on paper in a long time. We\u2019re in just this equilibrium, at least in our minds.<\/p>\n<p>[00:08:03]\u00a0Seeing that all into perspective was definitely eye-opening, nerve-wracking, stressful. When Morgan and I were doing this together, there were a lot of definitely the two of us being overwhelmed. Coming to hitting walls where we feel like there\u2019s not much we can do on these fixed costs.<\/p>\n<p>[00:08:23]\u00a0<strong>Ramit:<\/strong>\u00a0What did you feel after you got to the end?<\/p>\n<p>[00:08:28]\u00a0<strong>Paul:<\/strong>\u00a0Stressed about money.<\/p>\n<p>[00:08:33]\u00a0<strong>Ramit:<\/strong>\u00a0Really?<\/p>\n<p>[00:08:34]\u00a0<strong>Paul:<\/strong>\u00a0A little bit.<\/p>\n<p>[00:08:35]\u00a0<strong>Ramit:<\/strong>\u00a0Is that the first time you felt stressed about it?<\/p>\n<p>[00:08:37]\u00a0<strong>Paul:<\/strong>\u00a0The times feeling more stressed about money was after completing this.<\/p>\n<p>[00:08:46]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm. Seems like a tough way to live.<\/p>\n<p>[00:08:49]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:08:50]\u00a0<strong>Ramit:<\/strong>\u00a0One partner constantly feeling stressed out by money, trying to use random opportunities to bring up the importance of money to the other partner. Partner number two feeling like, we\u2019re good. I don\u2019t really want to talk about this. In fact, we\u2019re fine. It used to be worse. Now we\u2019re fine. And then never really getting anywhere.<\/p>\n<p>[00:09:13]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:09:14]\u00a0<strong>Paul:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:09:15]\u00a0<strong>Ramit:<\/strong>\u00a0That seems like it can go on for decades, but it\u2019s not really healthy.<\/p>\n<p>[00:09:21]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:09:22]\u00a0<strong>Paul:<\/strong>\u00a0Totally.<\/p>\n<p>[00:09:23]\u00a0<strong>Ramit:<\/strong>\u00a0Do you think that it\u2019s possible to feel good about money?<\/p>\n<p>[00:09:26]\u00a0<strong>Morgan:<\/strong>\u00a0I think so. It feels, I guess, scary. Just thinking about how, for me, to get to the point of feeling good about money feels scary.<\/p>\n<p>[00:09:38]\u00a0<strong>Ramit:<\/strong>\u00a0Because?<\/p>\n<p>[00:09:39]\u00a0<strong>Morgan:<\/strong>\u00a0I think there\u2019s going to be a lot of changes and steps involved.<\/p>\n<p>[Narration]<\/p>\n<p>[00:09:43]\u00a0<strong>Ramit:<\/strong>\u00a0This is why I always ask couples about their experience doing the CSP. Yes, the numbers help me understand their situation. But I really want to see if you did it together with your partner. I want to see if one partner had to drag the other one to do it, or if one person simply typed all the numbers, and the other rolled their eyes and said, okay, whatever, trying to get out of there as soon as they could.<\/p>\n<p>[00:10:05]\u00a0There\u2019s this phrase, \u201cThe way you do anything is the way you do everything.\u201d And I have started to see this more and more across my life. In fact, when I mentor young people, I share this advice. I tell them, \u201cSomeone is always watching.\u201d If you\u2019re running cross country, your partner\u2019s noticing if you cut corners at practice.<\/p>\n<p>[00:10:25]\u00a0If you\u2019re at work, your boss is noticing when you volunteer for a project. They\u2019re noticing how communicative you are. And if you deliver excellence, especially if you deliver it early, and later, in some closed meeting, that boss will use that moment and 100 others to make decisions about your promotion.<\/p>\n<p>[00:10:44]\u00a0You may never know, but she was watching. Ultimately, though, the person watching who really matters is you. Are you performing at your best? When you show up to do the CSP, are you simply going to relive the same pattern that you and your partner always have around money?<\/p>\n<p>[00:11:03]\u00a0Or are you going to show up fresh, ready to make a change, and focus on connecting over money together? Someone is always watching. And we see that because the way you do anything is the way you do everything. That shows up with your CSP, and it shows up throughout your financial life.<\/p>\n<p>[Interview]<\/p>\n<p>[00:11:22]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s the number on investments?<\/p>\n<p>[00:11:27]\u00a0<strong>Morgan:<\/strong>\u00a01%.<\/p>\n<p>[00:11:27]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, so you\u2019re investing 1%. All right. And your savings?<\/p>\n<p>[00:11:31]\u00a0<strong>Morgan:<\/strong>\u00a06%.<\/p>\n<p>[00:11:32]\u00a0<strong>Ramit:<\/strong>\u00a06%, which is going towards home improvements.<\/p>\n<p>[00:11:35]\u00a0<strong>Morgan:<\/strong>\u00a0Basically.<\/p>\n<p>[00:11:36]\u00a0<strong>Ramit:<\/strong>\u00a0Whatever. Let\u2019s not even get into it. Let\u2019s go back to your fixed costs, which are at 84%. Shall we go line by line here?<\/p>\n<p>[00:11:42]\u00a0<strong>Paul:<\/strong>\u00a0Sure.<\/p>\n<p>[00:11:42]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Your housing is pretty low, 1800s. That\u2019s 15 or 16%. Really good.<\/p>\n<p>[00:11:49]\u00a0<strong>Paul:<\/strong>\u00a0That\u2019s with taxes.<\/p>\n<p>[00:11:50]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s taxes and mortgage. We have a low mortgage.<\/p>\n<p>[00:11:52]\u00a0<strong>Paul:<\/strong>\u00a0We got a good rate.<\/p>\n<p>[00:11:53]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s way higher than that.<\/p>\n<p>[00:11:54]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:11:55]\u00a0<strong>Ramit:<\/strong>\u00a0Do you notice that with the renovations, and maintenance, and all that?<\/p>\n<p>[00:11:58]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:11:59]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s probably more like 30% if we were to actually factor in how much you\u2019ve spent in the last 12 months on renovations. Could you ballpark it for me? 10,000?<\/p>\n<p>[00:12:09]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, probably 10,000.<\/p>\n<p>[00:12:11]\u00a0<strong>Ramit:<\/strong>\u00a0So this number here is not fully accurate, your mortgage amount. If you were to actually factor in all the other phantom costs, it would be at least 2,800.<\/p>\n<p>[00:12:24]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:12:25]\u00a0<strong>Ramit:<\/strong>\u00a0So do you now see that you\u2019re basically spending every dollar you make on your fixed?<\/p>\n<p>[00:12:29]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:12:30]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s the haunting reality.<\/p>\n<p>[00:12:37]\u00a0<strong>Paul:<\/strong>\u00a0We bought this house with plans to do stuff to it, and we\u2019re in it four years now, and we\u2019re not where we want to be. So saying, okay, we need to, not fix the finances, fix the house now and start moving it in the direction that we want it.<\/p>\n<p>[00:12:57]\u00a0<strong>Ramit:<\/strong>\u00a0Because fixing the house will mean what?<\/p>\n<p>[00:12:59]\u00a0<strong>Paul:<\/strong>\u00a0Gratification, I guess.<\/p>\n<p>[00:13:03]\u00a0<strong>Ramit:<\/strong>\u00a0Will it?<\/p>\n<p>[00:13:05]\u00a0<strong>Paul:<\/strong>\u00a0In my head, maybe.<\/p>\n<p>[00:13:07]\u00a0<strong>Ramit:<\/strong>\u00a0Have you ever walked in your house and felt gratified?<\/p>\n<p>[00:13:10]\u00a0<strong>Morgan:<\/strong>\u00a0Mm.<\/p>\n<p>[00:13:12]\u00a0<strong>Paul:<\/strong>\u00a0I do.<\/p>\n<p>[00:13:14]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, sometimes.<\/p>\n<p>[00:13:15]\u00a0<strong>Ramit:<\/strong>\u00a0What kind of answer is that? More gratification?<\/p>\n<p>[00:13:20]\u00a0<strong>Morgan:<\/strong>\u00a0I don\u2019t know. I feel overwhelmed in our house because it is not a very functional home.<\/p>\n<p>[00:13:26]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. So when you walk in and when you look around, what do you feel?<\/p>\n<p>[00:13:30]\u00a0<strong>Morgan:<\/strong>\u00a0Overwhelmed and stressed.<\/p>\n<p>[00:13:32]\u00a0<strong>Ramit:<\/strong>\u00a0Paul, what do you think? I would think you feel a little pride. You were able to save up a lot of money.<\/p>\n<p>[00:13:41]\u00a0<strong>Paul:<\/strong>\u00a0It is a functional house. We\u2019ve lived in it for four years. It\u2019s our home. It\u2019s safe, and it works.<\/p>\n<p>[00:13:50]\u00a0<strong>Morgan:<\/strong>\u00a0There are moments of like\u2013 I feel like I\u2019m being negative. There\u2019s moments of appreciation. We live in a really beautiful place. Our kids are outside. We have this lake near our house, and it has the potential to be something really great, but I\u2019ve been holding on to the potential of what it could be.<\/p>\n<p>[00:14:12]\u00a0<strong>Paul:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:14:12]\u00a0<strong>Morgan:<\/strong>\u00a0Versus appreciating what\u2013<\/p>\n<p>[00:14:14]\u00a0<strong>Paul:<\/strong>\u00a0Like fantasizing. When we bought the house, we\u2019re like, okay, great, we\u2019re going to do this. We\u2019re going to do that. It\u2019s going to be like this. And not being there yet.<\/p>\n<p>[00:14:23]\u00a0<strong>Morgan:<\/strong>\u00a0And even how we bought the house was really impulsive. We had the money saved, but it was not, like, okay, we found a realtor. We\u2019re going house hunting. It was like Saturday night, we\u2019re hanging out. I\u2019m on like Redfin or something, and I see it like, oh, look at this house. It\u2019s in this area on a lake. Let\u2019s go look at it. We went to look at this house. The realtor was sharky and was like\u2013<\/p>\n<p>[00:14:49]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on. Is there any other kind of realtor?<\/p>\n<p>[00:14:51]\u00a0<strong>Morgan:<\/strong>\u00a0No. But she was very much like, let me take you to these other houses. And then all of a sudden it was like, oh, we\u2019re house hunting.<\/p>\n<p>[Narration]<\/p>\n<p>[00:14:57]\u00a0<strong>Ramit:<\/strong>\u00a0Yet again, I am shocked at how casually people make life-changing decisions with their money. On this podcast, people routinely go out for a casual weekend looky loo around the neighborhood, and then suddenly, it\u2019s like they trip and fall and buy a house.<\/p>\n<p>[00:15:12]\u00a0Do you know how many fucking years I\u2019ve been tracking real estate prices and calculating TCO of ownership in multiple cities? Yet people will agonize over the extra $30 they spent at Safeway last week. I simply do not get it.<\/p>\n<p>[Interview]<\/p>\n<p>[00:15:27]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s take a look here. You have car payments of 775 bucks.<\/p>\n<p>[00:15:33]\u00a0<strong>Morgan:<\/strong>\u00a0That\u2019s gas.<\/p>\n<p>[00:15:34]\u00a0<strong>Paul:<\/strong>\u00a0That\u2019s gas. We don\u2019t have car payment.<\/p>\n<p>[00:15:36]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s your truck? Gas?<\/p>\n<p>[00:15:38]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:15:38]\u00a0<strong>Paul:<\/strong>\u00a0Well, we have three cars.<\/p>\n<p>[00:15:42]\u00a0<strong>Morgan:<\/strong>\u00a0I know.<\/p>\n<p>[00:15:45]\u00a0<strong>Ramit:<\/strong>\u00a0How many driving adults in your household?<\/p>\n<p>[00:15:47]\u00a0<strong>Paul:<\/strong>\u00a0Just two.<\/p>\n<p>[00:15:48]\u00a0<strong>Ramit:<\/strong>\u00a0Two adults. Three cars. What am I missing?<\/p>\n<p>[00:15:53]\u00a0<strong>Paul:<\/strong>\u00a0Morgan, she got a new car.<\/p>\n<p>[00:15:58]\u00a0<strong>Ramit:<\/strong><strong>\u00a0<\/strong>What car?<\/p>\n<p>[00:15:59]\u00a0<strong>Morgan:<\/strong>\u00a0A Supra.<\/p>\n<p>[00:16:00]\u00a0<strong>Paul:<\/strong>\u00a0How much?<\/p>\n<p>[00:16:02]\u00a0<strong>Morgan:<\/strong>\u00a035.<\/p>\n<p>[00:16:03]\u00a0<strong>Paul:<\/strong>\u00a0Okay.<\/p>\n<p>[00:16:04]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:16:05]\u00a0<strong>Ramit:<\/strong>\u00a0All right.<\/p>\n<p>[00:16:05]\u00a0<strong>Paul:<\/strong>\u00a0Her old car, I took it as 270,000 miles on it. It\u2019s an Acura. I use it because I commute with it. So it\u2019s the beater car. If something big goes on it, we\u2019ll trash it.<\/p>\n<p>[00:16:20]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What\u2019s number three?<\/p>\n<p>[00:16:21]\u00a0<strong>Paul:<\/strong>\u00a0The Toyota Tacoma, which was my primary car. There\u2019s nothing owed on that. It has 175,000 miles. I just want to use it as needed. Getting rid of the beater, it\u2019s worth\u2013<\/p>\n<p>[00:16:36]\u00a0<strong>Morgan:<\/strong>\u00a0But it\u2019s costing money to upkeep. We just had to take it in. It feels like it\u2019s just money.<\/p>\n<p>[00:16:42]\u00a0<strong>Paul:<\/strong>\u00a0We\u2019ll probably get 1,000, $2,000.<\/p>\n<p>[00:16:43]\u00a0<strong>Ramit:<\/strong>\u00a0We\u2019re talking about the Acura?<\/p>\n<p>[00:16:44]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:16:45]\u00a0<strong>Paul:<\/strong>\u00a0$2,000.<\/p>\n<p>[00:16:46]\u00a0<strong>Morgan:<\/strong>\u00a0And it takes premium gas.<\/p>\n<p>[00:16:47]\u00a0<strong>Ramit:<\/strong>\u00a0So what\u2019s the conclusion? What are you doing with it?<\/p>\n<p>[00:16:51]\u00a0<strong>Paul:<\/strong>\u00a0I use it to commute.<\/p>\n<p>[00:16:53]\u00a0<strong>Morgan:<\/strong>\u00a0I want to get rid of it.<\/p>\n<p>[00:16:55]\u00a0<strong>Ramit:<\/strong>\u00a0How do you make this decision?<\/p>\n<p>[00:16:58]\u00a0<strong>Morgan:<\/strong>\u00a0Even when we were making this, this conversation came up, this exact one, and I think Paul speaks in very extreme, like, no, I need this. I need this other car. And it doesn\u2019t feel like there\u2019s room for negotiation.<\/p>\n<p>[00:17:13]\u00a0<strong>Ramit:<\/strong>\u00a0Paul?<\/p>\n<p>[00:17:13]\u00a0<strong>Paul:<\/strong>\u00a0The truck has a small cabinet. We have two kids, so ideally, commuting and bringing the kids around, it has a full backseat, so have the two car seats in there.<\/p>\n<p>[00:17:28]\u00a0<strong>Ramit:<\/strong>\u00a0For the truck?<\/p>\n<p>[00:17:29]\u00a0<strong>Morgan:<\/strong>\u00a0For the Acura.<\/p>\n<p>[00:17:30]\u00a0<strong>Paul:<\/strong>\u00a0The Acura.<\/p>\n<p>[00:17:31]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:17:31]\u00a0<strong>Morgan:<\/strong>\u00a0He wants the truck for work.<\/p>\n<p>[00:17:33]\u00a0<strong>Paul:<\/strong>\u00a0No. The truck. There\u2019s stuff I pick up. We go camping a lot and holds a lot of stuff.<\/p>\n<p>[00:17:44]\u00a0<strong>Ramit:<\/strong>\u00a0You guys realize you have three cars for two adults?<\/p>\n<p>[00:17:46]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah. We spin the wheels in frustration.<\/p>\n<p>[00:17:50]\u00a0<strong>Paul:<\/strong>\u00a0But there was no discussion on getting rid of the car until we started going through these numbers. That\u2019s when it came up.<\/p>\n<p>[Narration]<\/p>\n<p>[00:17:57]\u00a0<strong>Ramit:<\/strong>\u00a0In general, people don\u2019t understand that owning things, especially expensive things, costs you in lots of ways that don\u2019t immediately show up on your monthly spending. Think about it. If you have an extra car, you have to maintain it. You have to pay for gas, registration.<\/p>\n<p>[00:18:12]\u00a0You also have the mental load of deciding which car to take, and, oh no, we got to go to the junkyard to get that extra part because it\u2019s about to break on the car. You also have the opportunity cost of using that money for something else, like paying off debt.<\/p>\n<p>[00:18:28]\u00a0Now, in this conversation, I hear two things. I hear a lot of stories, and I hear a lot of sloppiness. They both admit that the $750 in the spreadsheet for debt payments is inaccurate. Instead, they both randomly throw money at the debt, along with kids and renovation, and that\u2019s why the balance never really seems to change.<\/p>\n<p>[00:18:49]\u00a0Then groceries. On the CSP, they put 1,500 a month. Morgan admits that it\u2019s not correct. Stories and sloppiness. We also got into a bunch of details about their cats, which I\u2019m going to spare you including in today\u2019s conversation. They wrote 300 bucks a month, but as you can imagine, like most people, they are spending a lot more on their pets than they realize.<\/p>\n<p>[00:19:11]\u00a0Overall, they\u2019re not being honest with themselves about where the money\u2019s really going. And one critical thing to living a Rich Life is you\u2019ve got to be honest, honest with yourself, and honest with the people around you.<\/p>\n<p>[00:19:21]\u00a0Hold that thought, we\u2019ll be right back.<\/p>\n<p>[00:19:24]\u00a0Now, back to Paul and Morgan.<\/p>\n<p>[Interview]<\/p>\n<p>[00:19:26]\u00a0<strong>Ramit:<\/strong>\u00a0Can I show you what it would look like if we actually added in $1,000 a month to your mortgage?<\/p>\n<p>[00:19:32]\u00a0<strong>Morgan:<\/strong>\u00a0Mm- hmm.<\/p>\n<p>[00:19:35]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m going to add it right here. I want you to look at the fixed cost number. What just happened?<\/p>\n<p>[00:19:46]\u00a0<strong>Morgan:<\/strong>\u00a0It went up to 93%.<\/p>\n<p>[00:19:48]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. From 84% to 93%. So that\u2019s a lot. Now, who knows? Are you actually spending an extra 1, 000 a month? Is it 800? 500? Who knows? But I know for a fact it\u2019s at least 500 a month because you told me you spent 5,000 on the renovation so far.<\/p>\n<p>[00:20:06]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:20:06]\u00a0<strong>Ramit:<\/strong>\u00a0And then child care is big, $1,440 per month. That\u2019s for one?<\/p>\n<p>[00:20:13]\u00a0<strong>Morgan:<\/strong>\u00a0The cost is 1,996 per month.<\/p>\n<p>[00:20:16]\u00a0<strong>Ramit:<\/strong>\u00a02,000 a month?<\/p>\n<p>[00:20:17]\u00a0<strong>Morgan:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:20:17]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:20:18]\u00a0<strong>Morgan:<\/strong>\u00a0So one child is in child care, and then we pay 180 for before care for the older daughter. And then there\u2019s a camp. You have to pay for camp for her now. So 1,996 is camp and all the child care.<\/p>\n<p>[00:20:33]\u00a0<strong>Ramit:<\/strong>\u00a0There\u2019s nothing in here for miscellaneous expenses that you haven\u2019t counted, which we know\u2013<\/p>\n<p>[00:20:38]\u00a0<strong>Morgan:<\/strong>\u00a0There\u2019s a lot.<\/p>\n<p>[00:20:39]\u00a0<strong>Ramit:<\/strong>\u00a0When it comes to pets, cars, home\u2013<\/p>\n<p>[00:20:42]\u00a0<strong>Morgan:<\/strong>\u00a0Kids.<\/p>\n<p>[00:20:43]\u00a0<strong>Ramit:<\/strong>\u00a0Kids. We\u2019re talking hundreds and hundreds of dollars a month in here. If we added an extra, can we say 500 bucks a month?<\/p>\n<p>[00:20:52]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:20:52]\u00a0<strong>Ramit:<\/strong>\u00a0Would that be fair? I\u2019m just going to add it right here under blank. I want you to look at the fixed cost number. What just happened?<\/p>\n<p>[00:21:01]\u00a0<strong>Paul:<\/strong>\u00a0It\u2019s everything.<\/p>\n<p>[00:21:02]\u00a0<strong>Morgan:<\/strong>\u00a0That\u2019s all our money.<\/p>\n<p>[00:21:03]\u00a0<strong>Ramit:<\/strong>\u00a098% of your take home pay is going to fixed costs. Makes sense that there\u2019s nothing being invested. There\u2019s essentially nothing being saved, because that money is just going to\u2013<\/p>\n<p>[00:21:16]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, to the other thing.<\/p>\n<p>[00:21:18]\u00a0<strong>Ramit:<\/strong>\u00a0Home stuff. You did account for here, so we could take out a little bit here. Let\u2019s drop this down to 400. All right, you\u2019re back down to 92%. Fine. And then you have 1% or $60 on guilt-free spending. I don\u2019t think so. No, we all know that. That\u2019s just what\u2019s left over in the spreadsheet.<\/p>\n<p>[00:21:35]\u00a0<strong>Morgan:<\/strong>\u00a0Right.<\/p>\n<p>[00:21:35]\u00a0<strong>Ramit:<\/strong>\u00a0All right. I just want to zoom out for a second. How would you describe the state of your finances right now? Paul?<\/p>\n<p>[00:21:45]\u00a0<strong>Paul:<\/strong>\u00a0Drastically in bad shape.<\/p>\n<p>[00:21:53]\u00a0<strong>Ramit:<\/strong>\u00a0Morgan?<\/p>\n<p>[00:21:54]\u00a0<strong>Morgan:<\/strong><strong>\u00a0<\/strong>Yeah, it\u2019s a mess.<\/p>\n<p>[00:21:56]\u00a0<strong>Ramit:<\/strong><strong>\u00a0<\/strong>It just sounds like there\u2019s no urgency to change at all. Why would you? You have three cars. You have a house. You\u2019re renovating it. You\u2019re taking trips. Why change?<\/p>\n<p>[00:22:12]\u00a0<strong>Paul:<\/strong>\u00a0Because it\u2019s not going to last.<\/p>\n<p>[00:22:15]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:22:16]\u00a0<strong>Ramit:<\/strong>\u00a0What happens if it doesn\u2019t last?<\/p>\n<p>[00:22:19]\u00a0<strong>Morgan:<\/strong>\u00a0I think I worry.<\/p>\n<p>[00:22:22]\u00a0<strong>Ramit:<\/strong>\u00a0Let me ask it again. What happens if it doesn\u2019t last?<\/p>\n<p>[00:22:26]\u00a0<strong>Paul:<\/strong>\u00a0We fall more into debt or have a bigger issue.<\/p>\n<p>[00:22:33]\u00a0<strong>Ramit:<\/strong>\u00a0And then?<\/p>\n<p>[00:22:35]\u00a0<strong>Paul:<\/strong>\u00a0Then have to make emergency drastic decisions.<\/p>\n<p>[00:22:42]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, it affects our family.<\/p>\n<p>[00:22:43]\u00a0<strong>Paul:<\/strong>\u00a0It affects our family.<\/p>\n<p>[00:22:44]\u00a0<strong>Ramit:<\/strong>\u00a0Like what?<\/p>\n<p>[00:22:46]\u00a0<strong>Paul:<\/strong>\u00a0I don\u2019t know if super drastic would be like, I guess selling the house or foreclosing on your house, not having a place to live.<\/p>\n<p>[00:22:57]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s not that far.<\/p>\n<p>[00:22:57]\u00a0<strong>Paul:<\/strong>\u00a0Not being able\u2013<\/p>\n<p>[00:22:58]\u00a0<strong>Morgan:<\/strong>\u00a0No. Yeah.<\/p>\n<p>[00:22:59]\u00a0<strong>Ramit:<\/strong>\u00a0Did you know that?<\/p>\n<p>[00:23:00]\u00a0<strong>Paul:<\/strong>\u00a0From what?<\/p>\n<p>[00:23:00]\u00a0<strong>Ramit:<\/strong>\u00a0From where you are today?<\/p>\n<p>[00:23:03]\u00a0<strong>Paul:<\/strong>\u00a0No. I didn\u2019t know that.<\/p>\n<p>[00:23:04]\u00a0<strong>Ramit:<\/strong>\u00a0One of you loses your job, how long do you have with the amount of cash you have in savings?<\/p>\n<p>[00:23:10]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:23:11]\u00a0<strong>Paul:<\/strong>\u00a0A month.<\/p>\n<p>[00:23:13]\u00a0<strong>Morgan:<\/strong>\u00a0On my salary, I don\u2019t think we can afford to live.<\/p>\n<p>[00:23:18]\u00a0<strong>Ramit:<\/strong>\u00a0Did you hear what Paul just said?<\/p>\n<p>[00:23:20]\u00a0<strong>Morgan:<\/strong>\u00a0Less than a month.<\/p>\n<p>[00:23:21]\u00a0<strong>Paul:<\/strong>\u00a0Less than a month.<\/p>\n<p>[00:23:23]\u00a0<strong>Ramit:<\/strong><strong>\u00a0<\/strong>So you can see why it\u2019s striking to me that we\u2019re over here having a 10-minute discussion about three cars, when I\u2019m sitting here saying, if one of you loses your job for any reason, you have less than one month of money in savings. And the whole let\u2019s spin and spin and not make decisions, you can keep doing it, just skating closer to the edge. And hopefully things don\u2019t go bad, but if they do, they go really bad really fast.<\/p>\n<p>[00:23:52]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:23:55]\u00a0<strong>Paul:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:23:57]\u00a0<strong>Morgan:<\/strong>\u00a0Our lifestyle would change drastically. And I can\u2019t carry the weight of this anymore, and our relationship would probably crumble apart.<\/p>\n<p>[Narration]<\/p>\n<p>[00:24:13]\u00a0<strong>Ramit:<\/strong>\u00a0I just want to pause here to reflect on the difference between what their concern was when they walked in versus now. Remember that on our last episode, part one of this conversation, we spent a ton of time talking about some random 12-dollar a month music subscription. And now in today\u2019s conversation, we realize they are essentially spending everything they make on every single month.<\/p>\n<p>[00:24:37]\u00a0Most couples I speak to who are in financial trouble do exactly the same thing. They fixate on one random expense because, frankly, it\u2019s easier than facing the truth of their real financial troubles. My wish for everyone who listens to this podcast is that you have the courage to get honest\u2013 honest about how much money you\u2019re making, honest about where the money is going, honest about what your Rich Life is. If you know those things, then you can redo your puzzle and make sure the pieces are going exactly where you want.<\/p>\n<p>[Interview]<\/p>\n<p>[00:25:10]\u00a0<strong>Ramit:<\/strong>\u00a0Can we talk about your accounts? The way you have your accounts set up, how does it work?<\/p>\n<p>[00:25:16]\u00a0<strong>Paul:<\/strong>\u00a0It was Morgan\u2019s original account, and the way she describes it, and I agree, is her responsibility was daycare, and that money would be in there, and she wanted to make sure it was always there to pay daycare on time and was worried that if we co-mingled both accounts, there would be times where daycare couldn\u2019t get paid on time.<\/p>\n<p>[00:25:43]\u00a0<strong>Ramit:<\/strong>\u00a0So reading back what I just heard, Morgan, you were concerned that you needed to split out an account just for child care because you decided to take responsibility for that. And if you had left all the money in one account, like a checking account, you thought it just would have gotten spent.<\/p>\n<p>[00:26:02]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, the joint checking feels very volatile.<\/p>\n<p>[00:26:06]\u00a0<strong>Paul:<\/strong>\u00a0And up until this past year, we had two kids in daycare, so the cost was double that.<\/p>\n<p>[00:26:14]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that\u2019s a lot. What do you make of that? The fact that you had to create a separate account for child care because you were worried that the money in your checking account would all get spent.<\/p>\n<p>[00:26:26]\u00a0<strong>Morgan:<\/strong>\u00a0Part of it feels validating of why I\u2019m stressed about money. But I wish it didn\u2019t have to be that way.<\/p>\n<p>[00:26:36]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Does it have to be that way?<\/p>\n<p>[00:26:38]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:26:40]\u00a0<strong>Ramit:<\/strong>\u00a0Why is it?<\/p>\n<p>[00:26:41]\u00a0<strong>Morgan:<\/strong>\u00a0I think because there hasn\u2019t been conversations or behavior change to have that\u2013 I had to adapt to what was happening versus us adapt to our life, if that makes sense.<\/p>\n<p>[00:26:56]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, it makes sense. It sounds like it\u2019s been pretty tough to have to basically set up a whole separate account and squirrel money away so that you know your kids are taken care of instead of having a series of real conversations with your adult partner. What do you think, Paul?<\/p>\n<p>[00:27:18]\u00a0<strong>Paul:<\/strong>\u00a0Yeah, agree.<\/p>\n<p>[Narration]<\/p>\n<p>[00:27:21]\u00a0Why is childcare Morgan\u2019s responsibility? Why do couples split their money up by random expenses? And why does childcare and kids\u2019 clothes always fall to women? I\u2019m so sick of this shit. I\u2019m going to tell you exactly why this is such a bad idea. Most couples simply slide into combining their financial lives together.<\/p>\n<p>[00:27:41]\u00a0They actually don\u2019t have a serious, single conversation about money. So what happens is one person starts to say, oh, I\u2019ll take care of the groceries. The other person says, oh, I\u2019ll take care of the rent. One person pays for childcare, etc. But as things change, instead of having one kid in childcare, they have two, or they get another car, they have higher car payments, they never talk about it. They simply struggle more and more with one person paying a disproportionate amount, the other not paying enough, and then one day they just blow up. What if, instead, you actually combined your income and you could have a single bird\u2019s eye view of your finances?<\/p>\n<p>[00:28:19]\u00a0Wouldn\u2019t that make it easier? And wouldn\u2019t it make it easier for both of you to be able to handle life\u2019s inevitable changes together instead of separately? You have to remember that most people are not bad people. They\u2019re good. But when you set your accounts up to be separate, you will handle your finances separately. Change your accounts to be combined, and you will be structurally aligned, financially aligned, and in fact, even much more intimately aligned too.<\/p>\n<p>[Interview]<\/p>\n<p>[00:28:48]\u00a0<strong>Ramit:<\/strong>\u00a0It suggests two things. First of all, lack of communication about the fact that you\u2019re not talking about this in a healthy way. And second, it also suggests to me that, wow, you really put your kids first because you knew child care needs to get covered. So I\u2019m going to move heaven and earth to make that happen. You ever missed child care payment?<\/p>\n<p>[00:29:10]\u00a0<strong>Morgan:<\/strong>\u00a0No. We haven\u2019t missed payments, but we\u2019re just at that point. Like my student loan debt, I just pretend it doesn\u2019t exist. That\u2019s how I\u2019ve lived the last 10, 15 years of like, this doesn\u2019t exist.<\/p>\n<p>[00:29:28]\u00a0<strong>Paul:<\/strong>\u00a0But on the flip side, mortgage and taxes have always been my responsibility out of my paycheck also.<\/p>\n<p>[00:29:37]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm. Why do y\u2019all have different responsibilities? Why don\u2019t you just combine your money?<\/p>\n<p>[00:29:43]\u00a0<strong>Morgan:<\/strong>\u00a0I think it was an evolution of like, we\u2019re not married. We had a kid, earlier in our\u2013 we were together like four years, and it just evolved. Again, adapting to the situation, not us adapting\u2013<\/p>\n<p>[00:30:02]\u00a0<strong>Paul:<\/strong><strong>\u00a0<\/strong>And I think it was just passed from years ago that that\u2019s just what we were doing. Morgan made X. She covered this, this, and that from that paycheck.<\/p>\n<p>[00:30:15]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:30:15]\u00a0<strong>Paul:<\/strong>\u00a0And I covered this, this, and that from that paycheck.<\/p>\n<p>[00:30:18]\u00a0<strong>Ramit:<\/strong>\u00a0You see why that doesn\u2019t work in the long-term. One person makes more money or less money. You have expenses that come, that go, and you never really adapt it. I guarantee you never sat down and said, oh, wow, we have extra renovation costs, therefore we should talk about how to apportion that. Or childcare has changed. Let\u2019s talk about it.<\/p>\n<p>[00:30:35]\u00a0<strong>Morgan:<\/strong>\u00a0Right, no.<\/p>\n<p>[00:30:36]\u00a0<strong>Paul:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:30:37]\u00a0<strong>Ramit:<\/strong>\u00a0It doesn\u2019t scale. It\u2019s not a healthy way of doing things. One person paying for groceries, one person paying for childcare. It seems like it makes sense in that instant moment, but it never makes sense over the long-term. Is either of you passive in real life, like in day-to-day life, at work, things like that?<\/p>\n<p>[00:31:00]\u00a0<strong>Paul:<\/strong>\u00a0No. As a manager, I\u2019m in charge of people, so I have to be direct. I think sometimes I try to put a line between work and personal, and then I regress when I get into my personal life, because that\u2019s my job to do that.<\/p>\n<p>[00:31:19]\u00a0<strong>Morgan:<\/strong>\u00a0He manages the budget at work.<\/p>\n<p>[00:31:21]\u00a0<strong>Ramit:<\/strong>\u00a0Really?<\/p>\n<p>[00:31:22]\u00a0<strong>Morgan:<\/strong>\u00a0He manages projects. It\u2019s his job.<\/p>\n<p>[00:31:24]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. It\u2019s funny because usually when I talk to project managers, they\u2019re the ones who are really proud to show me their conscious spending plan. They totally took my conscious spending plan and made it into a Frankenstein monster. It has 500 categories. I\u2019m like, that\u2019s not the point of the CSP.<\/p>\n<p>[00:31:38]\u00a0My point is to protect you from you. But in this case, opposite. You\u2019re saying, I make a ton of decisions at work. When I come home, I don\u2019t want to have to make all those decisions. Therefore, Morgan, she\u2019s good with money.<\/p>\n<p>[00:31:51]\u00a0<strong>Morgan:<\/strong>\u00a0I\u2019m not good with money, though. That\u2019s where I constantly feel like I\u2019m sounding alarms. Like, I\u2019m not good with money.<\/p>\n<p>[00:31:59]\u00a0<strong>Ramit:<\/strong>\u00a0And have you told him that?<\/p>\n<p>[00:32:00]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:32:01]\u00a0<strong>Ramit:<\/strong>\u00a0And have you received that?<\/p>\n<p>[00:32:05]\u00a0<strong>Paul:<\/strong>\u00a0Yeah, I think I\u2019m aware of that.<\/p>\n<p>[00:32:08]\u00a0<strong>Ramit:<\/strong>\u00a0But then how come your response is, we\u2019re going to be okay? We\u2019ll figure it out.<\/p>\n<p>[00:32:15]\u00a0<strong>Paul:<\/strong>\u00a0Because I\u2019ll have to figure it out, I guess. Not I guess. I will have to figure it out.<\/p>\n<p>[00:32:21]\u00a0<strong>Ramit:<\/strong>\u00a0When? It\u2019s been a decade.<\/p>\n<p>[00:32:24]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, we\u2019re just reacting to what we\u2019ve made versus being proactive.<\/p>\n<p>[00:32:31]\u00a0<strong>Ramit:<\/strong>\u00a0Yes. Let\u2019s buy a house impulsively. Then let\u2019s react to all these expenses that come up. Let\u2019s get a car, and then let\u2019s react.<\/p>\n<p>[00:32:40]\u00a0<strong>Morgan:<\/strong>\u00a0Let\u2019s have a kid. Let\u2019s everything.<\/p>\n<p>[00:32:43]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Right. You think it\u2019s possible to make big, big changes with your money and get on top of it?<\/p>\n<p>[00:32:55]\u00a0<strong>Morgan:<\/strong>\u00a0I do.<\/p>\n<p>[00:32:56]\u00a0<strong>Paul:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:32:57]\u00a0<strong>Ramit:<\/strong>\u00a0What would it look like?<\/p>\n<p>[00:32:58]\u00a0<strong>Morgan:<\/strong>\u00a0There would have to be a fundamental shift in how we\u2019re communicating, the conversations we\u2019re having, and where we\u2019re prioritizing it.<\/p>\n<p>[00:33:07]\u00a0<strong>Paul:<\/strong>\u00a0And staying on top of it, taking the initiative.<\/p>\n<p>[00:33:12]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah. We could easily slip back into, well, I wanted that, so let\u2019s do that.<\/p>\n<p>[00:33:18]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Do you think you\u2019d be willing to make big changes right now in order to get in a healthier position with your money?<\/p>\n<p>[00:33:28]\u00a0<strong>Morgan:<\/strong>\u00a0I would.<\/p>\n<p>[00:33:29]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:33:31]\u00a0<strong>Paul:<\/strong>\u00a0I would be open to that.<\/p>\n<p>[00:33:33]\u00a0<strong>Ramit:<\/strong>\u00a0We can do that. It\u2019s your money. I\u2019m simply here to help. I can\u2019t drive you anywhere you don\u2019t want to go. This is your Rich Life. So why don\u2019t we make some small changes, and then let\u2019s see what happens.<\/p>\n<p>[00:33:46]\u00a0<strong>Morgan:<\/strong>\u00a0Okay.<\/p>\n<p>[00:33:47]\u00a0<strong>Ramit:<\/strong>\u00a0Here we are at your fixed costs, which are at 92%. What would you like to change?<\/p>\n<p>[00:33:58]\u00a0<strong>Morgan:<\/strong>\u00a0Groceries.<\/p>\n<p>[00:34:00]\u00a0<strong>Paul:<\/strong>\u00a0Groceries.<\/p>\n<p>[00:34:00]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Right now it\u2019s 1,500.<\/p>\n<p>[00:34:04]\u00a0<strong>Morgan:<\/strong>\u00a0I would love for it to be 700.<\/p>\n<p>[00:34:09]\u00a0<strong>Ramit:<\/strong>\u00a0This isn\u2019t fantasy world.<\/p>\n<p>[00:34:11]\u00a0<strong>Morgan:<\/strong>\u00a0No, I know.<\/p>\n<p>[00:34:11]\u00a0<strong>Ramit:<\/strong>\u00a0A realistic number that you can actually hit.<\/p>\n<p>[00:34:15]\u00a0<strong>Morgan:<\/strong>\u00a0I think 800.<\/p>\n<p>[00:34:17]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s basically half of what you\u2019re spending right now. Can you do that?<\/p>\n<p>[00:34:25]\u00a0<strong>Paul:<\/strong>\u00a0In the conscious spending plan, we calculated it. We calculated how much we would spend at the farmer\u2019s market, how much we would spend at Trader Joe\u2019s to supplement, and we came to 1,000 a month.<\/p>\n<p>[00:34:42]\u00a0<strong>Ramit:<\/strong>\u00a0Can I just ask, y\u2019all are spending 100 percent of what you make, basically, and you\u2019re talking about shopping at the farmer\u2019s market.<\/p>\n<p>[00:34:50]\u00a0<strong>Morgan:<\/strong>\u00a0I know.<\/p>\n<p>[00:34:54]\u00a0<strong>Paul:<\/strong>\u00a0Just for produce in the summer, spring.<\/p>\n<p>[00:34:59]\u00a0<strong>Morgan:<\/strong>\u00a0I know.<\/p>\n<p>[00:35:01]\u00a0<strong>Ramit:<\/strong>\u00a0You want to change it to 1,000 bucks, I\u2019ll change it to 1,000 bucks. I\u2019m just telling you\u2013<\/p>\n<p>[00:35:05]\u00a0<strong>Paul:<\/strong>\u00a0It\u2019s not going to do much.<\/p>\n<p>[00:35:06]\u00a0<strong>Ramit:<\/strong>\u00a0Watch the numbers. Fixed costs are currently 92%. I just changed it. You drop 500 bucks a month. You\u2019re at 88%. Okay, we\u2019re moving in the right direction. What do you want to change next?<\/p>\n<p>[00:35:17]\u00a0<strong>Paul:<\/strong>\u00a0I want to take some cash that we have and pay off the debt, so after a couple of months, to be debt free, so we won\u2019t need debt payments anymore.<\/p>\n<p>[00:35:27]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s talk about that. Where is the money coming from?<\/p>\n<p>[00:35:30]\u00a0<strong>Paul:<\/strong>\u00a0It would come from savings, and in May, I would get about $3,000 commission.<\/p>\n<p>[00:35:42]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, 3,000.<\/p>\n<p>[00:35:44]\u00a0<strong>Paul:<\/strong>\u00a0Plus another 3,000 from savings puts debt at 500.<\/p>\n<p>[00:35:53]\u00a0<strong>Morgan:<\/strong>\u00a0I think that\u2019s going back to what we\u2019ve been doing versus making real changes.<\/p>\n<p>[00:36:01]\u00a0<strong>Paul:<\/strong>\u00a0But I\u2019m saying after a couple months, the 750 debt payment wouldn\u2019t be on there.<\/p>\n<p>[00:36:08]\u00a0<strong>Morgan:<\/strong>\u00a0Well, yeah, but we have a choice right now to make changes. The behavior has to change, which it\u2019s not. We\u2019re not doing that in this conversation. We\u2019re just spinning the wheels, it feels like, right now.<\/p>\n<p>[00:36:22]\u00a0<strong>Ramit:<\/strong>\u00a0Ask him what you want him to do. You\u2019re totally right. You are spinning. Tell him what you want.<\/p>\n<p>[00:36:28]\u00a0<strong>Morgan:<\/strong>\u00a0I want big changes.<\/p>\n<p>[00:36:30]\u00a0<strong>Ramit:<\/strong>\u00a0Tell him.<\/p>\n<p>[00:36:31]\u00a0<strong>Morgan:<\/strong>\u00a0I want big changes.<\/p>\n<p>[00:36:32]\u00a0<strong>Paul:<\/strong>\u00a0Okay, so something\u2013<\/p>\n<p>[00:36:35]\u00a0<strong>Morgan:<\/strong>\u00a0I don\u2019t want it to be on me.<\/p>\n<p>[00:36:37]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Paul, it\u2019s up to you now.<\/p>\n<p>[00:37:01]\u00a0<strong>Paul:<\/strong>\u00a0Can you go down?<\/p>\n<p>[00:37:09]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s pause. Let\u2019s get you a tissue. Do you need to take a break?<\/p>\n<p>[00:37:18]\u00a0<strong>Paul:<\/strong>\u00a0No.<\/p>\n<p>[00:37:22]\u00a0<strong>Ramit:<\/strong>\u00a0Thank you. How\u2019re you doing?<\/p>\n<p>[00:37:49]\u00a0<strong>Morgan:<\/strong>\u00a0I\u2019m okay.<\/p>\n<p>[00:37:51]\u00a0<strong>Ramit:<\/strong>\u00a0Let me know anytime you need\u2013<\/p>\n<p>[00:37:52]\u00a0<strong>Morgan:<\/strong>\u00a0Thank you.<\/p>\n<p>[00:37:56]\u00a0<strong>Ramit:<\/strong>\u00a0I can see it\u2019s difficult for you looking at these numbers. It is difficult. But if I\u2019m here as an observer, and I know Morgan is here, she\u2019s trying to get inside your head and understand what\u2019s going on. It\u2019s difficult if we can\u2019t get anything from you, so do us a favor. Talk out loud. She\u2019s dropped 500 bucks a month off groceries. What do you want to do?<\/p>\n<p>[00:38:27]\u00a0<strong>Paul:<\/strong>\u00a0I guess we have the gas expense, insurance expense of three cars. We can get rid of one of the cars, recoup that money. I\u2019m not sure how much it would go down.<\/p>\n<p>[00:38:48]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m taking your car payment down by 300 bucks a month. Look at the fixed cost number. What just happened?<\/p>\n<p>[00:38:58]\u00a0<strong>Paul:<\/strong>\u00a0Not much.<\/p>\n<p>[00:38:59]\u00a0<strong>Ramit:<\/strong>\u00a0Dropped from 88 to 85.<\/p>\n<p>[00:39:00]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:39:02]\u00a0<strong>Paul:<\/strong>\u00a0I\u2019m avoidant on wanting to change the mortgage or child care cost. Those are the big numbers.<\/p>\n<p>[00:39:10]\u00a0<strong>Morgan:<\/strong>\u00a0It doesn\u2019t feel like how.<\/p>\n<p>[00:39:11]\u00a0<strong>Ramit:<\/strong>\u00a0What?<\/p>\n<p>[00:39:11]\u00a0<strong>Paul:<\/strong>\u00a0I don\u2019t feel like I could. And those are the big expenses. Right?<\/p>\n<p>[00:39:24]\u00a0<strong>Ramit:<\/strong>\u00a0What would you do at work? Take off your home hat and put on your work hat where you\u2019re a project manager managing people. I come to you, I go, I got this problem. I\u2019m spending 85% of my budget on blank, blank, blank. Manage me. Drive it like you would drive it at work.<\/p>\n<p>[00:39:43]\u00a0<strong>Paul:<\/strong>\u00a0Well, we\u2019d see what the total cost is of the job, and we would have to make changes to get to that cost.<\/p>\n<p>[00:39:58]\u00a0<strong>Ramit:<\/strong>\u00a0You wouldn\u2019t just wait.<\/p>\n<p>[00:40:00]\u00a0<strong>Paul:<\/strong>\u00a0No, you can\u2019t.<\/p>\n<p>[00:40:00]\u00a0<strong>Ramit:<\/strong>\u00a0Why not?<\/p>\n<p>[00:40:01]\u00a0<strong>Paul:<\/strong>\u00a0You\u2019d have to do it, and you\u2019d have to forecast in advance what the changes are going to be.<\/p>\n<p>[00:40:08]\u00a0<strong>Ramit:<\/strong>\u00a0What the fuck\u2019s happening right now? I like this. I like this. Okay, tell me more. So how does that apply here?<\/p>\n<p>[00:40:16]\u00a0<strong>Paul:<\/strong>\u00a0We have to make drastic decisions.<\/p>\n<p>[00:40:19]\u00a0<strong>Ramit:<\/strong>\u00a0What? All it took was me asking what do you do at work? And suddenly you turn into this fucking killer? What is happening? All right, what do you call yourself at work? I feel like you have a nickname at work. Killer Paul. Don\u2019t fuck with me. I fucking PM this shit all day long. What is it?<\/p>\n<p>[00:40:35]\u00a0<strong>Paul:<\/strong>\u00a0No, I don\u2019t know.<\/p>\n<p>[00:40:37]\u00a0<strong>Ramit:<\/strong>\u00a0Well, now that\u2019s your name, Killer Paul. Tell everyone at work. Send them an email. Killer Paul\u2019s on the case. All right, tell us. What are we going to do, Paul?<\/p>\n<p>[00:40:45]\u00a0<strong>Paul:<\/strong>\u00a0We\u2019re going to make bigger changes.<\/p>\n<p>[00:40:49]\u00a0<strong>Morgan:<\/strong>\u00a0Wow.<\/p>\n<p>[00:40:49]\u00a0<strong>Ramit:<\/strong>\u00a0Tell her.<\/p>\n<p>[00:40:50]\u00a0<strong>Paul:<\/strong>\u00a0Yeah, so I\u2019m going to tell you right now what to do.<\/p>\n<p>[00:40:53]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:40:53]\u00a0<strong>Paul:<\/strong>\u00a0I just want to run a scenario.<\/p>\n<p>[00:40:58]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:40:59]\u00a0<strong>Paul:<\/strong>\u00a0Take out the 400 at the house.<\/p>\n<p>[00:41:01]\u00a0<strong>Ramit:<\/strong>\u00a0The 400 for the rent and mortgage.<\/p>\n<p>[00:41:03]\u00a0<strong>Paul:<\/strong>\u00a0Just take it out.<\/p>\n<p>[00:41:04]\u00a0<strong>Ramit:<\/strong>\u00a0All right, zeroed it out.<\/p>\n<p>[00:41:06]\u00a0<strong>Paul:<\/strong>\u00a0Take out the 500 for miscellaneous.<\/p>\n<p>[00:41:08]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. 500\u2019s gone.<\/p>\n<p>[00:41:10]\u00a0<strong>Paul:<\/strong>\u00a0500\u2019s gone. And hypothetically, take out the 700 debt payment. I want to see what it looks like.<\/p>\n<p>[00:41:17]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Zeroed out.<\/p>\n<p>[00:41:18]\u00a0<strong>Paul:<\/strong>\u00a0We took out, what? We took out $1,600.<\/p>\n<p>[00:41:22]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Tell us what the fixed cost number was\u2013<\/p>\n<p>[00:41:24]\u00a0<strong>Paul:<\/strong>\u00a069.<\/p>\n<p>[00:41:25]\u00a0<strong>Ramit:<\/strong>\u00a0It was at 88%. Now what is it at?<\/p>\n<p>[00:41:27]\u00a0<strong>Paul:<\/strong>\u00a0It\u2019s at 69.<\/p>\n<p>[00:41:28]\u00a0<strong>Ramit:<\/strong>\u00a0All right.<\/p>\n<p>[00:41:29]\u00a0<strong>Paul:<\/strong>\u00a0It went somewhere.<\/p>\n<p>[00:41:30]\u00a0<strong>Ramit:<\/strong>\u00a0It definitely went somewhere. Tell us what you just did.<\/p>\n<p>[00:41:33]\u00a0<strong>Paul:<\/strong>\u00a0I ran a scenario.<\/p>\n<p>[00:41:35]\u00a0<strong>Ramit:<\/strong>\u00a0All right, what was the scenario?<\/p>\n<p>[00:41:37]\u00a0<strong>Paul:<\/strong>\u00a0I wanted to see, hypothetically, if the debt was paid off, and we didn\u2019t have to make a debt payment. The 500 that\u2019s in there, it was thrown in as miscellaneous, but it\u2019s a number assuming that there\u2019s a cost in there.<\/p>\n<p>[00:41:53]\u00a0<strong>Ramit:<\/strong>\u00a0Fine, we took it out. And what was this rent, 400 bucks you took off, the mortgage?<\/p>\n<p>[00:41:59]\u00a0<strong>Paul:<\/strong>\u00a0That was for maintenance for the house.<\/p>\n<p>[00:42:02]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, tell us. Why did you make that? I like what you\u2019re doing.<\/p>\n<p>[00:42:05]\u00a0<strong>Paul:<\/strong>\u00a0Right now it\u2019s a hypothetical cost. Yes, there\u2019s maintenance within the house. The home improvement right now has been on a credit card. That\u2019s not even in this cost. We\u2019re associating it with debt right now.<\/p>\n<p>[00:42:25]\u00a0<strong>Ramit:<\/strong>\u00a0Say it in plain English, and say it to the person who actually cares about home renovations. Look at her.<\/p>\n<p>[00:42:33]\u00a0That 400 that was put in this spreadsheet was already accounted for in our debt, so we\u2019re double counting it right now.<\/p>\n<p>[00:42:48]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. That was good. And what does it mean for the next two or three years of your life that you just made that change, as it relates to your home renovations?<\/p>\n<p>[00:43:01]\u00a0<strong>Paul:<\/strong>\u00a0We\u2019re not going to be able to renovate the home in the time frame that we want to.<\/p>\n<p>[00:43:10]\u00a0<strong>Ramit:<\/strong>\u00a0Ask her what she thinks about that. Toss the ball back to her.<\/p>\n<p>[00:43:13]\u00a0<strong>Paul:<\/strong>\u00a0Are you okay with that?<\/p>\n<p>[00:43:15]\u00a0<strong>Morgan:<\/strong>\u00a0I have to be.<\/p>\n<p>[00:43:17]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Ask her again. That\u2019s an interesting answer. This is where you have to be honest about how you feel.<\/p>\n<p>[00:43:24]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:43:25]\u00a0<strong>Ramit:<\/strong>\u00a0Ask her again.<\/p>\n<p>[00:43:27]\u00a0<strong>Paul:<\/strong>\u00a0Are you okay with not renovating the house?<\/p>\n<p>[00:43:30]\u00a0<strong>Ramit:<\/strong>\u00a0Because. Tell her why.<\/p>\n<p>[00:43:32]\u00a0<strong>Paul:<\/strong>\u00a0Because it\u2019s a cost right now that we cannot afford.<\/p>\n<p>[00:43:37]\u00a0<strong>Ramit:<\/strong>\u00a0Tell her more. You care about it, right?<\/p>\n<p>[00:43:41]\u00a0<strong>Morgan:<\/strong>\u00a0Right now, I care about it.<\/p>\n<p>[00:43:43]\u00a0<strong>Ramit:<\/strong>\u00a0Tell him.<\/p>\n<p>[00:43:43]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah. I do care about it. I want to prioritize the house, but I want to plan forward. I don\u2019t want to just do it.<\/p>\n<p>[00:43:50]\u00a0<strong>Paul:<\/strong>\u00a0No, we\u2019re not spending money on renovating.<\/p>\n<p>[00:43:52]\u00a0<strong>Morgan:<\/strong>\u00a0We\u2019re not.<\/p>\n<p>[00:43:52]\u00a0<strong>Paul:<\/strong>\u00a0There is 600\u2013<\/p>\n<p>[00:43:54]\u00a0<strong>Morgan:<\/strong>\u00a0There\u2019s no money to spend on it.<\/p>\n<p>[00:43:57]\u00a0<strong>Paul:<\/strong>\u00a0There\u2019s no money to spend on renovating. We\u2019re not going to renovate right now. We will use\u2013<\/p>\n<p>[00:44:02]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, look at her.<\/p>\n<p>[00:44:03]\u00a0<strong>Paul:<\/strong>\u00a0The $600 for one month will go to a toilet. So there\u2019s the toilet there. And then we\u2019re not renovating the house until we have money associated for it. I have to buy a toilet.<\/p>\n<p>[00:44:22]\u00a0<strong>Ramit:<\/strong>\u00a0You do?<\/p>\n<p>[00:44:23]\u00a0<strong>Paul:<\/strong>\u00a0I have to put one toilet.<\/p>\n<p>[00:44:24]\u00a0<strong>Ramit:<\/strong>\u00a0You have to?<\/p>\n<p>[00:44:25]\u00a0<strong>Paul:<\/strong>\u00a0Yes.<\/p>\n<p>[00:44:25]\u00a0<strong>Ramit:<\/strong>\u00a0Have to?<\/p>\n<p>[00:44:26]\u00a0<strong>Morgan:<\/strong>\u00a0We don\u2019t have to.<\/p>\n<p>[00:44:28]\u00a0<strong>Ramit:<\/strong>\u00a0You have to buy a toilet. You have to shop at the farmers\u2019 market. You have to buy specialty food for your cats. You have to have three cars. How much stuff do you have to do?<\/p>\n<p>[00:44:41]\u00a0<strong>Morgan:<\/strong>\u00a0We really don\u2019t have to do anything.<\/p>\n<p>[00:44:46]\u00a0<strong>Paul:<\/strong>\u00a0Well, we have to do some things that are necessities.<\/p>\n<p>[00:44:50]\u00a0<strong>Ramit:<\/strong>\u00a0Paul, did you hear what she just said?<\/p>\n<p>[00:44:52]\u00a0<strong>Paul:<\/strong>\u00a0We don\u2019t have to do anything.<\/p>\n<p>[00:44:54]\u00a0<strong>Ramit:<\/strong>\u00a0Take that and run with it. Don\u2019t just naturally be adversarial with her.<\/p>\n<p>[00:44:58]\u00a0<strong>Paul:<\/strong>\u00a0Okay.<\/p>\n<p>[00:44:59]\u00a0<strong>Ramit:<\/strong>\u00a0What she\u2019s saying is, I might be open to not renovating the toilet.<\/p>\n<p>[00:45:03]\u00a0<strong>Paul:<\/strong>\u00a0Okay. We will not renovate\u2013<\/p>\n<p>[00:45:05]\u00a0<strong>Ramit:<\/strong>\u00a0Ask her, ask her. Don\u2019t tell her.<\/p>\n<p>[00:45:06]\u00a0<strong>Paul:<\/strong>\u00a0Are you okay with leaving the bathroom the way it is until we get our fixed costs down and we have more of a plan to renovate the bathroom and the remainder of the house?<\/p>\n<p>[00:45:18]\u00a0<strong>Morgan:<\/strong>\u00a0It feels stressful because we\u2019re in the middle of a renovation, so that\u2019s where the hesitation was.<\/p>\n<p>[00:45:22]\u00a0<strong>Ramit:<\/strong>\u00a0So?<\/p>\n<p>[00:45:23]\u00a0<strong>Paul:<\/strong>\u00a0It is what it is.<\/p>\n<p>[00:45:25]\u00a0<strong>Ramit:<\/strong>\u00a0If you were going to get really aggressive about it, you could take your guilt-free spending, which is about $1,100 a month, and you could say, right now we need to buckle down.<\/p>\n<p>[00:45:38]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:45:39]\u00a0<strong>Ramit:<\/strong>\u00a0We need to not eat out. We need to not travel for a while, and we need to go pretty bare bones as a family.<\/p>\n<p>[00:45:48]\u00a0<strong>Morgan:<\/strong>\u00a0Right.<\/p>\n<p>[00:45:49]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s it. That\u2019s reality. There\u2019s no more easy decisions to make. You got the groceries down. You knocked a number off, great. All other decisions are now difficult.<\/p>\n<p>[Narration]<\/p>\n<p>[00:45:58]\u00a0<strong>Ramit:<\/strong>\u00a0First of all, what the hell? Have you ever seen a transformation like that? I asked Paul to pretend this was work, and it was like he kicked over a table and started using words like forecast and scenario. I have literally never seen anything like this. Is anyone else impressed?<\/p>\n<p>[00:46:13]\u00a0What I like is how he suddenly took control. Now, obviously, one exercise is not going to change anything, but for me, it was quite revealing that he can exert that kind of agency.<\/p>\n<p>[00:46:27]\u00a0Let\u2019s take a quick break to support our sponsors.<\/p>\n<p>[00:46:30]\u00a0Thanks for your patience. Let\u2019s get back into it.<\/p>\n<p>[00:46:33]\u00a0Reality means you can\u2019t just zero out debt, especially considering that Morgan has 15,000 in student loan debt that we haven\u2019t even talked about. So to make sure they leave this conversation with a rock solid picture of the truth, I reverted the CSP back to its usual state. Let\u2019s keep going from there.<\/p>\n<p>[Interview]<\/p>\n<p>[00:46:51]\u00a0<strong>Ramit:<\/strong>\u00a0Can I just say these clothes at 180 bucks a month\u2013<\/p>\n<p>[00:46:53]\u00a0<strong>Morgan:<\/strong>\u00a0We can get rid of that.<\/p>\n<p>[00:46:54]\u00a0<strong>Ramit:<\/strong>\u00a0No fucking way.<\/p>\n<p>[00:46:55]\u00a0<strong>Paul:<\/strong>\u00a0I haven\u2019t bought clothes in four or five years.<\/p>\n<p>[00:46:57]\u00a0<strong>Ramit:<\/strong>\u00a0Zero.<\/p>\n<p>[00:46:58]\u00a0<strong>Paul:<\/strong>\u00a0I don\u2019t know what that\u2019s coming from.<\/p>\n<p>[00:46:59]\u00a0<strong>Ramit:<\/strong>\u00a0We\u2019re taking that away. We\u2019re at 82%. All right.<\/p>\n<p>[00:47:01]\u00a0<strong>Morgan:<\/strong>\u00a0I think we were trying to account for what we have been spending.<\/p>\n<p>[00:47:04]\u00a0<strong>Paul:<\/strong>\u00a0Because we have kids and stuff.<\/p>\n<p>[00:47:05]\u00a0<strong>Ramit:<\/strong>\u00a0How about just no clothes?<\/p>\n<p>[00:47:06]\u00a0<strong>Morgan:<\/strong>\u00a0No clothes.<\/p>\n<p>[00:47:06]\u00a0<strong>Ramit:<\/strong>\u00a0Can you find some free clothes for the kids?<\/p>\n<p>[00:47:08]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah, we can figure it out.<\/p>\n<p>[00:47:09]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. This is the kind of attitude. It\u2019s like, yeah, we can fucking figure this out.<\/p>\n<p>[00:47:14]\u00a0<strong>Paul:<\/strong>\u00a0The grandparents.<\/p>\n<p>[00:47:15]\u00a0<strong>Ramit:<\/strong>\u00a0Yes.<\/p>\n<p>[00:47:16]\u00a0<strong>Paul:<\/strong>\u00a0They love buying.<\/p>\n<p>[00:47:17]\u00a0<strong>Ramit:<\/strong>\u00a0Bingo. Done. And you\u2019re like, by the way, can you also\u2013<\/p>\n<p>[00:47:20]\u00a0<strong>Morgan:<\/strong>\u00a0Take a cat.<\/p>\n<p>[00:47:20]\u00a0<strong>Ramit:<\/strong>\u00a0Make our car payment. Yeah, take a cat.<\/p>\n<p>[00:47:25]\u00a0<strong>Morgan:<\/strong>\u00a0Please, take them.<\/p>\n<p>[00:47:26]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. I don\u2019t know, guys. You\u2019re still at 82% here.<\/p>\n<p>[00:47:30]\u00a0<strong>Morgan:<\/strong>\u00a0I know.<\/p>\n<p>[00:47:34]\u00a0<strong>Ramit:<\/strong>\u00a0If you were at 71, 72, 73, even I\u2019d be like, okay, because you have childcare, but you\u2019re at 82%, and the debt\u2019s not going away. You\u2019re going to pay off your credit card debt, but now you have student loans. I can just tell you that 82% is not sustainable, and right now we\u2019re being pretty charitable here. There\u2019s no miscellaneous costs.<\/p>\n<p>[00:47:58]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:47:59]\u00a0<strong>Paul:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:47:59]\u00a0<strong>Ramit:<\/strong>\u00a0I don\u2019t know. What do you think?<\/p>\n<p>[00:48:14]\u00a0<strong>Paul:<\/strong>\u00a0Based on what we\u2019ve done here, we\u2019re going to have to live with the high fixed cost temporarily until we can drop some of those items like the debt, and then that line item would come out, and that\u2019s what we have to do.<\/p>\n<p>[00:48:36]\u00a0<strong>Ramit:<\/strong>\u00a0You know what\u2019s amazing? Each of you has had a moment of brilliance with your money. You realize that? Each of you.<\/p>\n<p>[00:48:43]\u00a0<strong>Morgan:<\/strong>\u00a0No.<\/p>\n<p>[00:48:44]\u00a0<strong>Ramit:<\/strong>\u00a0Paul, what was yours? When were you at your best with money?<\/p>\n<p>[00:48:50]\u00a0<strong>Paul:<\/strong>\u00a0Right before we had a kid.<\/p>\n<p>[00:48:52]\u00a0<strong>Ramit:<\/strong>\u00a0What was happening then?<\/p>\n<p>[00:48:54]\u00a0<strong>Paul:<\/strong>\u00a0I was putting a lot more away. And I also made a decision financially once Morgan got pregnant like, we need to save money, and we moved in with our parents to get rid of rent altogether.<\/p>\n<p>[00:49:11]\u00a0<strong>Ramit:<\/strong>\u00a0That was a big change.<\/p>\n<p>[00:49:12]\u00a0<strong>Morgan:<\/strong>\u00a0That was hard. That was hard. We did the max we could do there until we were like, we\u2019re losing our mind. We got to leave.<\/p>\n<p>[00:49:19]\u00a0<strong>Ramit:<\/strong>\u00a0You saved up enough for a 20% down payment, very impressive. Your moment of brilliance, Morgan, was when you said, I need to set up a separate account for child care because I\u2019m concerned that everything else is going to get spent.<\/p>\n<p>[00:49:32]\u00a0You moved heaven and earth to make that happen. You never missed a payment. What that tells me is that the two of you have the ability to make huge changes when it is important. Would you be both aligned with that?<\/p>\n<p>[00:49:47]\u00a0<strong>Paul:<\/strong>\u00a0Yeah, we have to.<\/p>\n<p>[00:49:50]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:49:51]\u00a0<strong>Ramit:<\/strong>\u00a0Nice. What if one of you comes and says like, I really want to go to this concert?<\/p>\n<p>[00:49:54]\u00a0<strong>Paul:<\/strong>\u00a0Then we call a grandparent and cry to them.<\/p>\n<p>[00:49:58]\u00a0<strong>Morgan:<\/strong>\u00a0I hate that. I think we need to change our behavior.<\/p>\n<p>[00:50:01]\u00a0<strong>Paul:<\/strong>\u00a0Say it. What would you do? He comes to you, he says, let\u2019s go to Fish.<\/p>\n<p>[00:50:04]\u00a0<strong>Morgan:<\/strong>\u00a0We\u2019d have to say no.<\/p>\n<p>[00:50:05]\u00a0<strong>Paul:<\/strong>\u00a0You\u2019d have to say no.<\/p>\n<p>[00:50:07]\u00a0<strong>Ramit:<\/strong>\u00a0Truthfully, for the next 18 to 24 months, not really. Life is what it is for the next couple of years while you pay this debt off. And the only thing I can do here today is to show you what will happen if you continue down this path. I can\u2019t make the changes for you. I can\u2019t shop at the grocery store for you. I can\u2019t do any of that. What I can show you is that if one of you loses your job for one month, that\u2019s it.<\/p>\n<p>[00:50:35]\u00a0<strong>Morgan:<\/strong>\u00a0We\u2019re done.<\/p>\n<p>[00:50:35]\u00a0<strong>Paul:<\/strong>\u00a0Totally.<\/p>\n<p>[00:50:37]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s end of story. You lose the house. Car\u2019s gone. Move in with family, if you\u2019re so lucky. Cats are gone, all of it. That\u2019s one month.<\/p>\n<p>[00:50:44]\u00a0<strong>Morgan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:50:45]\u00a0<strong>Paul:<\/strong>\u00a0Right.<\/p>\n<p>[00:50:46]\u00a0<strong>Ramit:<\/strong>\u00a0And let\u2019s not even talk about what your kids pick up from that experience when they\u2019re talking to me 30 years from now on this podcast. I don\u2019t want that.<\/p>\n<p>[00:50:56]\u00a0<strong>Morgan:<\/strong>\u00a0Sounds good.<\/p>\n<p>[00:50:57]\u00a0<strong>Paul:<\/strong>\u00a0Right.<\/p>\n<p>[00:50:58]\u00a0<strong>Ramit:<\/strong>\u00a0You think you can make these changes? They are quite large.<\/p>\n<p>[00:51:03]\u00a0<strong>Morgan:<\/strong>\u00a0I worry that we can\u2019t.<\/p>\n<p>[00:51:04]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:51:05]\u00a0<strong>Morgan:<\/strong>\u00a0But we have to create it, so there\u2019s no choice.<\/p>\n<p>[00:51:08]\u00a0<strong>Paul:<\/strong>\u00a0Yeah. We don\u2019t have another choice.<\/p>\n<p>[Narration]<\/p>\n<p>[00:51:14]\u00a0<strong>Ramit:<\/strong>\u00a0This was a tough conversation, and there weren\u2019t any easy answers. But that\u2019s actually to be expected. When you don\u2019t talk about money for years, you often leave yourself with your back against the wall. No easy answers are available.<\/p>\n<p>[00:51:29]\u00a0Now, this podcast is not about finding a magic solution to problems. Sometimes I see comments saying, it doesn\u2019t seem like Ramit was able to help them. I\u2019m not a magician. I\u2019m here to help couples talk about money, sometimes for the first time ever. I\u2019m here to help them find the truth.<\/p>\n<p>[00:51:46]\u00a0The truth is, some things just take a lot of hard work and a lot of time. Paul and Morgan can make a change, but it will take both of them talking about money in a totally different way. It means they have to talk about money regularly, positively, and proactively together. Now if the biggest thing that I did for them was to help them realize the severity of their situation, I\u2019ll be satisfied.<\/p>\n<p>[00:52:13]\u00a0Let\u2019s take a listen to their follow-ups, starting with Paul.<\/p>\n<p>[00:52:16]\u00a0<strong>Paul:<\/strong>\u00a0The most surprising thing about the conversation with Ramit was that Morgan and I are way more removed from each other\u2019s finances than I had imagined. Neither one of us knows what transactions are taking place and when they\u2019re taking place, or when they\u2019re anticipated take place within each other\u2019s accounts.<\/p>\n<p>[00:52:39]\u00a0The biggest takeaway from this is for Morgan and I to have regular conversations about our finances. Whether they\u2019re difficult conversations, they\u2019re still positive conversations if we\u2019re working toward a goal and trying to correct our finances in the short-term and the long-term.<\/p>\n<p>[00:53:04]\u00a0Changes we will be making to our conscious spending plan, definitely tightening up the fixed costs as much as we can, taking out anything additional for what we\u2019re trying to save toward home improvements and house maintenance, and really trying to put that stuff toward the debt and get the debt paid off as quick as possible. I would love to be out of credit card debt by this summer and Morgan student loan debt by beginning of next year.<\/p>\n<p>[00:53:33]\u00a0<strong>Ramit:<\/strong>\u00a0And now Morgan\u2019s follow-up.<\/p>\n<p>[00:53:34]\u00a0<strong>Morgan:<\/strong>\u00a0What surprised me most was just how difficult the conversation was for me. I knew it was going to be challenging. I didn\u2019t realize it was going to be as emotional for me. Ramit was really good at being very direct and getting to the root causes of everything very quickly, and he was able to really facilitate a really important and hard conversation between Paul and I.<\/p>\n<p>[00:53:59]\u00a0I left the meeting feeling very defeated and the next day feeling pretty hopeless. But after really sitting and reflecting, I\u2019m feeling more positive and hopeful that with these conversations and with time, Paul and I can really turn it around. And I think our Rich Life is definitely within reach.<\/p>\n<p>[00:54:18]\u00a0Some changes that we\u2019re going to make, we talked about meeting more regularly, especially in these beginning stages, weekly, twice a week. We also talked about selling the Acura, making some more lifestyle changes to get these fixed costs down. We\u2019re both working hard on finishing the book, changing our bank accounts around, changing our weird banking situation, and being more united as a team.<\/p>\n<p>[00:54:44]\u00a0<strong>Ramit:<\/strong>\u00a0They have some difficult changes to make, but I do have confidence that if they stick with it and they do it together that they can radically transform their relationship with money. Thanks for listening to today\u2019s conversation, and stay tuned for next week.<\/p>\n<p>[00:55:00]\u00a0<strong>Paul:<\/strong>\u00a0Working with Ramit was very intense. It\u2019s definitely very intentional and genuine, but he definitely got to the bottom of what the issues were and definitely put us out of our comfort zone to speak about certain issues and what needed to change.<\/p>\n<p>[00:55:21]\u00a0<strong>Morgan:<\/strong>\u00a0Working with Ramit, it was really hard. I\u2019m feeling exhausted, but it\u2019s almost like, I don\u2019t know, trying to think of a good analogy where you know it\u2019s going to be hard, but I\u2019m hoping that the payoff is really good. I really enjoyed his approach. It was no bullshit, and he held us accountable for what we needed to be held accountable for.<\/p>\n<p>[00:55:43]\u00a0<strong>Paul:<\/strong>\u00a0Knowing what the issues were and that there\u2019s no way to hide them, a third party looking at, they\u2019re going to pop out to that person, and he\u2019s going to call us out on it and hold us accountable. And that\u2019s exactly what he did.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ufeff In the second half of this live-recorded conversation with Paul and Morgan, 37 and 33, we dig deeper into their Conscious Spending Plan to uncover three cars (for two adults), sporadic debt management, high pet care costs, hidden student loans, and what seems like no way out from under it all. This episode is [&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-118910","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\/118910","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=118910"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118910\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}