{"id":118927,"date":"2024-02-13T13:20:22","date_gmt":"2024-02-13T17:20:22","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118927"},"modified":"2026-02-23T15:33:25","modified_gmt":"2026-02-23T19:33:25","slug":"143-tori-amy","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/143-tori-amy\/","title":{"rendered":"Episode 143. \u201cI maxed out my credit cards on our $45k wedding. Are we broke?\u201d"},"content":{"rendered":"<p><iframe title=\"\u201cI maxed out my credit cards on our $45k wedding\u201d\" src=\"https:\/\/www.youtube.com\/embed\/LrGF2QY1fUo\" 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\/4OS6IrHp3oRZ3Rb1AL6jPI?utm_source=generator\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Amy and Tori are in their late 20s. They recently got married and honeymooned in Greece, racking up tens of thousands of dollars in credit card debt. A brand new house, changing jobs, and influential backgrounds all come into play as they work on a plan to pay it down as quickly and comfortably as possible.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>AG1 | Take ownership of your health with AG1. Get one year\u2019s supply of Vitamin D3 K2 and five free AG1 travel packs with your first purchase at\u00a0<strong><a href=\"https:\/\/drinkag1.com\/ramit\">https:\/\/drinkAG1.com\/ramit<\/a><\/strong>.<\/p>\n<p>Babbel | Right now, when you purchase a 3-month Babbel subscription, you\u2019ll get an additional 3 months for FREE. Just go to\u00a0<strong><a href=\"https:\/\/babbel.com\/\">https:\/\/Babbel.com<\/a><\/strong>\u00a0and use promo code RAMIT.<\/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>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>Facet | Get affordable, accessible financial planning with a flat fee membership. For a limited time, the $250 enrollment fee will be waived when you sign up at\u00a0<strong><a href=\"https:\/\/facet.com\/ramit\">https:\/\/facet.com\/ramit<\/a><\/strong>.<\/p>\n<h2><strong>Tools mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.iwillteachyoutoberich.com\/l-money-made-easy\/\">Money Made Easy Mini Course<\/a><\/li>\n<li><a href=\"https:\/\/www.iwillteachyoutoberich.com\/landing-conscious-spending\/\">Conscious Spending Plan<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p>[00:00:05]\u00a0<strong>Amy:<\/strong>\u00a0There were definitely a couple of times where I had $10,000 in my savings account and then frivolously drained it. That\u2019s, I think, what freaks Tori out so much, is that when we first started dating, it is like Jekyll and freaking Hyde. It\u2019s two different people. Like last week, we brought in, truly $5,000 just in one week, and she still felt super guilty about, I don\u2019t know, I think we maybe spent $75 on a date. It definitely feels sometimes like a divided effort, not a united effort.<\/p>\n<p>[00:00:35]\u00a0<strong>Tori:<\/strong>\u00a0It is stressful, very stressful.<\/p>\n<p>[00:00:38]\u00a0<strong>Ramit:<\/strong>\u00a0If one of you were to become injured for three months and you couldn\u2019t bring in any income, what would happen?<\/p>\n<p>[00:00:44]\u00a0<strong>Tori:<\/strong>\u00a0I think we would lose everything. Credit cards are already completely maxed out. We would have to either sell or rent the house. And then God forbid, emergency bills and all that that comes with it. Yeah. In some deep\u00a0shit,\u00a0that\u2019s for sure. I could cry right now, honestly.<\/p>\n<p>[Narration]<\/p>\n<p>[00:01:00]\u00a0<strong>Ramit:<\/strong>\u00a0Meet Amy and Tori. Amy\u2019s 28. Tori\u2019s 27. They\u2019re recently married, and suddenly they feel like they are drowning with their finances. We\u2019re\u00a0going to\u00a0start at how they got married and how they spent tens of thousands of dollars on their wedding and put it on a credit card. Listen to what happened next.<\/p>\n<p>[Interview]<\/p>\n<p>[00:01:20]\u00a0<strong>Amy:<\/strong>\u00a0Our wedding was approaching and we were feeling the stress financially.<\/p>\n<p>[00:01:26]\u00a0<strong>Ramit:<\/strong>\u00a0How many months out was your wedding when you wrote this application?<\/p>\n<p>[00:01:30]\u00a0<strong>Amy:<\/strong>\u00a0Our whole wedding planning process was only four months.<\/p>\n<p>[00:01:33]\u00a0<strong>Ramit:<\/strong>\u00a0Well, I guess since it\u2019s only four months, you might as well just take me back to the beginning.<\/p>\n<p>[00:01:36]\u00a0<strong>Amy:<\/strong>\u00a0Okay.<\/p>\n<p>[00:01:36]\u00a0<strong>Ramit:<\/strong>\u00a0What happened?<\/p>\n<p>[00:01:38]\u00a0<strong>Amy:<\/strong>\u00a0I had recently quit my job, so I went on a trip with my mom, and I fell in love with this wedding venue. So we\u2019d been engaged for a year and a half. We hadn\u2019t really been planning anything. And then this wedding venue spoke to me. I called Tori while I was out of town. I was like, would it be crazy if we got married in September this year? She was like, no, that\u2019s not crazy. I\u2019m like, perfect. And within a week of that tour, they sent a contract to us.<\/p>\n<p>[00:02:08]\u00a0<strong>Ramit:<\/strong>\u00a0How much was the contract for?<\/p>\n<p>[00:02:10]\u00a0<strong>Amy:<\/strong>\u00a0Just the venue, it was about 25,000.<\/p>\n<p>[00:02:13]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Is that what you expected?<\/p>\n<p>[00:02:16]\u00a0<strong>Amy:<\/strong>\u00a0For me, yes, because I have a degree in events. So I think I\u2019m also very desensitized to how much events cost. So I knew that it was like venue cost, food and beverage, open bar. I was thinking about all the things that we wouldn\u2019t have to spend the money on because it was all included with the venue. So to me it felt super logical, and I had a lot of hope for more contribution from family.<\/p>\n<p>[00:02:40]\u00a0<strong>Tori:<\/strong>\u00a0I didn\u2019t think that it was actually going to get to the contract part. I was like, ah, this is kind of going to flop. I was like, this is just her being super excited, coming home. She saw the place for the first time, so I just thought she was just super excited. And then there was a contract.<\/p>\n<p>[00:02:59]\u00a0<strong>Ramit:<\/strong>\u00a0All right, so you signed the contract. What happened next?<\/p>\n<p>[00:03:04]\u00a0<strong>Amy:<\/strong>\u00a0I\u2019d say, from my perspective, we started reaching out to family to gauge how much they were going to be able to contribute. I know very specifically what I expected and how I pitched it. I was like, if my parents do 10 to 15 and my grandparents do five and then each of your aunts and uncles are able to do two to three, I felt that that would cover the majority. And then I was also like, if we do a registry that\u2019s only cash funds and we don\u2019t ask for gifts\u2013 we were only doing 50 guests, so I was like, if our 30 friends contribute a hundred dollars each, then that averages 30,000. So I added it all up and I was like, I feel we\u2019ll have about 30,000.<\/p>\n<p>[00:03:54]\u00a0<strong>Ramit:<\/strong>\u00a0We\u2019re going to make a profit off this one.<\/p>\n<p>[00:03:56]\u00a0<strong>Amy:<\/strong>\u00a0Well, no, because I knew like the venue wasn\u2019t the only cost.<\/p>\n<p>[00:03:59]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, true.<\/p>\n<p>[00:04:01]\u00a0<strong>Amy:<\/strong>\u00a0I hoped that that would be covered and then everything else would only be our problem.<\/p>\n<p>[00:04:06]\u00a0<strong>Ramit:<\/strong>\u00a0So you were thinking 25 to 30k from family, and how did family end up contributing?<\/p>\n<p>[00:04:15]\u00a0<strong>Amy:<\/strong>\u00a0Maybe like 10,000.<\/p>\n<p>[00:04:17]\u00a0<strong>Tori:<\/strong>\u00a015.<\/p>\n<p>[00:04:19]\u00a0<strong>Amy:<\/strong>\u00a015.<\/p>\n<p>[00:04:20]\u00a0<strong>Tori:<\/strong>\u00a0Yeah, I\u2019d say 15.<\/p>\n<p>[00:04:21]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s a lot of money, right?<\/p>\n<p>[00:04:22]\u00a0<strong>Tori:<\/strong>\u00a0It is a lot.<\/p>\n<p>[00:04:25]\u00a0<strong>Ramit:<\/strong>\u00a0All right, so you were expecting 25, you got 15. What happened next?<\/p>\n<p>[00:04:30]\u00a0<strong>Amy:<\/strong>\u00a0It just as weddings do, was more than we could have anticipated, so it fell on us. And in such a short timeframe too. I feel like when people are getting married and they plan a year or two years out, those deposits don\u2019t stack up like that. It felt like we owed someone $5,000 every week or two.<\/p>\n<p>[00:04:54]\u00a0<strong>Ramit:<\/strong>\u00a0All right. And the 35k that you both discussed. Where\u2019d you come up with that number? Uh-oh, got quiet.<\/p>\n<p>[00:05:05]\u00a0<strong>Amy:<\/strong>\u00a0I think just observed averages. It wasn\u2019t really based on anything about us.<\/p>\n<p>[00:05:17]\u00a0<strong>Ramit:<\/strong>\u00a0Well, I observed that billionaires have multiple mansions in multiple cities, as well as multiple private jets. So should I use that as my guideline?<\/p>\n<p>[00:05:28]\u00a0<strong>Amy:<\/strong>\u00a0No.<\/p>\n<p>[00:05:29]\u00a0<strong>Ramit:<\/strong>\u00a0Oh. All right. So you just picked 35k out of the air.<\/p>\n<p>[00:05:36]\u00a0<strong>Amy:<\/strong>\u00a0Pretty honestly, I think so.<\/p>\n<p>[00:05:37]\u00a0<strong>Tori:<\/strong>\u00a0I\u2019ll go into it bit deeper because I feel like we knew we could at least put 25 on credit cards. We were like, we know we at least have that.<\/p>\n<p>[00:05:47]\u00a0<strong>Ramit:<\/strong>\u00a0What, what, what? Wait, that\u2019s not the direction I thought that sentence was going to go. You know you can at least put 25. Is that because your credit card limit was 25?<\/p>\n<p>[00:05:58]\u00a0<strong>Tori:<\/strong>\u00a0That\u2019s the limit that we had, and we were okay, maybe family could put towards the rest. It was not thought out, I will say. I mean, it was thought out, but it wasn\u2019t really written down and we didn\u2019t stick to it.<\/p>\n<p>[00:06:13]\u00a0<strong>Amy:<\/strong>\u00a0it wasn\u2019t saved before.<\/p>\n<p>[00:06:15]\u00a0<strong>Tori:<\/strong>\u00a0No.<\/p>\n<p>[00:06:16]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:06:17]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:06:17]\u00a0<strong>Ramit:<\/strong>\u00a0Bills started piling up. You signed the contract, now you\u2019ve got more stuff to sign. And then what were you feeling at that moment, Amy?<\/p>\n<p>[00:06:25]\u00a0<strong>Amy:<\/strong>\u00a0Overwhelmed, in over our heads, like we were drowning.<\/p>\n<p>[00:06:28]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm.<\/p>\n<p>[00:06:29]\u00a0<strong>Amy:<\/strong>\u00a0And just like it was an inevitable drowning from how close the contracts were. Again, let\u2019s say that you booked your wedding a year out. Maybe you would only lose a $5,000 deposit and call it a day. But for us it was such a quick turnaround that there was too much to lose, to not move forward.<\/p>\n<p>[00:06:52]\u00a0So I was like, okay, now what do we do with this knowing that we\u2019re going to be under this wave? I feel like I was calling out for help before drowning and hoping that someone would pull us out.<\/p>\n<p>[00:07:03]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm. How much did you end up spending total for the wedding?<\/p>\n<p>[00:07:06]\u00a0<strong>Amy:<\/strong>\u00a0I\u2019d have to look at the budget again because I think we stopped updating it a month out.<\/p>\n<p>[00:07:13]\u00a0<strong>Ramit:<\/strong>\u00a0Because you just know it\u2019s horrible. And at a certain point, I don\u2019t even want to look at how much it\u2019s costing because we know that it\u2019s way more than what we talked about two, three months ago, six months ago.<\/p>\n<p>[00:07:24]\u00a0<strong>Amy:<\/strong>\u00a0Yeah. If I pulled up our wedding app right now, I could tell you what it was as of probably a month before, but I think it would end up being maybe 5,000 more than that.<\/p>\n<p>[00:07:37]\u00a0<strong>Ramit:<\/strong>\u00a0Sorry, you said the magic words, if you pulled\u2013 pull it up. Let\u2019s see it. Hold that thing up to the camera. What app is this, by the way?<\/p>\n<p>[00:07:44]\u00a0<strong>Amy:<\/strong>\u00a0Zola.<\/p>\n<p>[00:07:45]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Tell us a number and then we add 5,000 to it. Go ahead. What do you got?<\/p>\n<p>[00:07:49]\u00a0<strong>Amy:<\/strong>\u00a0Okay. Hang on.<\/p>\n<p>[00:07:50]\u00a0<strong>Ramit:<\/strong>\u00a0She goes, if I pulled it up, like it\u2019s the most unlikely thing in the world. I\u2019m like, get that app out. Let\u2019s go.<\/p>\n<p>[00:07:58]\u00a0<strong>Amy:<\/strong>\u00a0Okay. Let\u2019s see.<\/p>\n<p>[00:07:59]\u00a0<strong>Tori:<\/strong>\u00a0Oh God.<\/p>\n<p>[00:08:02]\u00a0<strong>Amy:<\/strong>\u00a0So it was at 44,000?<\/p>\n<p>[00:08:07]\u00a0<strong>Ramit:<\/strong>\u00a0Whoa. Okay, 44.<\/p>\n<p>[00:08:09]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:08:10]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh. And what do we see beneath it?<\/p>\n<p>[00:08:12]\u00a0<strong>Amy:<\/strong>\u00a0So venue was 6,650, food and beverage, 18,000 photographer, 3,100, florist\u2013 I will say I\u2019m really proud of how we saved money on our florals. It was only $1,000.<\/p>\n<p>[00:08:26]\u00a0<strong>Ramit:<\/strong>\u00a0Wow.<\/p>\n<p>[00:08:27]\u00a0<strong>Amy:<\/strong>\u00a0Our minimum quote for florals was six. Violinist, 375; hair and makeup, 750; wedding planner, 2,000; videographer, 3,500; flight, 200; saxophone, we didn\u2019t end up paying for it, but someone paid for it from our family at 600. Rentals, we didn\u2019t have to do. Cake and dessert was included with the venue. Officiant, our family member did. So that might be\u2013 oh, then there\u2019s more. Invitations, 100. This is what\u2019s in there.<\/p>\n<p>[00:09:04]\u00a0<strong>Ramit:<\/strong>\u00a0I think we get it. So 44. Did that number surprise you?<\/p>\n<p>[00:09:07]\u00a0<strong>Amy:<\/strong>\u00a0Yeah, because I stopped looking at this, but I will say this is actually, I\u2019d say if it\u2019s off, maybe by 1,000 or two. It\u2019s pretty up to date.<\/p>\n<p>[00:09:17]\u00a0<strong>Ramit:<\/strong>\u00a0Should we add another 5,000 to it?<\/p>\n<p>[00:09:20]\u00a0<strong>Amy:<\/strong>\u00a0I\u2019d say two.<\/p>\n<p>[00:09:21]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So 45,000, let\u2019s just say. 45,000. All right.<\/p>\n<p>[00:09:27]\u00a0<strong>Tori:<\/strong>\u00a0That\u2019s a lot. That\u2019s not what I wanted to spend for sure.<\/p>\n<p>[00:09:32]\u00a0<strong>Ramit:<\/strong>\u00a0How did you pay for it?<\/p>\n<p>[00:09:34]\u00a0<strong>Amy:<\/strong>\u00a0Where we could, credit cards, and when we needed cash money, it was all of our resources.<\/p>\n<p>[00:09:44]\u00a0<strong>Ramit:<\/strong>\u00a0What is that? Savings?<\/p>\n<p>[00:09:46]\u00a0<strong>Amy:<\/strong>\u00a0No, just as we made money, we threw it at vendors.<\/p>\n<p>[00:09:52]\u00a0<strong>Ramit:<\/strong>\u00a0Oh.<\/p>\n<p>[00:09:53]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:09:54]\u00a0<strong>Ramit:<\/strong>\u00a0How much credit card debt did you walk out of the wedding with?<\/p>\n<p>[00:09:58]\u00a0<strong>Amy:<\/strong>\u00a045,000 for me, but I wouldn\u2019t say that\u2019s all from the wedding now. It\u2019s also\u2013<\/p>\n<p>[00:10:05]\u00a0<strong>Ramit:<\/strong>\u00a0A little thing called interest.<\/p>\n<p>[00:10:07]\u00a0<strong>Amy:<\/strong>\u00a0And called not having a 9-5 and steady income and then focusing all the way on the wedding.<\/p>\n<p>[Narration]<\/p>\n<p>[00:10:13]\u00a0<strong>Ramit:<\/strong>\u00a0What you just heard is incredibly common with large purchases. I\u2019m talking about weddings, travel, houses. I did this myself. I had a number for our wedding. Remember, I had been saving for over a decade before I even met my wife. When it came to the wedding, I knew that we wanted to have a beautiful, big wedding with all of our family.<\/p>\n<p>[00:10:33]\u00a0And accordingly, I gave myself a healthy margin of error because everybody told me, take your wedding budget and double it. Well, in my case, it was more than that, and by the end I simply stopped looking at it. And I wrote a book on money. What\u2019s the lesson here? The answer is to acknowledge that you and me and all of us are mostly the same.<\/p>\n<p>[00:10:59]\u00a0Forget that phrase personal finance is personal. A better phrase is most of us are mostly the same. Once you internalize that, you\u2019re\u00a0going to\u00a0start planning for all the predictably large expenses you have coming up in the next 20 years. And what\u2019s important is to also add a healthy margin of error because once you start to overspend on these things, and you will overspend, because, again, most of us are mostly the same, you\u2019ll have money set aside, and even an extra $5,000 or $10,000 in unexpected expenses will not cripple you.<\/p>\n<p>[00:11:34]\u00a0Of course, this means you have to know your numbers, and it means that you probably need to economize on certain things today so you can feel comfortable tomorrow.<\/p>\n<p>[00:11:44]\u00a0We\u2019ll be right back.<\/p>\n<p>[00:11:45]\u00a0Now back to the episode.<\/p>\n<p>[00:11:47]\u00a0With Amy and Tori, there were just a few other clues that really stood out to me. They put their wedding on a credit card, which is insane. Do not do that. Amy left her job during wedding planning. Wedding planning is one of the most expensive times in a couple\u2019s lives. Bad move. And finally, they didn\u2019t save or plan ahead.\u00a0They just booked a venue because it spoke to her.<\/p>\n<p>[Interview]<\/p>\n<p>[00:12:08]\u00a0<strong>Ramit:<\/strong>\u00a0How was the wedding, by the way?<\/p>\n<p>[00:12:09]\u00a0<strong>Tori:<\/strong>\u00a0It was amazing.<\/p>\n<p>[00:12:10]\u00a0<strong>Amy:<\/strong>\u00a0Beautiful.<\/p>\n<p>[00:12:11]\u00a0<strong>Ramit:<\/strong>\u00a0All right. I love a good wedding, and I love talking to couples. And a beautiful wedding is a beautiful thing. Every anniversary we look back at our photos and videos and we see things that we didn\u2019t even know were going on at our wedding, and we love it. So congratulations to you.<\/p>\n<p>[00:12:31]\u00a0<strong>Amy:<\/strong>\u00a0Thank you.<\/p>\n<p>[00:12:32]\u00a0<strong>Ramit:<\/strong>\u00a0So you walked out of there with roughly 40,000 or so of credit card debt. When did you realize?<\/p>\n<p>[00:12:42]\u00a0<strong>Tori:<\/strong>\u00a0I would say on our honeymoon.<\/p>\n<p>[00:12:45]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019d you go?<\/p>\n<p>[00:12:46]\u00a0<strong>Tori:<\/strong>\u00a0We went to Greece.<\/p>\n<p>[00:12:47]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Is that included in the 40k?<\/p>\n<p>[00:12:50]\u00a0<strong>Amy:<\/strong>\u00a0No.<\/p>\n<p>[00:12:50]\u00a0<strong>Ramit:<\/strong>\u00a0How much did that cost? That\u2019s so interesting.<\/p>\n<p>[00:12:55]\u00a0<strong>Tori:<\/strong>\u00a0It is interesting.<\/p>\n<p>[00:12:56]\u00a0<strong>Amy:<\/strong>\u00a0Well, that is part of my credit card debt. Yes. But that wasn\u2019t part of the wedding budget. 10,000, let\u2019s say. Maybe eight, accommodations.<\/p>\n<p>[00:13:09]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s never lower. It\u2019s always higher than you think.<\/p>\n<p>[00:13:13]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:13:14]\u00a0<strong>Ramit:<\/strong>\u00a0All right, let\u2019s say 10k. So 45k for the wedding. 10k for the honeymoon. That\u2019s 55k. What else?<\/p>\n<p>[00:13:22]\u00a0<strong>Tori:<\/strong>\u00a0I\u2019d say eating out. That was definitely\u2013<\/p>\n<p>[00:13:25]\u00a0<strong>Amy:<\/strong>\u00a0While we were on the honeymoon. So yeah, we were definitely thinking and talking about money as we were flying home.<\/p>\n<p>[00:13:33]\u00a0<strong>Tori:<\/strong>\u00a0It definitely got rough. Yeah, we were stressed.<\/p>\n<p>[00:13:35]\u00a0<strong>Ramit:<\/strong>\u00a0What happened specifically when you were flying home? What do you remember?<\/p>\n<p>[00:13:40]\u00a0<strong>Tori:<\/strong>\u00a0I just remember us being super on edge, just not wanting to eat out, very conscious of spending.<\/p>\n<p>[00:13:49]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Anything else we\u2019re missing here? You got the wedding. I\u2019m talking about everything related to matrimonials, wedding, honeymoon. Go ahead.<\/p>\n<p>[00:14:00]\u00a0<strong>Tori:<\/strong>\u00a0We just bought a house.<\/p>\n<p>[00:14:01]\u00a0<strong>Amy:<\/strong>\u00a0A year and three months ago.<\/p>\n<p>[00:14:03]\u00a0<strong>Ramit:<\/strong>\u00a0And when did you leave your job, Amy?<\/p>\n<p>[00:14:07]\u00a0<strong>Amy:<\/strong>\u00a0May this year. We got into the house September, 2022, left my job, May, 2023, planned the wedding two months after leaving the job. And then got married September, 2023.<\/p>\n<p>[00:14:20]\u00a0<strong>Ramit:<\/strong>\u00a0All right, that\u2019s a lot of change in one year.<\/p>\n<p>[00:14:23]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:14:25]\u00a0<strong>Ramit:<\/strong>\u00a0How much were you making at your old job?<\/p>\n<p>[00:14:27]\u00a0<strong>Amy:<\/strong>\u00a060,000.<\/p>\n<p>[00:14:28]\u00a0<strong>Ramit:<\/strong>\u00a0All right. And as an entrepreneur, in the last 12 months, or since you left, when you came back from the honeymoon, how much did you make?<\/p>\n<p>[00:14:36]\u00a0<strong>Amy:<\/strong>\u00a0Say 1,500 a month on average. 7,000 total. And September was a complete wash, like $0 in September.<\/p>\n<p>[00:14:45]\u00a0<strong>Ramit:<\/strong>\u00a0All right. You took a huge pay cut basically becoming an entrepreneur.<\/p>\n<p>[00:14:47]\u00a0<strong>Amy:<\/strong>\u00a0For sure.<\/p>\n<p>[00:14:48]\u00a0<strong>Ramit:<\/strong>\u00a0All right, fine.<\/p>\n<p>[00:14:49]\u00a0<strong>Tori:<\/strong>\u00a0So I was a firefighter. I was making pretty good living, nothing too crazy.<\/p>\n<p>[00:14:56]\u00a0<strong>Ramit:<\/strong>\u00a0What does that mean?<\/p>\n<p>[00:14:58]\u00a0<strong>Tori:<\/strong>\u00a0How much was I making?<\/p>\n<p>[00:15:01]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:15:01]\u00a0<strong>Tori:<\/strong>\u00a0I think around 60,000.<\/p>\n<p>[00:15:03]\u00a0<strong>Amy:<\/strong>\u00a0Firefighting was not making 60,000. I can tell you that right now.<\/p>\n<p>[00:15:07]\u00a0<strong>Ramit:<\/strong>\u00a0What was it making?<\/p>\n<p>[00:15:08]\u00a0<strong>Amy:<\/strong>\u00a0She was taking home $1,600 every two weeks. Yeah. I think we used to say your salary was about 40,000.<\/p>\n<p>[00:15:18]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. Okay.<\/p>\n<p>[00:15:20]\u00a0<strong>Amy:<\/strong>\u00a0Big difference.<\/p>\n<p>[00:15:21]\u00a0<strong>Tori:<\/strong>\u00a0That\u2019s right. That\u2019s right. Thank you, babe. I appreciate that.<\/p>\n<p>[00:15:23]\u00a0<strong>Ramit:<\/strong>\u00a0So we got to talk about this house.<\/p>\n<p>[00:15:26]\u00a0<strong>Tori:<\/strong>\u00a0We paid all of our debt off. We were very strict. We wrote smart goals. Every week we\u2019re budgeting. We got what we wanted, and as soon as we started to get in the house, she was just like, all right. Like, woo, we\u2019re done. We got the house. And I think finances just started\u2013 They weren\u2019t as strict anymore. Once we got into the house, it was a little bit more lenient, I think, because we finally achieved our goal.<\/p>\n<p>[00:16:00]\u00a0<strong>Ramit:<\/strong>\u00a0Let me ask a couple of questions. How did you decide how much you could afford for your house?<\/p>\n<p>[00:16:06]\u00a0<strong>Amy:<\/strong>\u00a0What is the process when you go to get a house? They tell you what you can afford. That\u2019s how.<\/p>\n<p>[00:16:12]\u00a0<strong>Ramit:<\/strong>\u00a0Oh,\u00a0shit. What\u2019d they tell you?<\/p>\n<p>[00:16:14]\u00a0<strong>Amy:<\/strong>\u00a0360. Mm-hmm.<\/p>\n<p>[00:16:17]\u00a0<strong>Ramit:<\/strong>\u00a0All right. That\u2019s not bad. Back in the day, they would\u2019ve proved you for $1.1 million. Yeah. This\u00a0shit\u00a0is crazy.<\/p>\n<p>[00:16:25]\u00a0<strong>Amy:<\/strong>\u00a0Thank God they didn\u2019t do that.<\/p>\n<p>[00:16:26]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. All right. 360, not bad, whoever your broker was. So you said sounds great. I\u2019ll go ahead and take that loan. What was the interest rate you got?<\/p>\n<p>[00:16:36]\u00a0<strong>Amy:<\/strong>\u00a0Yeah, I\u2019d like to get into that. We are in a new construction home. So one thing that we certainly didn\u2019t know is that when you go under contract, your interest rate is not locked.<\/p>\n<p>[00:16:51]\u00a0<strong>Ramit:<\/strong>\u00a0Right.<\/p>\n<p>[00:16:51]\u00a0<strong>Tori:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:16:52]\u00a0<strong>Amy:<\/strong>\u00a0We were very much unaware of that.<\/p>\n<p>[00:16:55]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:16:55]\u00a0<strong>Amy:<\/strong>\u00a0And we were very much, I think, naive to the idea of interest rates going up quickly, so we went under contract November, 2021. The interest rate at the time was 3.75.<\/p>\n<p>[00:17:06]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:17:07]\u00a0<strong>Amy:<\/strong>\u00a0Our mortgage payment was supposed to be 2,400. At the time, we were paying 1800, in our one-bedroom apartment, so we were like, okay, $600 more to own it, three bedrooms, da, da, da. By the time that we were able to actually lock our interest rate, it had just been going up by 0.25% monthly. So now we\u2019re at 5%.<\/p>\n<p>[00:17:34]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s the payment per month now? Used to be 2,400, right?<\/p>\n<p>[00:17:38]\u00a0<strong>Amy:<\/strong>\u00a0Was supposed to be, never was.<\/p>\n<p>[00:17:39]\u00a0<strong>Ramit:<\/strong>\u00a0Supposed to be. Right, right. And how much are you paying now?<\/p>\n<p>[00:17:42]\u00a0<strong>Amy:<\/strong>\u00a0Yeah. The mortgage is 2,970, and then the HOA is 200.<\/p>\n<p>[00:17:47]\u00a0<strong>Ramit:<\/strong>\u00a0Oh damn.<\/p>\n<p>[00:17:48]\u00a0<strong>Amy:<\/strong>\u00a0We only saw prices going higher. I don\u2019t know if you can remember November, 2021, but the way it felt, something about the vibes in November, 2021\u2013<\/p>\n<p>[00:17:58]\u00a0<strong>Tori:<\/strong>\u00a0It was like, hurry up and get your house now.<\/p>\n<p>[00:18:00]\u00a0<strong>Amy:<\/strong>\u00a0Literally, I don\u2019t know, and maybe it was our friend. It truly felt like everyone was talking about it. If you don\u2019t get in now, it\u2019s just going to be way more expensive. So it felt urgent.<\/p>\n<p>[00:18:12]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So let me see if I get this straight. Amy, you left your full-time job, became an entrepreneur, took a huge pay cut. You both spent $55,000 on your wedding and honeymoon. And then you have this house which is costing way more than you thought every single month. Okay.<\/p>\n<p>[00:18:28]\u00a0<strong>Tori:<\/strong>\u00a0Yes.<\/p>\n<p>[00:18:28]\u00a0<strong>Amy:<\/strong>\u00a0Yes.<\/p>\n<p>[00:18:28]\u00a0<strong>Tori:<\/strong>\u00a0You missed one.<\/p>\n<p>[00:18:29]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, tell me.<\/p>\n<p>[00:18:31]\u00a0<strong>Tori:<\/strong>\u00a0I left firefighting as well prior to her leaving.<\/p>\n<p>[00:18:36]\u00a0<strong>Ramit:<\/strong>\u00a0Oh.<\/p>\n<p>[00:18:37]\u00a0<strong>Tori:<\/strong>\u00a0So left both left our jobs.<\/p>\n<p>[00:18:38]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019d you leave to do?<\/p>\n<p>[00:18:39]\u00a0<strong>Tori:<\/strong>\u00a0Before this I was a barber, so I actually went back to doing hair.<\/p>\n<p>[00:18:44]\u00a0<strong>Ramit:<\/strong>\u00a0How much did you make?<\/p>\n<p>[00:18:45]\u00a0<strong>Tori:<\/strong>\u00a0I was making 48,000.<\/p>\n<p>[00:18:47]\u00a0<strong>Amy:<\/strong>\u00a0I knew we were going to be in debt. I didn\u2019t know how much at the time. Now all of my credit cards are maxed out. I think Tori\u2019s. We were kind of living off of mine and it\u2019s literally not possible now.<\/p>\n<p>[00:19:04]\u00a0<strong>Tori:<\/strong>\u00a0We\u2019re trying to find what is the best thing to do because at this point now, I think we are suffering. We have no credit cards to lean on. There\u2019s nothing to lean on. We have limited amount of resources as far as income coming in. We\u2019ve tried what we can, like we stopped eating out, and little things like that, so we are just really looking for help.<\/p>\n<p>[00:19:26]\u00a0<strong>Ramit:<\/strong>\u00a0What does it feel like when you talk about money today with each other?<\/p>\n<p>[00:19:30]\u00a0<strong>Tori:<\/strong>\u00a0It is stressful, very stressful. I think we just get so frustrated because I think we know how much debt we\u2019re in and we don\u2019t know how to fix it, and we don\u2019t have much income coming in to save us. We\u2019re not asking family because we already asked them. So I think we get frustrated at each other.<\/p>\n<p>[00:19:51]\u00a0<strong>Amy:<\/strong>\u00a0It definitely feels sometimes like a divided effort, not a united effort. And it sucks.<\/p>\n<p>[Narration]<\/p>\n<p>[00:19:56]\u00a0<strong>Ramit:<\/strong>\u00a0There\u2019s not a lot of planning going on here. It seems quite impulsive.\u00a0\u00a0The honeymoon they described is what really got me. If you find yourself on a trip and you\u2019re on edge because of how much the freaking shrimp cocktail cost, you have taken a very wrong turn.<\/p>\n<p>[00:20:15]\u00a0\u00a0By the time you take a major trip, if you\u2019re following the I Will Teach You to Be Rich system, you should have already been planning it for months or over a year. You should have been putting money into a specific savings account named Greece Honeymoon.\u00a0You should have done an 85% estimation of the costs and then added 15% on top for things you did not anticipate.<\/p>\n<p>[00:20:37]\u00a0But you should never, ever get to a restaurant on vacation and worry about the price of a dish. If you do that, that is a haunting reminder to you that you got your planning wrong. And whether it\u2019s a pasta dish or whether it\u2019s buying a house you can\u2019t afford, it\u2019s very important for you to know that you can live a rich life if you plan ahead.<\/p>\n<p>[Interview]<\/p>\n<p>[00:21:02]\u00a0<strong>Ramit:<\/strong>\u00a0I understand the mechanics. You both left your jobs. You bought a house. You got married. I get that. Do you know why all of that happened?<\/p>\n<p>[00:21:12]\u00a0<strong>Amy:<\/strong>\u00a0Firefighting was making her miserable. And so as her partner, I\u2019m like, you deserve to not feel that way. The moment that we closed on the house, literally that day, she left firefighting. I feel like I got pushed off of a cliff at my 9-5 where it was just becoming a toxic work environment, and I felt like I physically couldn\u2019t stay there anymore.<\/p>\n<p>[00:21:34]\u00a0I knew in the back of my mind that the wise thing to do before leaving your 9-5 was to have three months saved up and no debt and all these things. We were not in the ideal position for me to leave my job, but it just felt no longer livable to be there. But definitely the wedding was a frivolous, impulsive choice that put us way deeper down.<\/p>\n<p>[00:21:59]\u00a0<strong>Ramit:<\/strong>\u00a0Talk to me about that. Why did it happen?<\/p>\n<p>[00:22:04]\u00a0<strong>Amy:<\/strong>\u00a0Just excitement, honestly. We got engaged March, 2022, and we started planning right away. We wanted to get married in Greece, and then we had family that said they couldn\u2019t travel. I just could no longer see the vision of getting married. I was like, okay, if it\u2019s not Greece, I don\u2019t want it. So I think the fact that I was able to envision getting married anywhere again made me so excited that I just was like, let\u2019s go, nose dive.<\/p>\n<p>[00:22:39]\u00a0<strong>Ramit:<\/strong>\u00a0Tori, what about you?<\/p>\n<p>[00:22:40]\u00a0<strong>Tori:<\/strong>\u00a0I don\u2019t want to say I wasn\u2019t ready for the wedding. When it came to the wedding, I was definitely more so like, I know this is not feasible right now. We just bought a home. I don\u2019t want to have this right now.<\/p>\n<p>[00:22:54]\u00a0<strong>Ramit:<\/strong>\u00a0Did you say that? Did you say that to her?<\/p>\n<p>[00:22:56]\u00a0<strong>Tori:<\/strong>\u00a0I did. I did.<\/p>\n<p>[00:22:58]\u00a0<strong>Ramit:<\/strong>\u00a0And then what happened?<\/p>\n<p>[00:23:01]\u00a0<strong>Tori:<\/strong>\u00a0It was like things were just going so quickly. I wanted, I don\u2019t want to say my\u2013 I don\u2019t know say this. We were both really excited for the wedding, but I knew in the back of my head, and I don\u2019t think I spoke up as well as I should have. I think in that time I really should have stood on my own two feet and just said, hey, we are not having this.<\/p>\n<p>[00:23:25]\u00a0We are not in the financial position. We do not have a lot of income coming in. No, this is not happening. She was really, really excited, and so I was like, okay, you\u2019re a planner. We\u2019ve done this before with the house. It\u2019s all worked out. You have a background in planning, and you\u2019re good with money. So I think this would be a good idea. But in the back of my head, I knew that we did not have the financial means to go that far.<\/p>\n<p>[00:23:56]\u00a0<strong>Ramit:<\/strong>\u00a0Because saying no would make you what?<\/p>\n<p>[00:24:01]\u00a0<strong>Tori:<\/strong>\u00a0Would make me look bad. It would make me look bad, and I just feel like\u2013 I didn\u2019t want her to be sad. I didn\u2019t want her to feel like we couldn\u2019t do it.<\/p>\n<p>[00:24:13]\u00a0<strong>Ramit:<\/strong>\u00a0Saying no about money, will that make Amy sad?<\/p>\n<p>[00:24:16]\u00a0<strong>Tori:<\/strong>\u00a0No. I don\u2019t know. I don\u2019t know. I didn\u2019t want to crush her bubble.<\/p>\n<p>[00:24:26]\u00a0<strong>Ramit:<\/strong>\u00a0And then the house, why\u2019d you buy the house?<\/p>\n<p>[00:24:29]\u00a0<strong>Tori:<\/strong>\u00a0Good question.<\/p>\n<p>[00:24:30]\u00a0<strong>Amy:<\/strong>\u00a0To stop wasting money on rent is what it felt like at the time.<\/p>\n<p>[00:24:33]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on, hold on. I\u2019m about to rip off my skin off and devil is going to come out right now. Hold on a second. Editors, make sure we get this. You\u2019re going to show my real side here. You were wasting $1,800 a month on rent going nowhere, building no\u2013 finish the sentence for me please.<\/p>\n<p>[00:24:53]\u00a0<strong>Tori:<\/strong>\u00a0No home, no equity.<\/p>\n<p>[00:24:56]\u00a0<strong>Ramit:<\/strong>\u00a0No equity. Can\u2019t find a nickel after 30 years. All of your peers are\u00a0fucking\u00a0rich. They own country clubs all because they started by buying one single family home. That\u2019s the American dream. You have to build equity.<\/p>\n<p>[00:25:12]\u00a0<strong>Amy:<\/strong>\u00a0At the time, my credit score was 800. I was making a comfy 60,000. She was in a steady job. I had $25,000 saved and counting.<\/p>\n<p>[00:25:25]\u00a0<strong>Ramit:<\/strong>\u00a0Can I ask a question? Because you said that we did it with the house and things worked out, but the house is costing you hundreds of thousands of dollars more than you thought it would.<\/p>\n<p>[00:25:38]\u00a0<strong>Tori:<\/strong>\u00a0Right.<\/p>\n<p>[00:25:40]\u00a0<strong>Ramit:<\/strong>\u00a0Did it work out?<\/p>\n<p>[00:25:41]\u00a0<strong>Tori:<\/strong>\u00a0I would say no. Everything I see now, no.<\/p>\n<p>[00:25:47]\u00a0<strong>Ramit:<\/strong>\u00a0At each step, it was just like turning the temperature up a little bit until it started boiling. And you didn\u2019t realize what was happening along the\u2013 am I correct? I don\u2019t mean to put words in your mouth. There wasn\u2019t necessarily a vision. It was a lot of escaping from something bad, AKA jobs.<\/p>\n<p>[00:26:10]\u00a0It was, oh my God, everyone\u2019s talking about this. I don\u2019t want to miss out, FOMO. Let\u2019s go. And where do we get our information? We get it from the broker or the lender, the last places we should get information from. And the wedding, it\u2019s like, oh\u00a0shit, we signed the contract. We got to go.<\/p>\n<p>[00:26:28]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:26:28]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:26:28]\u00a0<strong>Ramit:<\/strong>\u00a0Less of a vision, more reactive. I want to add a layer to that, which is affordability, because the worst thing financially speaking in a situation like this to be house poor. For example, how often did you use to eat out and how often do you eat out now? Look at those big smiles.<\/p>\n<p>[00:26:48]\u00a0<strong>Tori:<\/strong>\u00a0We used to eat out and go on dates all the time.<\/p>\n<p>[00:26:51]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:26:52]\u00a0<strong>Ramit:<\/strong>\u00a0And now?<\/p>\n<p>[00:26:53]\u00a0<strong>Tori:<\/strong>\u00a0May once a month. Now we really don\u2019t go out. We can\u2019t afford it.<\/p>\n<p>[00:26:57]\u00a0<strong>Amy:<\/strong>\u00a0And the mentality around it is we don\u2019t deserve\u2013 she used the words the other day, we don\u2019t deserve.<\/p>\n<p>[00:27:04]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-oh, puritanical penance. Y\u2019all made a mistake. You followed the American law and now just the da da da part of that American dream is you rush into huge financial decisions without thinking them through, and then you spend the rest of your life doing penance feeling guilty about it.<\/p>\n<p>[00:27:23]\u00a0<strong>Amy:<\/strong>\u00a0Last week we brought in truly $5,000 just in one week. It was like the best. Both of us had the best week that we\u2019ve had financially in both of our businesses, and she still felt super guilty about, I don\u2019t know, I think we maybe spent $75 on a date.<\/p>\n<p>[00:27:41]\u00a0<strong>Ramit:<\/strong>\u00a0Tori, I\u2019m curious about your money upbringing.<\/p>\n<p>[00:27:46]\u00a0Tori:\u00a0Okay.<\/p>\n<p>[00:27:46]\u00a0Ramit:\u00a0If you had to describe it in a word or two, what would you say?<\/p>\n<p>[00:27:49]\u00a0<strong>Tori:<\/strong>\u00a0Money was actually not a topic in the household at all. If my parents were to talk about money or speak about money, it would say, hey, we\u2019re having a grown-up conversation. You need to leave the room.<\/p>\n<p>[00:28:01]\u00a0<strong>Ramit:<\/strong>\u00a0Whoa. Wow. So you weren\u2019t exposed to it. That\u2019s an adults\u2019 topic. And what other phrases did your parents say about money?<\/p>\n<p>[00:28:10]\u00a0<strong>Tori:<\/strong>\u00a0Money is evil.<\/p>\n<p>[00:28:12]\u00a0<strong>Ramit:<\/strong>\u00a0Ooh.<\/p>\n<p>[00:28:14]\u00a0<strong>Tori:<\/strong>\u00a0Yeah. Very poor mindsets for sure around money.<\/p>\n<p>[00:28:21]\u00a0<strong>Ramit:<\/strong>\u00a0What else?<\/p>\n<p>[00:28:22]\u00a0<strong>Tori:<\/strong>\u00a0The people at the top can get a little greedy, things like that.<\/p>\n<p>[00:28:27]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh. Are they religious?<\/p>\n<p>[00:28:28]\u00a0<strong>Tori:<\/strong>\u00a0They are. They were.<\/p>\n<p>[00:28:31]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, okay. They were. All right. And as you got older into adolescence, you became a teenager, what do you remember about money in your family?<\/p>\n<p>[00:28:41]\u00a0<strong>Tori:<\/strong>\u00a0Both of my parents passed away, so I did not have a clear foundation on money, even getting in college, taxes, things like that. So I really had to learn that myself and with the people around me, which were as young as I was, so that was extremely difficult.<\/p>\n<p>[00:28:58]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm. And were there moments where you remember your parents being elated about money, or stressed out about money, or other emotional arcs?<\/p>\n<p>[00:29:10]\u00a0<strong>Tori:<\/strong>\u00a0Yes, my mom was very stressed out about money. At a point in time, we were sleeping in our van.<\/p>\n<p>[00:29:20]\u00a0<strong>Ramit:<\/strong>\u00a0What? How old were you?<\/p>\n<p>[00:29:22]\u00a0<strong>Tori:<\/strong>\u00a0I think I was about 10.<\/p>\n<p>[00:29:25]\u00a0<strong>Ramit:<\/strong>\u00a0You remember this?<\/p>\n<p>[00:29:26]\u00a0<strong>Tori:<\/strong>\u00a0Yes, I remember this.<\/p>\n<p>[00:29:27]\u00a0<strong>Ramit:<\/strong>\u00a0And you mentioned that you remember your mom being stressed out about money then. What was she saying?<\/p>\n<p>[00:29:33]\u00a0<strong>Tori:<\/strong>\u00a0Crying, very emotional, just very poor mindset, saying she wants to be able to provide for her kids, and things like that, and she\u2019s not able to do that. Yeah.<\/p>\n<p>[00:29:47]\u00a0<strong>Ramit:<\/strong>\u00a0Do you ever get emotional about money?<\/p>\n<p>[00:29:51]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:29:52]\u00a0<strong>Ramit:<\/strong>\u00a0You do?<\/p>\n<p>[00:29:53]\u00a0<strong>Tori:<\/strong>\u00a0I could cry right now, honestly.<\/p>\n<p>[00:29:55]\u00a0<strong>Ramit:<\/strong>\u00a0What! If you need to cry, cry. It\u2019s a safe space here. But I have to say I\u2019m surprised by your answer because in our time together, I haven\u2019t noticed you being particularly emotional about money. You\u2019ve both shared some tough stuff you\u2019re going through. So when you say you get emotional about money, what are those times when you do?<\/p>\n<p>[00:30:20]\u00a0<strong>Tori:<\/strong>\u00a0It\u2019s more about like when I have money, I try to keep it and hold onto it. I think lately what\u2019s really been getting in and Amy is she\u2019s very optimistic and like, everything will be fine. And like, no. I go back to the time of thinking that I was living in a van, so I\u2019m like, I don\u2019t want to go back there.<\/p>\n<p>[00:30:47]\u00a0<strong>Ramit:<\/strong>\u00a0Right. It\u2019s totally natural. When you discuss big moves, like cutting your incomes, or buying a house, or signing a contract for a wedding, it seems to me that that must feel pretty uncomfortable for you.<\/p>\n<p>[00:31:06]\u00a0<strong>Tori:<\/strong>\u00a0Yeah, it is. Extremely.<\/p>\n<p>[00:31:08]\u00a0<strong>Ramit:<\/strong>\u00a0Do you speak up?<\/p>\n<p>[00:31:12]\u00a0<strong>Tori:<\/strong>\u00a0I do, but I don\u2019t think I have a say sometimes.<\/p>\n<p>[00:31:19]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh. Why that?<\/p>\n<p>[00:31:21]\u00a0<strong>Tori:<\/strong>\u00a0I don\u2019t know why. I don\u2019t know if it\u2019s because of like, well, now I\u2019m realizing this is an adult conversation, so I just don\u2019t feel like I have much of a say.<\/p>\n<p>[00:31:35]\u00a0<strong>Ramit:<\/strong>\u00a0Still feel like you\u2019re sitting at the little kid\u2019s table, right?<\/p>\n<p>[00:31:38]\u00a0<strong>Tori:<\/strong>\u00a0Right. Exactly.<\/p>\n<p>[00:31:39]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re an adult. You\u2019re a married adult, in a marriage, living in a house that you bought with your wife. Amy, what do you think when you hear this?<\/p>\n<p>[00:31:53]\u00a0<strong>Amy:<\/strong>\u00a0I never realized that. Yeah, that\u2019s a very interesting connection. And there\u2019s definitely times where I wish that, like with the wedding, for example, if it had been approached in a gentle manner, I think I would\u2019ve been really receptive to it. I think I needed [Inaudible], but it was just tiptoeing.<\/p>\n<p>[00:32:21]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, lot of tiptoeing. I agree.<\/p>\n<p>[00:32:23]\u00a0<strong>Amy:<\/strong>\u00a0Yeah. I definitely want her to feel comfortable, in a nice, respectful, gentle manner. I think we\u2019ve both learned a lot from this, but if there\u2019s something where she feels strongly that it\u2019s a no and I\u2019m in the clouds, I want her to be able to say, hey, babe, I know you\u2019re really excited about this and I\u2019m also excited about this thing, but it\u2019s not feasible.<\/p>\n<p>[00:32:48]\u00a0Here are the repercussions that could happen from it. Because, for example, with the wedding, I don\u2019t think I would\u2019ve taken it as, oh, she doesn\u2019t want to marry me. It wouldn\u2019t have necessarily hurt my feelings. It would\u2019ve hurt my ego for a minute, for sure. We could have slept on it and talked about it and been okay.<\/p>\n<p>[00:33:08]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. How about you, Tori? What do you feel hearing that from Amy?<\/p>\n<p>[00:33:14]\u00a0<strong>Tori:<\/strong>\u00a0I feel good. I feel like we\u2019re finally getting to a place where I feel like we can maybe start really talking about money.<\/p>\n<p>[00:33:24]\u00a0<strong>Amy:<\/strong>\u00a0I\u2019d never made the connection of why she didn\u2019t feel as comfortable to speak up, so it helps me to know how to approach future things. I have some financial trauma unrelated to family too.<\/p>\n<p>[Narration]<\/p>\n<p>[00:33:42]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, if I had heard that last exchange as 22-year-old Ramit, the part where Tori said she doesn\u2019t feel like she can speak up about money, even though she\u2019s a grown adult, I would\u2019ve rolled my eyes. Younger Ramit would\u2019ve said, grow up. You\u2019re an adult. It\u2019s your responsibility to speak up. Otherwise, you don\u2019t get a complaint about all the bad things that happen to you.<\/p>\n<p>[00:34:03]\u00a0But let me tell you why I think about things a little differently now. Tori has gone through a lot. She lived in a van for God\u2019s sake. Is it fair to have the same expectations for someone who grew up with this difficult relationship with money? They\u2019ve both made some poor financial decisions and now they\u2019re paying for it. But this reminds me of that phrase, would you rather be right, or would you rather be married?<\/p>\n<p>[00:34:26]\u00a0Amy isn\u2019t here to lob got yous at her wife. They\u2019re married. She could actually help Tori a lot by creating a space and gently nudging her to speak up, to ask for what she wants, and to slowly take responsibility. And Tori should recognize that her passivity isn\u2019t serving her and candidly make it a top priority for her to work on,\u00a0whether that\u2019s getting a coach, a therapist, and or taking the initiative on money conversations in the household.<\/p>\n<p>[00:34:56]\u00a0Now, it might take more time to encourage an uninterested partner to speak up and get involved. It will definitely feel frustrating at first, but that\u2019s what loving partners do.<\/p>\n<p>[00:35:07]\u00a0We\u2019ll be right back.<\/p>\n<p>[00:35:09]\u00a0Now back to Amy and Tori.<\/p>\n<p>[Interview]<\/p>\n<p>[00:35:11]\u00a0<strong>Ramit:<\/strong>\u00a0Amy, what do you remember about money growing up in your family?<\/p>\n<p>[00:35:15]\u00a0<strong>Amy:<\/strong>\u00a0Nothing negative. If there was any financial stress, I wasn\u2019t really aware of it. I was raised just by my mom until I was 10, but my grandparents were super involved, so it was like if my mom had to go to work, I\u2019d be at my grandparents\u2019 house. She got into an apartment just us two when I was five. She bought her first house by herself. She had me really young, so she bought her first house by herself when I was eight or nine, which means she was 25. It was built from scratch too. I remember going after school in my uniform and taking progress photos.<\/p>\n<p>[00:35:49]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. Was she proud?<\/p>\n<p>[00:35:52]\u00a0<strong>Amy:<\/strong>\u00a0For sure.<\/p>\n<p>[00:35:53]\u00a0<strong>Ramit:<\/strong>\u00a0How do you know that? What did she say or do to make you instantly say yes?<\/p>\n<p>[00:35:58]\u00a0<strong>Amy:<\/strong>\u00a0How often we would go check on it.<\/p>\n<p>[00:36:01]\u00a0<strong>Ramit:<\/strong>\u00a0Aha.<\/p>\n<p>[00:36:01]\u00a0<strong>Amy:<\/strong>\u00a0Yeah. And how much she would just want to see the progress of it. And then she met my stepdad a year or two after we got in the house and she ended up selling it because he had a bigger house. So she sold it and she still to this day talks about how that was a big mistake. She wishes that she would\u2019ve kept it. I could have lived there. She could have rented it out. We drive past it every Christmas.<\/p>\n<p>[00:36:27]\u00a0<strong>Ramit:<\/strong>\u00a0She jokingly, but half jokingly, mentions that she regrets selling it.<\/p>\n<p>[00:36:34]\u00a0<strong>Amy:<\/strong>\u00a0Not jokingly, very much like, this is my advice to you.<\/p>\n<p>[00:36:37]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, the advice is buy a house and don\u2019t sell it? Is that what it is?<\/p>\n<p>[00:36:42]\u00a0<strong>Amy:<\/strong>\u00a0Essentially. I don\u2019t think she would want us to be house poor forever in order to keep a house, but she must have not had a issue to pay for it. So she\u2019s, I think, saying like it\u2019s a good investment and something that she knows she could have had to this day and paid off by this point.<\/p>\n<p>[00:36:58]\u00a0<strong>Ramit:<\/strong>\u00a0All right. What else happened as you got older and became a teenager? What do you remember about money in that family?<\/p>\n<p>[00:37:06]\u00a0<strong>Amy:<\/strong>\u00a0My parents had BMWs, big house.<\/p>\n<p>[00:37:11]\u00a0<strong>Ramit:<\/strong>\u00a0Whoa.<\/p>\n<p>[00:37:12]\u00a0<strong>Amy:<\/strong>\u00a0Yeah, they bought me a car when I was 16.<\/p>\n<p>[00:37:15]\u00a0<strong>Ramit:<\/strong>\u00a0What kind of car?<\/p>\n<p>[00:37:16]\u00a0<strong>Amy:<\/strong>\u00a0A Toyota Corolla.<\/p>\n<p>[00:37:18]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s a very nice car.<\/p>\n<p>[00:37:19]\u00a0<strong>Amy:<\/strong>\u00a0A 2008 in 2008.<\/p>\n<p>[00:37:21]\u00a0<strong>Ramit:<\/strong>\u00a0I love that model.<\/p>\n<p>[00:37:22]\u00a0<strong>Amy:<\/strong>\u00a0What I love that they did was I got a job when I was 16 and so they really encouraged me because they were like, every dollar that you save will match.<\/p>\n<p>[00:37:32]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. So they were quite savvy with money.<\/p>\n<p>[00:37:36]\u00a0<strong>Amy:<\/strong>\u00a0I feel like they did it really well. Every dollar that I had saved went to college. I don\u2019t have any student loans.<\/p>\n<p>[00:37:44]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s cool.<\/p>\n<p>[00:37:44]\u00a0<strong>Amy:<\/strong>\u00a0And then I also had scholarships.<\/p>\n<p>[00:37:46]\u00a0<strong>Ramit:<\/strong>\u00a0Sweet. Love it. All right, great. When you graduated from college, what was going on with money for you? Talking early 20s here.<\/p>\n<p>[00:37:58]\u00a0<strong>Amy:<\/strong>\u00a0Yeah. I graduated six months after I came back from study abroad and I was broke as a joke. And actually, you\u2019re a therapist for me. No, now that I think back to it, there were a couple of times, and I know I\u2019ve said this to you, Tori, but I didn\u2019t think about it, but there were definitely a couple of times where I had $10,000 in my savings account and then frivolously drained it.<\/p>\n<p>[00:38:25]\u00a0That\u2019s, I think, what freaks story out so much is that when we first started dating. It is like Jekyll and freaking Hyde. It\u2019s two different people. I would spend on my Amex for two weeks and then I would pay it off and then I would spend on my Visa for two weeks and then I would pay it off. I never had outstanding balances.<\/p>\n<p>[00:38:46]\u00a0<strong>Tori:<\/strong>\u00a0You never had a debit card.<\/p>\n<p>[Narration]<\/p>\n<p>[00:38:48]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019ve made the comparison of finances and fitness many times before. As someone who\u2019s gone through my own major fitness journey, I\u2019ve had to confront my own invisible scripts and to get a lot of help from other people to change the way I feel about fitness and to change my own behaviors around fitness.<\/p>\n<p>[00:39:05]\u00a0It\u2019s for that reason that I can recognize so much of what Amy\u2019s saying. What I hear is a lot of yo-yoing. For some people this happens with their food, with some their spending. There are a lot of emotional reasons, including shame at play. There\u2019s math involved, and there are often biological factors at play too.<\/p>\n<p>[00:39:25]\u00a0One thing that stands out to me is how sporadic and episodic or spending is. It\u2019s a lot of saving and then a sudden amount of spending. A lot of people who have struggled with their weight will recognize the very same pattern. The solution, of course, is not to simply try harder. It is to have a powerful, specific vision of why you want to change, and then it\u2019s about getting help.<\/p>\n<p>[00:39:49]\u00a0It definitely involves creating systems that encourage your success. Now, I have to admit this is actually a lot easier with money than with food and fitness. With money, I can set up automatic savings and investing so the money flows right\u00a0out of\u00a0my paycheck. That\u2019s Chapter 5 of my book, I Will Teach You to Be Rich.<\/p>\n<p>[00:40:09]\u00a0I wish I could automate my workouts. I wish. I mention this because in the last few years it\u2019s become taboo to talk about food and fitness and finances. But as someone who\u2019s changed my own life around fitness and food, it was incredibly challenging. It was really hard, and it\u2019s one of the things that I am most proud of. And it\u2019s why I have a lot of empathy for people who struggle with their health or who struggle with their money.<\/p>\n<p>[Interview]<\/p>\n<p>[00:40:36]\u00a0<strong>Ramit:<\/strong>\u00a0What do you think\u2019s going on when you\u2019ve got money sitting in a savings account and then on a recurring basis it seems to go? Your savings account is not building. It\u2019s actually being depleted every few years. What\u2019s going on there?<\/p>\n<p>[00:40:50]\u00a0<strong>Amy:<\/strong>\u00a0In the past, I don\u2019t know. It\u2019s not like I had a big 10,000-dollar goal and I emptied it out for that.<\/p>\n<p>[00:40:58]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:40:59]\u00a0<strong>Amy:<\/strong>\u00a0I think it felt like a safety net. And at my young age, at the time, 19, 22, it just felt like, hey, good for me. I got money in my account. I don\u2019t have any major thing to spend it on.<\/p>\n<p>[00:41:11]\u00a0<strong>Ramit:<\/strong>\u00a0At 22, I get it. It\u2019s a little different. And people are not really thinking ahead that much with their finances and the fact that you had that much in your savings, great. What\u2019s up with this financial trauma that you mentioned?<\/p>\n<p>[00:41:22]\u00a0<strong>Amy:<\/strong>\u00a0I had an ex steal from me twice or three times.<\/p>\n<p>[00:41:26]\u00a0<strong>Ramit:<\/strong>\u00a0What? What happened?<\/p>\n<p>[00:41:29]\u00a0<strong>Amy:<\/strong>\u00a0The first time that I noticed he had somehow cashed my tax return check.<\/p>\n<p>[00:41:37]\u00a0<strong>Ramit:<\/strong>\u00a0What? For how much?<\/p>\n<p>[00:41:40]\u00a0<strong>Amy:<\/strong>\u00a0900, which at the time felt a lot. It is.<\/p>\n<p>[00:41:43]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s a lot of money.<\/p>\n<p>[00:41:43]\u00a0<strong>Amy:<\/strong>\u00a0But it felt like a lot.<\/p>\n<p>[00:41:45]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So then what happened?<\/p>\n<p>[00:41:49]\u00a0<strong>Amy:<\/strong>\u00a0We broke up, got back together, and then he used my credit card, my personal credit card for a few off and on charges that I didn\u2019t notice because they were so small. And then what the big kicker was that he used my, at the time, corporate credit card.<\/p>\n<p>[00:42:04]\u00a0<strong>Ramit:<\/strong>\u00a0Whoa. Holy\u00a0shit. Hold on. First off, when he was buying these little purchases, what was he buying? Like corn nuts? What are we talking about?<\/p>\n<p>[00:42:15]\u00a0<strong>Amy:<\/strong>\u00a0Well, the big one that stood out was Hooters.<\/p>\n<p>[00:42:20]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s not that subtle.<\/p>\n<p>[00:42:24]\u00a0<strong>Amy:<\/strong>\u00a0It was not. That was when I noticed that\u2013<\/p>\n<p>[00:42:27]\u00a0<strong>Ramit:<\/strong>\u00a0Dude, if you\u2019re going to you\u2019re going to\u2013 look, Ramit\u2019s safety advice for all the thieves out there who are trying to steal from your girlfriends, go ahead and don\u2019t go to Hooters on that stolen credit card. What do you say? Any place but Hooters.<\/p>\n<p>[00:42:42]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:42:43]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. All right. And then what did he charge up on the corporate card?<\/p>\n<p>[00:42:47]\u00a0<strong>Amy:<\/strong>\u00a0It was Ubers. Accounting called me into their office one day, and I only used my corporate card when I would travel for conferences, so that would be once a month maybe. So if I wasn\u2019t traveling, my corporate card was in my wallet, in my closet. It wasn\u2019t even on me. They call me into the office and they\u2019re like, hey, super gentle, I think you accidentally used your Amex for Uber.<\/p>\n<p>[00:43:12]\u00a0We\u2019re going to take it out out of your paycheck. Just wanted to let you know. And I just immediately was like, okay. So I took all his\u00a0shit\u00a0out of a the house, changed the locks the same night. It felt like being cheated on.<\/p>\n<p>[00:43:26]\u00a0<strong>Ramit:<\/strong>\u00a0Would you like to share a message with him. Say whatever you like. Go ahead. What do you want to tell him? You don\u2019t have to, but the airwaves are yours.<\/p>\n<p>[00:43:39]\u00a0<strong>Amy:<\/strong>\u00a0Just that I\u2019m a really nice person for not reporting him to the IRS.<\/p>\n<p>[00:43:45]\u00a0<strong>Ramit:<\/strong>\u00a0True.<\/p>\n<p>[00:43:45]\u00a0<strong>Tori:<\/strong>\u00a0Or she came to the dark side. She changed teams on you, buddy.<\/p>\n<p>[00:43:54]\u00a0<strong>Ramit:<\/strong>\u00a0And Amy, what happened to allow you to not feel that sense of scarcity and betrayal anymore?<\/p>\n<p>[00:44:03]\u00a0<strong>Amy:<\/strong>\u00a0I think the level of commitment that we\u2019re in and probably bits of therapy, but I think really the level of commitment and just trying to have a mindset of, it doesn\u2019t need to be 50-50, it\u2019s just who wants to, who can, what makes the most sense for both of us, especially pre-debt. It was just, hey, I\u2019ve got it. Don\u2019t worry about it, and vice versa.<\/p>\n<p>[00:44:29]\u00a0<strong>Ramit:<\/strong>\u00a0Got you. Glad to hear that you\u2019ve seen therapist. Are you currently seeing one now?<\/p>\n<p>[00:44:36]\u00a0<strong>Tori:<\/strong>\u00a0No.<\/p>\n<p>[00:44:37]\u00a0<strong>Ramit:<\/strong>\u00a0No. How come?<\/p>\n<p>[00:44:40]\u00a0<strong>Amy:<\/strong>\u00a0We can\u2019t really afford it. We went on Tori\u2019s firefighter health insurance, the same therapist who we know and love was 30 or $35 a session. And then when Tori left fire, we used my corporate insurance, and it was $90 a session, which we were still doing. And then without insurance, when we both left our 9-5s, it was 135, which we did a couple of times and now we haven\u2019t been since before the wedding. But yeah, we want to go back.<\/p>\n<p>[00:45:11]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. I hate to hear that the prices are so high and your expenses are so high that you can\u2019t do that because it\u2019s important for your relationship. Let\u2019s see what we can do. Why don\u2019t we take a look at your numbers and let\u2019s see what we find out. Tori, why don\u2019t you read off the words in bold and the numbers next to them? Let\u2019s go through your net worth numbers here.<\/p>\n<p>[00:45:34]\u00a0<strong>Tori:<\/strong>\u00a0We got our assets,\u00a0current value of the car, home, property, and businesses.<\/p>\n<p>[00:45:39]\u00a0<strong>Ramit:<\/strong>\u00a0How much is it?<\/p>\n<p>[00:45:41]\u00a0<strong>Tori:<\/strong>\u00a0450,000.<\/p>\n<p>[00:45:46]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, great.<\/p>\n<p>[00:45:47]\u00a0<strong>Tori:<\/strong>\u00a0401k on retirement, all investments, 0.<\/p>\n<p>[00:45:50]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:45:51]\u00a0<strong>Tori:<\/strong>\u00a0Savings, 0.<\/p>\n<p>[00:45:53]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:45:53]\u00a0<strong>Tori:<\/strong>\u00a0Debts, student loans, credit cards debts, mortgages\u2013 I don\u2019t know why I\u2019m over here scared. Sorry, I don\u2019t know why I\u2019m getting so nervous.<\/p>\n<p>[00:46:12]\u00a0<strong>Ramit:<\/strong>\u00a0Go ahead, say it out loud.<\/p>\n<p>[00:46:16]\u00a0<strong>Tori:<\/strong>\u00a0424,065.<\/p>\n<p>[00:46:19]\u00a0<strong>Ramit:<\/strong>\u00a0$424,065. All right. What\u2019s your total net worth?<\/p>\n<p>[00:46:24]\u00a0<strong>Tori:<\/strong>\u00a025,935.<\/p>\n<p>[00:46:26]\u00a0<strong>Ramit:<\/strong>\u00a0All right.<\/p>\n<p>[00:46:28]\u00a0<strong>Tori:<\/strong>\u00a0Hmm.<\/p>\n<p>[00:46:30]\u00a0<strong>Ramit:<\/strong>\u00a0What do you think of those numbers?<\/p>\n<p>[00:46:33]\u00a0<strong>Amy:<\/strong>\u00a0It\u2019s not negative.<\/p>\n<p>[00:46:35]\u00a0<strong>Tori:<\/strong>\u00a0It\u2019s not negative but it\u2019s not the best.<\/p>\n<p>[00:46:38]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:46:39]\u00a0<strong>Amy:<\/strong>\u00a0Not more than I had before we got the house.<\/p>\n<p>[00:46:42]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:46:43]\u00a0<strong>Ramit:<\/strong>\u00a0Right, right, right. Just so we confirm the debt, Amy, you have $44,000 on credit card debt. Tori, you have $17,000 in credit card debt, and your mortgage is $362,000. Right?<\/p>\n<p>[00:47:02]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:47:02]\u00a0<strong>Tori:<\/strong>\u00a0Correct.<\/p>\n<p>[00:47:03]\u00a0<strong>Ramit:<\/strong>\u00a0Any other debt? Student loans?<\/p>\n<p>[00:47:07]\u00a0<strong>Tori:<\/strong>\u00a0I do have student loans way back when for high school. I think it\u2019s 13,000.<\/p>\n<p>[00:47:14]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m going to add that because we need to.<\/p>\n<p>[00:47:17]\u00a0<strong>Tori:<\/strong>\u00a0Okay.<\/p>\n<p>[00:47:18]\u00a0<strong>Ramit:<\/strong>\u00a0So $424,065 plus $13,000 is $437,000. So your total net worth is about $13,000. All right. Let\u2019s look at the income. This time Amy. Go ahead and give me your combined gross monthly income.<\/p>\n<p>[00:47:47]\u00a0<strong>Amy:<\/strong>\u00a0$10,411.<\/p>\n<p>[00:47:49]\u00a0<strong>Ramit:<\/strong>\u00a0All right. What do you think about that number?<\/p>\n<p>[00:47:52]\u00a0<strong>Amy:<\/strong>\u00a0I think that\u2019s the minimum that we need to exist.<\/p>\n<p>[00:47:57]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. And if we just multiply that by 12, you make $125,000 a year as a household. Okay. All right, let\u2019s keep working our way down. Your fixed costs, Amy, what is this number here? Combined fixed cost number. What does that number say?<\/p>\n<p>[00:48:14]\u00a0<strong>Amy:<\/strong>\u00a089%. Not even close to ideal.<\/p>\n<p>[00:48:19]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s pretty high.<\/p>\n<p>[Narration]<\/p>\n<p>[00:48:20]\u00a0<strong>Ramit:<\/strong>\u00a0Just a reminder, I recommend that this number is anywhere between 50 to 60%, depending on your age, your existing finances, and your income. You can get your own conscious spending plan template to calculate your fixed costs at iwt.com\/csp.<\/p>\n<p>[00:48:39]\u00a0\u00a0Now back to the show.<\/p>\n<p>[Interview]<\/p>\n<p>[00:48:40]\u00a0<strong>Ramit:<\/strong>\u00a0So let\u2019s break it down. Your mortgage is 2,940 a month, which is higher than you expected. You got your utilities at about 500 a month. So if we add both of those up, that\u2019s about 33% of your income.<\/p>\n<p>[00:48:57]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:48:59]\u00a0<strong>Ramit:<\/strong>\u00a0Of your gross income. I want to talk about this. It\u2019s really important. So there\u2019s this rule. It\u2019s called a rule, but it\u2019s really just a guideline of your total housing costs should be less than 28% of your gross income. In your case it\u2019s 33. It\u2019s a little higher than I would like, but if they had let\u2019s say a high income, could probably make it work. If they live in a high cost of living area, I can understand.<\/p>\n<p>[00:49:31]\u00a0<strong>Amy:<\/strong>\u00a0Doesn\u2019t feel like 33%. It feels like 80%.<\/p>\n<p>[00:49:35]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:49:36]\u00a0<strong>Amy:<\/strong>\u00a0Every month is challenging<\/p>\n<p>[00:49:38]\u00a0<strong>Ramit:<\/strong>\u00a0And so we go down to insurance at 227, no big deal. Car payment at zero. Love that. Love it. And then we go down to debt payments, and this is where it all becomes clear. So your monthly debt payments, Tori, what\u2019s that number you see here for the both of you that you\u2019re both spending?<\/p>\n<p>[00:49:58]\u00a0<strong>Tori:<\/strong>\u00a0$3,051.<\/p>\n<p>[00:50:01]\u00a0<strong>Ramit:<\/strong>\u00a0So right here, this is the ball game. Your housing costs are already high. Now, you could maybe pull it off, again, if you had a high income, if you had no car payment, which you do.<\/p>\n<p>[00:50:13]\u00a0<strong>Tori:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:50:13]\u00a0<strong>Ramit:<\/strong>\u00a0But if you have a high housing cost and high debt, you\u2019re effectively broke.<\/p>\n<p>[00:50:22]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:50:24]\u00a0<strong>Ramit:<\/strong>\u00a0You can\u2019t get out of that cycle. That is why you\u2019re feeling stressed. That\u2019s why you\u2019re feeling overwhelmed. That\u2019s why you\u2019re feeling disconnected about money.<\/p>\n<p>[00:50:33]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[Narration]<\/p>\n<p>[00:50:34]\u00a0<strong>Ramit:<\/strong>\u00a0This is what I love about the conscious spending plan. It allows you to surgically hone in on your expenses so you can instantly see what\u2019s working and what\u2019s not working. In their case, you can see that combination of housing expenses and debt mean that they don\u2019t have enough money. That\u2019s it. That\u2019s the answer.<\/p>\n<p>[00:50:51]\u00a0It\u2019s not Target. It\u2019s not some random knick-knack. This is the big win to focus on. And their financial situation is exacerbated by the variable income, the mounting interest. And one last thing that I notice, Tori\u2019s salon lease is accidentally included here. So when I remove that and adjust her income, suddenly their fixed costs are 99%.\u00a0They are truly broke<\/p>\n<p>[Interview]<\/p>\n<p>[00:51:21]\u00a0<strong>Ramit:<\/strong>\u00a0Your investments are at zero, so you\u2019re contributing zero to investments right now. It\u2019s a big red flag. Savings are at zero. In fact, let\u2019s go back and look at\u2013 you have $0 in savings. Holy\u00a0shit.\u00a0Just for a moment, I know we\u2019re focusing on the negative, but I just want to do this for a second. If one of you were to become injured for three months and you couldn\u2019t bring in any income, what would happen?<\/p>\n<p>[00:51:44]\u00a0<strong>Amy:<\/strong>\u00a0I can\u2019t even imagine. There would be no options.<\/p>\n<p>[00:51:52]\u00a0<strong>Tori:<\/strong>\u00a0I don\u2019t even want to think about it.<\/p>\n<p>[00:51:53]\u00a0<strong>Amy:<\/strong>\u00a0We\u2019d be winging it.<\/p>\n<p>[00:51:55]\u00a0<strong>Tori:<\/strong>\u00a0Oh my God. Yeah.<\/p>\n<p>[00:51:56]\u00a0<strong>Ramit:<\/strong>\u00a0I think winging it is a metaphor. Can you be more specific?<\/p>\n<p>[00:52:00]\u00a0<strong>Tori:<\/strong>\u00a0I think we would lose everything. Credit cards are already completely maxed out. There would be no paying the mortgage. We would have to either sell or rent the house. We would have no income to sustain I think just life in general. And then God forbid the emergency bills and all that that comes with it. Yeah.<\/p>\n<p>[00:52:26]\u00a0<strong>Ramit:<\/strong>\u00a0Amy?<\/p>\n<p>[00:52:27]\u00a0<strong>Tori:<\/strong>\u00a0In some deep\u00a0shit,\u00a0that\u2019s for sure.<\/p>\n<p>[00:52:29]\u00a0<strong>Ramit:<\/strong>\u00a0Amy, I noticed you have a bit of a look on your face. What\u2019s going through your mind right now?<\/p>\n<p>[00:52:36]\u00a0<strong>Amy:<\/strong>\u00a0Tori\u2019s thought is always like, sell the house and move in with your mom. I was waiting for her to say that.<\/p>\n<p>[00:52:42]\u00a0<strong>Ramit:<\/strong>\u00a0I think you wouldn\u2019t be able to pay your mortgage, wouldn\u2019t be able to pay for basic stuff, except maybe to pay a little bit off on the credit card and then run back up even more. It\u2019ll be catastrophic. That\u2019s just reality.<\/p>\n<p>[00:53:06]\u00a0<strong>Tori:<\/strong>\u00a0I would say for me a big thing has been\u2013 a big topic that I know we both do not like to talk about. I always say you know should we rent sell the home? I know that\u2019s a big chunk of change. So that\u2019s been a huge topic that I know we both hate to talk about because we love our home.<\/p>\n<p>[00:53:32]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, okay. So that\u2019s one of those topics that everyone walks on eggshells around.<\/p>\n<p>[00:53:38]\u00a0<strong>Tori:<\/strong>\u00a0Yes.<\/p>\n<p>[00:53:39]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. You don\u2019t even really bring it up because you know what the other person\u2019s going to do, and if even there\u2019s a whiff of it, things get tense. Right?<\/p>\n<p>[00:53:46]\u00a0<strong>Tori:<\/strong>\u00a0Mm-mm. Uh-huh. Yeah.<\/p>\n<p>[00:53:48]\u00a0<strong>Ramit:<\/strong>\u00a0All right. You have three bedrooms, right?<\/p>\n<p>[00:53:50]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:53:51]\u00a0<strong>Ramit:<\/strong>\u00a0Would you be open to sublet, or roommate, or something for the bedroom or no?<\/p>\n<p>[00:53:59]\u00a0<strong>Amy:<\/strong>\u00a0I think I\u2019d be open to a single roommate with no pet.<\/p>\n<p>[00:54:02]\u00a0<strong>Ramit:<\/strong>\u00a0Look, can I just show you something? If you were to get a roommate, I want to show you how that would affect your numbers, because at this stage it\u2019s really important to actually use some numbers in decision making. Okay?<\/p>\n<p>[00:54:12]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:54:13]\u00a0<strong>Ramit:<\/strong>\u00a0So how much would you make from an extra roommate?<\/p>\n<p>[00:54:19]\u00a0<strong>Amy:<\/strong>\u00a0I feel like 1,200 is fair.<\/p>\n<p>[00:54:23]\u00a0<strong>Ramit:<\/strong>\u00a01,200. All right.<\/p>\n<p>[00:54:24]\u00a0<strong>Tori:<\/strong>\u00a01,500. I would like at least 1,500<\/p>\n<p>[00:54:27]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m just going to keep it really easy just to show you the math. So let\u2019s go 3,291, which is Amy\u2019s net income, 3,291. I\u2019m going to add 1,500 to that. So that becomes 4,791. I\u2019m just going to plug it in instead of 3,291, it\u2019s now 4,791. Look at the fixed cost number. It\u2019s currently at 99%. I think that\u2019s high, but it\u2019s in the ballpark. It went down to 83%.<\/p>\n<p>[00:54:58]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:54:58]\u00a0<strong>Ramit:<\/strong>\u00a0In a way, it makes a difference. It definitely makes a difference, but it\u2019s not nearly enough.<\/p>\n<p>[00:55:05]\u00a0<strong>Amy:<\/strong>\u00a0One thing I should circle back to is the 9-5 job that I just got.<\/p>\n<p>[00:55:10]\u00a0<strong>Ramit:<\/strong>\u00a0You got a job.<\/p>\n<p>[00:55:12]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:55:12]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So you put the entrepreneurial thing on pause.<\/p>\n<p>[00:55:17]\u00a0<strong>Amy:<\/strong>\u00a0On less priority.<\/p>\n<p>[00:55:18]\u00a0<strong>Ramit:<\/strong>\u00a0Less priority, and you went and got a 9-5 job. Okay. How much\u2013<\/p>\n<p>[00:55:22]\u00a0<strong>Amy:<\/strong>\u00a0I start January 2nd.<\/p>\n<p>[00:55:23]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, is that reflected here in the income?<\/p>\n<p>[00:55:26]\u00a0<strong>Amy:<\/strong>\u00a0No,\u00a0because it wasn\u2019t\u00a0confirmed when we did this.<\/p>\n<p>[00:55:30]\u00a0<strong>Ramit:<\/strong>\u00a0Well, fantastic. Let\u2019s go ahead and update it.<\/p>\n<p>[00:55:32]\u00a0<strong>Amy:<\/strong>\u00a0I just signed the offer letter yesterday.<\/p>\n<p>[00:55:34]\u00a0<strong>Ramit:<\/strong>\u00a0Good job. How much?<\/p>\n<p>[00:55:36]\u00a0<strong>Amy:<\/strong>\u00a070,000.<\/p>\n<p>[00:55:37]\u00a0<strong>Ramit:<\/strong>\u00a0What the\u00a0fuck? All right, hold on. I\u2019m taking this roommate out because you\u2019re not getting a roommate. 70,000. Oh wow. That\u2019s pretty good. All right, so watch this. I\u2019m going to net you\u2019re at 4,200. It might be plus or minus a little bit, but again, we\u2019re being rough. Watch what happens to your fixed cost number. It goes from 99% to 89%. So it goes in the right direction.<\/p>\n<p>[00:56:03]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:56:04]\u00a0<strong>Ramit:<\/strong>\u00a0But?<\/p>\n<p>[00:56:05]\u00a0<strong>Tori:<\/strong>\u00a0It\u2019s still not enough.<\/p>\n<p>[00:56:07]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s not enough.<\/p>\n<p>[00:56:09]\u00a0<strong>Amy:<\/strong>\u00a0Yeah. My goal is to sustain the nine to five and still have stylings. Lately I\u2019ve been making, like last week I made 2,500 just in one week. Now I know that\u2019s not every week.<\/p>\n<p>[00:56:24]\u00a0<strong>Ramit:<\/strong>\u00a0How much are you going to make over the course of a year? Be conservative.<\/p>\n<p>[00:56:29]\u00a0<strong>Amy:<\/strong>\u00a0Even if it\u2019s $1,000 a month.<\/p>\n<p>[00:56:31]\u00a0<strong>Ramit:<\/strong>\u00a0All right.<\/p>\n<p>[00:56:32]\u00a0<strong>Amy:<\/strong>\u00a012,000.<\/p>\n<p>[00:56:34]\u00a0<strong>Ramit:<\/strong>\u00a0All right, let\u2019s do that. Again, let\u2019s just forget about taxes for the moment, and let\u2019s just say instead of 4,200, it\u2019s 5,200 a month. You\u2019re netting an extra $1,000 a month. Okay?<\/p>\n<p>[00:56:48]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:56:50]\u00a0<strong>Ramit:<\/strong>\u00a0Your fixed cost rate, 89%, they\u2019re down to 79%. What do you see, Amy?<\/p>\n<p>[00:57:00]\u00a0<strong>Amy:<\/strong>\u00a0Definitely some relief.<\/p>\n<p>[Narration]<\/p>\n<p>[00:57:01]\u00a0<strong>Ramit:<\/strong>\u00a0This exercise shows you why you should be extremely careful about adding expenses to your fixed costs, because once they\u2019re there, they are very hard to remove. It would be really hard for them to sell their house. Now I\u2019m not just talking about logistically, I\u2019m talking about psychologically. Also that credit card debt\u00a0they ran up for the wedding and a variety of other things, that\u2019s drowning them.<\/p>\n<p>[00:57:25]\u00a0You can see how when it comes to our money, we often make individual decisions without seeing the big picture. And then one day we wake up and we realize, oh, no, I don\u2019t want this life. Now, they do have options.\u00a0They\u2019re young, so time is on their side. They can get a roommate. Amy got a new job and she\u2019s\u00a0going to\u00a0be earning more. But even if they do all of this and it works perfectly, they\u2019re still not in a great place, and the fact is that they will probably be setting themselves up to burnout.<\/p>\n<p>[Interview]<\/p>\n<p>[00:57:57]\u00a0<strong>Ramit:<\/strong>\u00a0You both made a series of decisions. What decisions did you make that led you to this place? What were they? Just enumerate them for me.<\/p>\n<p>[00:58:06]\u00a0<strong>Amy:<\/strong>\u00a0Wedding.<\/p>\n<p>[00:58:08]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:58:10]\u00a0<strong>Amy:<\/strong>\u00a0Leaving our jobs.<\/p>\n<p>[00:58:11]\u00a0<strong>Tori:<\/strong>\u00a0Leaving our jobs. I would even say for me getting the salon suite.<\/p>\n<p>[00:58:16]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. What else?<\/p>\n<p>[00:58:20]\u00a0<strong>Tori:<\/strong>\u00a0The house.<\/p>\n<p>[00:58:21]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, all those. Okay. So at each step, you got it and you were like, we\u2019ll figure this out later.<\/p>\n<p>[00:58:29]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:58:31]\u00a0<strong>Ramit:<\/strong>\u00a0Later is now. You can\u2019t go wrong. We\u2019ll try something. If it doesn\u2019t work, we\u2019ll try something else. Let\u2019s loosen it up a bit. Somebody throw something out.<\/p>\n<p>[00:58:40]\u00a0<strong>Tori:<\/strong>\u00a0I would say let\u2019s take the house away.<\/p>\n<p>[00:58:43]\u00a0<strong>Amy:<\/strong>\u00a0Everything else is not optional. As of now the mortgage is not optional. The idea of could we get a roommate paying 1200 a month, or could we rent the whole house out and live somewhere else, but our credit is so\u00a0fucked\u00a0that we couldn\u2019t move into an apartment.<\/p>\n<p>[00:59:08]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm. True. So you do have some optionality here, but truthfully, it\u2019s not going to move the needle.<\/p>\n<p>[00:59:16]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:59:16]\u00a0<strong>Ramit:<\/strong>\u00a0All right, so what do you want to do, Amy?<\/p>\n<p>[00:59:21]\u00a0<strong>Amy:<\/strong>\u00a0Find a single friend that doesn\u2019t have a pet that wants to live in the room.<\/p>\n<p>[00:59:27]\u00a0<strong>Ramit:<\/strong>\u00a0So that has now dropped your fixed cost down to 70%. What else? Tori, it\u2019s your turn.<\/p>\n<p>[00:59:34]\u00a0<strong>Tori:<\/strong>\u00a0I would say cut all subscriptions off probably.<\/p>\n<p>[00:59:38]\u00a0<strong>Ramit:<\/strong>\u00a0So watch. 115. I\u2019m going to just literally zero it out. All subscriptions canceled. Now, I don\u2019t know if this is realistic or not, but let\u2019s go ahead and do it. Zero takes you from 70 to 69%. We\u2019re now at 1% increments.<\/p>\n<p>[00:59:54]\u00a0<strong>Amy:<\/strong>\u00a0Doesn\u2019t make a difference.<\/p>\n<p>[00:59:56]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, it\u2019s meaningless.<\/p>\n<p>[00:59:58]\u00a0<strong>Amy:<\/strong>\u00a0And even groceries. And groceries are only that high because we make an effort to eat at home.<\/p>\n<p>[01:00:05]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, so what\u2019s your conclusion from this so far?<\/p>\n<p>[01:00:09]\u00a0<strong>Amy:<\/strong>\u00a0To me it\u2019s either decrease the mortgage in some way, whether it be a renter or fully renting it out. The optimist in me wants to think Tori\u2019s business has been growing and will continue to grow next year and make more. My business is doing the same, and I can try to keep up with it with a 9-5. I feel like the only way is to increase income.<\/p>\n<p>[01:00:38]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-oh, you said it. Ring the bell. They always say it. People who are overspending always say\u2013 what do they say, Amy?<\/p>\n<p>[01:00:47]\u00a0<strong>Amy:<\/strong>\u00a0Increase income.<\/p>\n<p>[01:00:48]\u00a0<strong>Ramit:<\/strong>\u00a0We just got to make more money.<\/p>\n<p>[01:00:50]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:00:51]\u00a0<strong>Ramit:<\/strong>\u00a0It doesn\u2019t work. Trying hard is good. I love to see it. It seems like you both are willing to play ball. I love that. You\u2019re getting jobs. You\u2019re working hard. I love that. That\u2019s great. But sometimes working hard cannot make up for a structural problem.<\/p>\n<p>[01:01:08]\u00a0<strong>Amy:<\/strong>\u00a0What can you do about that?<\/p>\n<p>[01:01:11]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s look at your income. No. You can\u2019t declare bankruptcy making $135,000 and going, oh, we can\u2019t pay this off. No. Sometimes I think that when we have really big challenges in life, we dance around it, but sometimes the solution is just to walk through the fire. We need to face the problem and just own it. Go straight at it.<\/p>\n<p>[01:01:35]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:01:35]\u00a0<strong>Ramit:<\/strong>\u00a0So let me ask you this. If I were to give you three options, change nothing, change a few little things, or make major changes, option 1, 2, and 3, which option would you choose?<\/p>\n<p>[01:01:50]\u00a0<strong>Tori:<\/strong>\u00a0Major changes.<\/p>\n<p>[01:01:52]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm. Amy?<\/p>\n<p>[01:01:54]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm. Number three.<\/p>\n<p>[01:01:55]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Everybody says that.<\/p>\n<p>[01:01:57]\u00a0<strong>Tori:<\/strong>\u00a0Not until it\u2019s time to do the hard work.<\/p>\n<p>[01:02:00]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Awesome. So is this the point where you have to make major changes or is it you want to wait a few months and see how things go?<\/p>\n<p>[01:02:10]\u00a0<strong>Tori:<\/strong>\u00a0I don\u2019t.<\/p>\n<p>[01:02:11]\u00a0<strong>Ramit:<\/strong>\u00a0Amy?<\/p>\n<p>[01:02:12]\u00a0<strong>Amy:<\/strong>\u00a0I want to wait two months.<\/p>\n<p>[01:02:14]\u00a0<strong>Ramit:<\/strong>\u00a0Tell me.<\/p>\n<p>[01:02:15]\u00a0<strong>Amy:<\/strong>\u00a0See how things go.<\/p>\n<p>[01:02:16]\u00a0<strong>Ramit:<\/strong>\u00a0Tell me. Play out two months. What happens?<\/p>\n<p>[01:02:19]\u00a0<strong>Amy:<\/strong>\u00a0I\u2019m starting to make steady income.<\/p>\n<p>[01:02:23]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[01:02:24]\u00a0<strong>Amy:<\/strong>\u00a0Tori\u2019s feeling like the benefits of her business advancing like it has been, and just seeing if we can actually pay things down instead of just sustain.<\/p>\n<p>[01:02:37]\u00a0<strong>Ramit:<\/strong>\u00a0All right, let\u2019s take it methodically and just break it down. Who knows? Maybe this shows something interesting. You got your debt payments. You have 44 plus 16, let\u2019s just call it $60,000 on credit card debt. Right?<\/p>\n<p>[01:02:50]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[01:02:51]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Have you ever calculated how long that\u2019s going to take to pay it off?<\/p>\n<p>[01:02:56]\u00a0<strong>Amy:<\/strong>\u00a0I think I saw something sickening like 15 years or something crazy.<\/p>\n<p>[01:03:01]\u00a0<strong>Ramit:<\/strong>\u00a015 years. Yeah, that\u2019s crazy. Let\u2019s look it up. It will take you 530. That\u2019s so many months. I have to pull out a calculator. 534 months divided by 12. Amy, read the rest of this.<\/p>\n<p>[01:03:12]\u00a0<strong>Amy:<\/strong>\u00a0With a minimum payment, it will take you 534 months to be rid of your debt. In that time, you\u2019ll pay 124,319 and 7 cents in interest.<\/p>\n<p>[01:03:25]\u00a0<strong>Ramit:<\/strong>\u00a0534 months is how many years, Amy?<\/p>\n<p>[01:03:29]\u00a0<strong>Amy:<\/strong>\u00a044.<\/p>\n<p>[01:03:35]\u00a0<strong>Ramit:<\/strong>\u00a0So how old will both of you be in 44 years when you\u2019re finally debt free?<\/p>\n<p>[01:03:40]\u00a0<strong>Amy:<\/strong>\u00a072.<\/p>\n<p>[01:03:43]\u00a0<strong>Ramit:<\/strong>\u00a0Wow.<\/p>\n<p>[01:03:43]\u00a0<strong>Tori:<\/strong>\u00a0And I\u2019ll be 71.<\/p>\n<p>[01:03:46]\u00a0<strong>Ramit:<\/strong>\u00a0Happy retirements. Amy, what do you see? What are you thinking right now as we look at this stuff?<\/p>\n<p>[01:03:52]\u00a0<strong>Amy:<\/strong>\u00a0No way.<\/p>\n<p>[01:03:53]\u00a0<strong>Ramit:<\/strong>\u00a0Bingo. No way. You want to put, what, an extra 1,000 bucks towards this? You want to see what happens?<\/p>\n<p>[01:04:01]\u00a0<strong>Amy:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:04:02]\u00a0<strong>Ramit:<\/strong>\u00a0Instead of 3,051 a month, let\u2019s put 4,051 a month. All right. That is going to take you 18 months to get rid of your debt.<\/p>\n<p>[Narration]<\/p>\n<p>[01:04:17]\u00a0<strong>Ramit:<\/strong>\u00a0Okay,\u00a0let me\u00a0cut in here for a second. This conversation took a very confusing turn because they told me that they were paying the minimum, which, according to two different credit card debt calculators, would take them decades to pay off. And it took me re-listening to our conversation and re-analyzing the math to figure out what actually happened.<\/p>\n<p>[01:04:38]\u00a0I realized that they\u2019re actually paying a lot more than the minimum, approximately $2,000 a month more, which is a huge amount, and that means their debt will actually be paid off in about two years. Now, remember Amy had previously resigned herself to paying the debt off over 15 years, which she called sickening, and now she realizes it can be done in two years.<\/p>\n<p>[Interview]<\/p>\n<p>[01:05:06]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s two years. You will need to pay a total of $78,821, which includes almost $17,000 of interest. What do you think of that?<\/p>\n<p>[01:05:28]\u00a0<strong>Tori:<\/strong>\u00a0That\u2019s a lot.<\/p>\n<p>[01:05:30]\u00a0<strong>Amy:<\/strong>\u00a0I think that people who are used to talking about debt might be like, oh, good for you. You can do it in two years. But to me, I\u2019m just like, that is never something that I thought we would be grateful to see. I never thought it would be, oh, instead of 44 years, it\u2019s two. No, two still sucks. To be paying interest at all sucks. It just feels unfair, which I know we did it to ourselves. It just feels like,\u00a0fuck,\u00a0man, $16,000 of monopoly money is what it seems like to me. It\u2019s not anything that we actually spent money on and enjoyed. It\u2019s just accumulated.<\/p>\n<p>[01:06:14]\u00a0<strong>Ramit:<\/strong>\u00a0Let me reframe what you told me. It does suck. I totally agree with that. If you follow a plan like this, you are working insanely hard for the next two years just to get to zero.<\/p>\n<p>[01:06:27]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[01:06:28]\u00a0<strong>Ramit:<\/strong>\u00a0Okay?<\/p>\n<p>[01:06:29]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:06:30]\u00a0<strong>Ramit:<\/strong>\u00a0I do want to say that I want you to be mindful of the language you use because you did make the choice all the choices that got you into this debt. Nobody forced you to sign anything. You also did enjoy your wedding. So when you say it\u2019s not like we didn\u2019t enjoy, you enjoyed it. We have to be honest about that. What do you want to do?<\/p>\n<p>[01:06:59]\u00a0<strong>Amy:<\/strong>\u00a0I know we\u2019ve said before that if selling the house meant we could both immediately pay off all of our debt, we would do it<\/p>\n<p>[01:07:08]\u00a0<strong>Ramit:<\/strong>\u00a0How much did you buy the house for?<\/p>\n<p>[01:07:11]\u00a0<strong>Amy:<\/strong>\u00a0374-ish.<\/p>\n<p>[01:07:13]\u00a0<strong>Ramit:<\/strong>\u00a0374. And according to a real rough comp, you could sell it for 450. Let\u2019s just say you were to able to sell it for that, 76,000 more, minus fees, taxes, etc. I don\u2019t know. You might take home 35, 40k. Now,35k would really help towards your debt, though. I\u2019ll tell you that, massively.<\/p>\n<p>[01:07:42]\u00a0Your debt wouldn\u2019t be fully paid off, but it would take a huge chunk of it out right there. Where that really matters is here. So remember that your current housing cost is 32 or so percent. If you could basically go back and live where you used to live as an example, saving $1,000 a month, that $1,000 a month could be redirected to paying off debt faster, which in my opinion I would do, I would split my money up and put some of it towards the mortgage, some of it towards saving, some of it towards investing. I would get that habit going, and that would be with you forever. You would lock in those savings for as long as you lived in that place.<\/p>\n<p>[01:08:27]\u00a0<strong>Tori:<\/strong>\u00a0Yeah, I think that sounds like something I would want to do.<\/p>\n<p>[01:08:31]\u00a0<strong>Amy:<\/strong>\u00a0Sounds good in theory. I just now feel we wouldn\u2019t be accepted to live in any apartments. Our credit scores are trash.<\/p>\n<p>[01:08:43]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:08:44]\u00a0<strong>Tori:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:08:45]\u00a0<strong>Ramit:<\/strong>\u00a0Any other options you have?<\/p>\n<p>[01:08:47]\u00a0<strong>Amy:<\/strong>\u00a0Living with my mom again.<\/p>\n<p>[01:08:48]\u00a0<strong>Ramit:<\/strong>\u00a0What do you think about that?<\/p>\n<p>[01:08:51]\u00a0<strong>Tori:<\/strong>\u00a0I love her mom so I wouldn\u2019t mind, and I don\u2019t think\u2013<\/p>\n<p>[01:08:57]\u00a0<strong>Ramit:<\/strong>\u00a0Wait a second.<\/p>\n<p>[01:08:57]\u00a0<strong>Tori:<\/strong>\u00a0She would either.<\/p>\n<p>[01:08:58]\u00a0<strong>Ramit:<\/strong>\u00a0Would she be open to it or not?<\/p>\n<p>[01:09:01]\u00a0<strong>Tori:<\/strong>\u00a0She would.<\/p>\n<p>[01:09:02]\u00a0<strong>Amy:<\/strong>\u00a0Would love it.<\/p>\n<p>[01:09:03]\u00a0<strong>Ramit:<\/strong>\u00a0So look, I\u2019m not telling you got to live with your mom. Here\u2019s what I am telling you. If I were in your situation and I was like, damn, this\u00a0fucking\u00a0sucks. I\u2019m paying all the money I make to credit cards. Every month we sit at home and stare at the wall because we can\u2019t do anything because our expenses are too high. And even I am getting a 9-5 job. And even if Tori does better, we\u2019re basically taking all that money and shoving it to all these expenses. And once the debt\u2019s paid off, we still have these high costs.<\/p>\n<p>[01:09:39]\u00a0Is this the life we want, the current scenario you\u2019re in? Let\u2019s actually play this out with some real numbers because I think we\u2019ve had enough of just like, let\u2019s just make these decisions and it\u2019ll all work out. Let\u2019s actually model it and simulate it. For the next two years, you don\u2019t go on vacation. You\u2019re not buying gifts, it\u2019s going here.<\/p>\n<p>[01:10:02]\u00a0And you do have a little bit of money that can be saved, which you should for sure save and invest. But aside from a little bit of guilt-free spending, it\u2019s all hands on deck to pay off credit cards. Cool?<\/p>\n<p>[01:10:19]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[01:10:19]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Then one day your debt gets completely zeroed out, two years from now. It\u2019s not that long away. Zero. Watch what I\u2019m doing. Zero. Holy\u00a0shit. Look at those fixed cost numbers. They just went down like crazy. It\u2019s down to 38%. This is insane.<\/p>\n<p>[01:10:41]\u00a0<strong>Amy:<\/strong>\u00a0It\u2019s hard not to look at that and think like,\u00a0fuck, we didn\u2019t have to be here four months ago.<\/p>\n<p>[01:10:49]\u00a0<strong>Ramit:<\/strong>\u00a0What does that mean?<\/p>\n<p>[01:10:52]\u00a0<strong>Amy:<\/strong>\u00a0I think the wedding is just what sunk us because it\u2019s where our debt came from. So it\u2019s just rough to see those numbers and know we could be thriving right now.<\/p>\n<p>[01:11:03]\u00a0<strong>Ramit:<\/strong>\u00a0But let\u2019s acknowledge that you made decisions that didn\u2019t serve you. And here you are today. Let\u2019s put that aside and let\u2019s look to the future. So in two years, which will be very difficult for you for two years, but it can be done, it absolutely can be done. Especially, I know this because, Tori, you seem like you\u2019re ready to buckle down and do it. Am I reading you right?<\/p>\n<p>[01:11:28]\u00a0<strong>Tori:<\/strong>\u00a0I am. Yeah.<\/p>\n<p>[01:11:30]\u00a0<strong>Ramit:<\/strong>\u00a0Tori\u2019s afraid of ever going back, so she\u2019s ready to do what needs to be done. Amy, you told me a couple of examples where when you had a mission, you were able to save a bunch of money and be extremely meticulous about tracking your money, right?<\/p>\n<p>[01:11:48]\u00a0<strong>Amy:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[01:11:49]\u00a0<strong>Ramit:<\/strong>\u00a0So this is your mission if you want to accept it. It\u2019s hard, but it\u2019s not that complicated. Yeah. Goes like, all right, sold. What\u2019s next?<\/p>\n<p>[01:11:58]\u00a0<strong>Amy:<\/strong>\u00a0I love how you put that. I\u2019m like,\u00a0fucking\u00a0challenge accepted. Yeah, I don\u2019t think I looked at it the same as Tori, so I\u2019m glad it was reframed. Yeah, we never imagined ourselves taking two years to pay off debt, but it is where we are and it\u2019s better than 44 for sure, and in being able to imagine a scenario where we can still keep and enjoy our home feels worth it to me because I think our life value is still more paying it off for two years and making sacrifices than it is selling our house that we literally created ourselves and moving in with parents and a nine-year-old.<\/p>\n<p>[Narration]<\/p>\n<p>[01:12:47]\u00a0<strong>Ramit:<\/strong>\u00a0Let me offer a few thoughts on our conversation. First, some of the numbers here were a little confusing today, and we were a little looser than usual, but I also have to say that\u2019s normal when we are talking about people\u2019s money. Usually, the first time people do the CSP, it is a mess. I don\u2019t mind because you can iterate on it and improve it.<\/p>\n<p>[01:13:07]\u00a0Here are the key insights. First, they spent way, way too much on their wedding. Next, they put those charges on their credit card when they could not afford to pay it off that month.\u00a0That\u2019s a huge mistake. They reduced their income while moving into a new house, which is a dangerous combination that people often make.<\/p>\n<p>[01:13:27]\u00a0The good news is that they have options. They could live minimally for two years and pay it off, or they could sell the house and move in with mom to supercharge that timeline and do a complete financial reset. Now, no matter what they choose, Amy and Tori are\u00a0going to\u00a0have to completely reconceptualize their relationship with money and with each other.<\/p>\n<p>[01:13:48]\u00a0They\u2019re\u00a0going to\u00a0have to talk about it as partners. They\u2019re\u00a0going to\u00a0have to create a rich life vision together that they are both methodically working towards. They\u2019re young and they can make dramatic changes if they want to. Let\u2019s listen to their follow-ups, starting with Tori.<\/p>\n<p>[01:14:05]\u00a0<strong>Tori:<\/strong>\u00a0Me and Amy really thought this debt was going to take us so long to get down. It was literally wearing a tearing on us. And I think now that we have a plan, we\u2019re able to execute. The aha moment for me was learning that I had childhood trauma, that I didn\u2019t feel like I could speak up in the relationship when it came to finances, especially. That for me was just such a big life lesson, so I really appreciate that.<\/p>\n<p>[01:14:35]\u00a0We decided that we are going to keep the house, which I know my wife is so excited for. So we\u2019re going to keep the house. We\u2019re not going to be moving to mom\u2019s. We are going to stay home where you\u2019re going to make sure that we are paying off our credit cards.<\/p>\n<p>[01:14:50]\u00a0We\u2019re going to make sure that we make a solid plan each and every month and every week. And we\u2019re going to make sure we revisit those finances and we\u2019re looking at them carefully. One of my big goals is making sure that we invest and have an emergency plan. So that\u2019s something I really want to implement into our finances.<\/p>\n<p>[01:15:10]\u00a0<strong>Ramit:<\/strong>\u00a0And now Amy\u2019s follow-up.<\/p>\n<p>[01:15:11]\u00a0<strong>Amy:<\/strong>\u00a0Hearing Tori say that she has always felt like she was at the little kids table and not feeling empowered to have the conversations when it came to our finances was a really big moment for us. Also for me to see the amount of times that I\u2019ve actually had money in the bank and then spent it, we\u2019re in the same place right now. It just makes me feel a lot better that it doesn\u2019t mean just because right now we don\u2019t have all the money in the bank that we can\u2019t get there again. What we really learned is a realistic timeline for when that debt can be paid off.<\/p>\n<p>[01:15:44]\u00a0It\u2019ll take us about two years which is unfortunate but also pretty comforting to have an actual number and timeline on that. Our plan is to stay in our home. We won\u2019t be renting it out at this moment. We won\u2019t be selling it, and we won\u2019t be moving in with my mom. Our roommates at the moment will be moving out shortly. With my new income, we have the ability to pay the mortgage comfortably and pay our minimums on the credit cards and then some.<\/p>\n<p>[01:16:13]\u00a0We\u2019ll be continuously re-evaluating our CSP and seeing how much more we can put toward credit cards and how that can adjust our debt payoff timeline. But now we know exactly how much we need to put toward our debt each month, and anything more can go just to expedite that.<\/p>\n<p>[01:16:31]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. I am a little surprised with those follow-ups. On the positive side, if they truly dial in their finances, then in two, maybe three years, they can be in a totally transformed place. I\u2019ve seen people do this, but you have to be totally aligned. You have to be rowing in the same direction and have a very powerful vision.<\/p>\n<p>[01:16:53]\u00a0On the other hand, it\u2019s really hard to make a radical change overnight. It\u2019s just human nature. It\u2019s hard to do. And I didn\u2019t hear a lot of decisive changes that Tori and Amy\u00a0want to\u00a0make.\u00a0So I hope for the best.\u00a0Tori and Amy, I\u00a0want to\u00a0thank you again for coming on the show, for being so open. Please keep me updated. I do wish the best for both of you.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ufeff Amy and Tori are in their late 20s. They recently got married and honeymooned in Greece, racking up tens of thousands of dollars in credit card debt. A brand new house, changing jobs, and influential backgrounds all come into play as they work on a plan to pay it down as quickly and comfortably [&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-118927","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\/118927","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=118927"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118927\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}