{"id":118954,"date":"2023-09-12T17:46:29","date_gmt":"2023-09-12T21:46:29","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118954"},"modified":"2025-04-07T10:06:18","modified_gmt":"2025-04-07T14:06:18","slug":"121-alana-sam","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/121-alana-sam\/","title":{"rendered":"Episode 121. \u201cHe wasn\u2019t supposed to have student loans. Now he has $157k\u201d"},"content":{"rendered":"<p><iframe title=\"\u201cHe wasn\u2019t supposed to have student loans. Now he has $157k\u201d\" src=\"https:\/\/www.youtube.com\/embed\/Vml62NpcNqQ\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/episode\/3v1K41ZLwsRSwpKxRXEuK2\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Alana and Sam, 37 and 36, have two kids and $157,000 in student loans\u2014loans which his mother assured would be paid. They haven\u2019t been. Instead, the debt has tripled since he left school. Their home life has suffered as a result, as the family currently lives with Sam\u2019s mom to save money.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>LMNT | Right now, LMNT is offering 8 single serving packets FREE with any LMNT order. This is a great way to try all 8 flavors. Get yours at\u00a0<strong><a href=\"https:\/\/drinklmnt.com\/RAMIT\">https:\/\/drinklmnt.com\/RAMIT<\/a><\/strong>.<\/p>\n<p>Fabric by Gerber Life | Protect your family today with Fabric by Gerber Life. Apply today in just 10 minutes at\u00a0<strong><a href=\"https:\/\/www.meetfabric.com\/ramit\">https:\/\/www.meetfabric.com\/ramit.<\/a><\/strong><\/p>\n<p>DoorDash | Go to\u00a0<strong><a href=\"https:\/\/www.doordash.com\/\">https:\/\/www.doordash.com<\/a><\/strong>\u00a0and use promo code RAMIT to get 50% off (up to $10) when you spend $15 or more at convenience, grocery or retail stores on DoorDash.<\/p>\n<p>BetterHelp | Visit\u00a0<strong><a href=\"https:\/\/betterhelp.com\/ramit\">https:\/\/betterhelp.com\/ramit<\/a><\/strong>\u00a0today to get 10% off your first month.<\/p>\n<h2><strong>Tools mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.iwillteachyoutoberich.com\/landing-conscious-spending\/\">Conscious Spending Plan<\/a><\/li>\n<li><a href=\"https:\/\/amzn.to\/3HGwbkK\">Get my New York Times best-selling book<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p><a href=\"https:\/\/drive.google.com\/file\/d\/1y6GzsK7gfIMqU_D8GJGTVpaQxkqyGNIn\/view?usp=sharing\">Download the full transcript PDF<\/a>.<\/p>\n<p>[00:00:08] Sam: My decisions aren\u2019t always based in reality. Sometimes they\u2019re based in anxiety. Things that discuss finances really, really, really stress me out.<br \/>\n[00:00:18] Ramit: Is that the word you associate with money?<br \/>\n[00:00:20] Sam: Uh, yeah.<br \/>\n[00:00:22] Ramit: Stress.<br \/>\n[00:00:23] Sam: Yeah. I shut down, but I was on the phone with my student loan provider today, and I got stressed. And Alana can vouch. I was just dejected and almost disassociated, for the rest of the night. I usually avoid, avoid, avoid.<br \/>\n[00:00:41] Ramit: It\u2019s just the number is so big, you\u2019re just like, ugh.<br \/>\n[00:00:43] Sam: Yeah, it\u2019s pretty insurmountable. So it\u2019s very overwhelming, for sure.<br \/>\n[00:00:47] Alana: It\u2019s tripled since it was originally taken out. 130,000 of it is just interest alone.<br \/>\n[00:00:54] Ramit: Fuck.<br \/>\n[00:00:55] Alana: You would have to pay a little over $2,000 a month to go on any downward trajectory of that loan.<br \/>\n[00:01:02] Ramit: I hate this.<br \/>\n[00:01:03] Alana: For a public school teacher.<br \/>\n[Narration]<br \/>\n[00:01:06] Ramit: What would you do if you had a cloud of debt hanging over you? And what if that debt felt completely unfair? Today, I\u2019d like you to meet Alana and Sam. She\u2019s a 37-year-old hairdresser. He\u2019s a 36-year-old high school teacher, and they\u2019re facing a huge student loan that\u2019s left them paralyzed. As you listen, notice the dynamics around their living situation, their children, but most of all, how this debt came about. Money is never just a series of numbers on a page. Money has context. Money has meaning. Money even has politics. That\u2019s what we will explore today.<br \/>\n[Interview]<br \/>\n[00:01:47] Alana: I loved the Netflix show. I felt like it was really relatable. It was about people that I didn\u2019t think were represented very often on financial things. I got some help out of it. I felt empowered to talk about our finances and do something, but I also knew that this show is something Sam couldn\u2019t watch, and I found that intriguing.<br \/>\n[00:02:11] Ramit: Uh, Sam, is that true? You couldn\u2019t watch the show?<br \/>\n[00:02:16] Sam: Yeah. Things that discuss finances really, really, really stress me out. There\u2019s been time I had to shut off the movie The Big Short, even, totally unrelated to me, but it was stressing me out too much watching these stockbrokers take advantage of the sub-prime housing market.<br \/>\n[00:02:39] Ramit: So what? Money is stressful to you? Is that the word you associate with money?<br \/>\n[00:02:43] Sam: Uh, yeah.<br \/>\n[00:02:45] Ramit: Stress.<br \/>\n[00:02:46] Sam: Yeah.<br \/>\n[00:02:47] Ramit: And when I say stress, what comes to mind for you?<br \/>\n[00:02:52] Sam: I shut down. But I was on the phone with my student loan provider today, and I got stressed. And Alana can vouch. I was just dejected and almost disassociated for the rest of the night up until dinnertime because I was just like, ugh,<br \/>\n[00:03:10] Ramit: That was today?<br \/>\n[00:03:11] Sam: Yeah, it was today. Yeah, yeah.<br \/>\n[00:03:12] Ramit: Oh my gosh.<br \/>\n[00:03:13] Alana: If he knows he has to call, it\u2019s a whole day stress affair. He talks about it all day, and he has to work himself up.<br \/>\n[00:03:23] Sam: Last of the month, I had to talk to him.<br \/>\n[00:03:26] Ramit: How often do you talk to your student loan company?<br \/>\n[00:03:28] Sam: Um lately, once a week, but we\u2019re working on trying to come up with a settlement. So it\u2019s been more frequent. It\u2019s usually not that frequent. I usually avoid, avoid, avoid.<br \/>\n[00:03:39] Ramit: Do you feel right now talking about money?<br \/>\n[00:03:42] Sam: Um, okay.<br \/>\n[00:03:44] Ramit: Okay. If it gets uncomfortable today, tell me. Take a break.<br \/>\n[00:03:49] Sam: I\u2019m okay. Yeah, I\u2019m okay with being uncomfortable.<br \/>\n[00:03:52] Ramit: Okay, that\u2019s good to hear. I like that. All right. Wait a second. So you decided to invite both of you on here, where millions of people watch? What?<br \/>\n[00:04:05] Sam: I was trying to find the text where she told me about it, but it was like, please don\u2019t kill me. I\u2019m sorry. Something along those lines.<br \/>\n[00:04:13] Ramit: Okay. Well, I\u2019m glad you\u2019re here. Both of you.<br \/>\n[00:04:15] Alana: Cool. Me too.<br \/>\n[00:04:17] Ramit: So Sam, tell me in a sentence or two, when it comes to money in your relationship, what is the primary challenge?<br \/>\n[00:04:25] Sam: I think we probably overspend a lot.<br \/>\n[00:04:32] Ramit: That\u2019s the primary challenge?<br \/>\n[00:04:33] Sam: We\u2019re not paying my student loans right now.<br \/>\n[00:04:37] Ramit: How much are those student loans, Sam?<br \/>\n[00:04:39] Sam: Uh, $157,000.<br \/>\n[00:04:42] Ramit: Sam, that seems like the primary issue, right?<br \/>\n[00:04:46] Sam: Yeah, it is. It is. But I put it on the back burner, and that\u2019s not good.<br \/>\n[00:04:52] Ramit: Okay, so you have $157,000 of loans. You put it on the back burner means you avoid talking about it.<br \/>\n[00:05:00] Sam: Sure.<br \/>\n[00:05:00] Ramit: And then what\u2019s the overspending part?<br \/>\n[00:05:07] Alana: Too much takeout.<br \/>\n[00:05:09] Ramit: Too much takeout. Okay.<br \/>\n[00:05:10] Sam: I think too much takeout in comparison to the $157,000 is probably low on the totem pole.<br \/>\n[00:05:16] Ramit: It quite interesting that, uh, when I asked, what\u2019s the primary challenge, you said we overspend. Think it\u2019s interesting?<br \/>\n[00:05:26] Sam: Yeah. I think there might even be some projection there. Um, because I know that I have this huge, uh, I don\u2019t know, camel on my back. What\u2019s the phrase? I don\u2019t know. There\u2019s a phrase.<br \/>\n[00:05:40] Alana: Rocks in your backpack.<br \/>\n[00:05:41] Sam: Yeah, yeah.<br \/>\n[00:05:42] Alana: I like that one.<br \/>\n[00:05:43] Ramit: Is that the student loan?<br \/>\n[00:05:45] Alana: Yeah.<br \/>\n[00:05:45] Ramit: Okay. How does this student loan debt affect your relationship?<br \/>\n[00:05:54] Alana: In most of the ways, I think. He had a hard time marrying me because he was nervous about me taking that on as a partnership. It\u2019s informed the amount of children we have. That was really hard for him to have two. I would have picked three.<br \/>\n[00:06:21] Ramit: And how about day-to-day?<br \/>\n[00:06:23] Alana: Um, conversation-wise, we have to choose how to have our conversations. I remember having a conversation with him about the rental car, how expensive that was. I felt like I was slow-rolling him when, at the end of the day, I should have felt justified, I guess.<br \/>\n[00:06:48] Ramit: Slow-rolling him means what?<br \/>\n[00:06:50] Alana: Um, trying not to be as direct about how much it was right out of the gate.<br \/>\n[00:06:59] Ramit: Okay. Do you do that a lot?<br \/>\n[00:07:01] Alana: Um, yeah, I have a hard time being honest with how much things cost because I don\u2019t want to get in an argument about it. If I feel like it\u2019s needed for the family, then I will do it.<br \/>\n[00:07:14] Ramit: Hmm. Okay. Does it work?<br \/>\n[00:07:18] Alana: No. I\u2019ll end up with a tomorrow Alana has a bigger issue. That vacation we just went on was really hard to visually and mentally plan out because I felt like I had to do it all on my own.<br \/>\n[00:07:36] Ramit: Because if you asked Sam for his input, what would happen?<br \/>\n[00:07:40] Alana: Um, it would just make him anxious, stress them out, remind him of that loan. I love you.<br \/>\n[00:07:48] Ramit: And Sam, how about for you? How does the debt affect your relationship?<br \/>\n[00:07:53] Sam: I would say mostly in my mood. I don\u2019t think it affects us a lot, but on the days that it does affect me, it affects me a lot. Just in the sense that today, I was not super talkative because I didn\u2019t even really\u2013 I was despondent because I had gotten off the phone with them. And it didn\u2019t go great. It didn\u2019t go bad, but I was just so emotionally exhausted from working myself up to that that I wasn\u2019t maybe the most available partner for the rest of the day.<br \/>\n[00:08:28] Ramit: Okay. It\u2019s just the number is so big, you\u2019re just like, ugh.<br \/>\n[00:08:30] Sam: Yeah, it\u2019s pretty insurmountable. So it\u2019s very overwhelming, for sure.<br \/>\n[00:08:35] Ramit: Why do you think, Alana, that you\u2019re the one who filled out the application and not Sam?<br \/>\n[00:08:40] Alana: I guess I see a future in that. I\u2019m optimistic. Hopeful.<br \/>\n[00:08:49] Ramit: All right.<br \/>\n[00:08:49] Sam: I think I\u2019m the opposite, so that probably has something to do with. I\u2019m pretty pessimistic about it.<br \/>\n[Narration]<br \/>\n[00:08:55] Ramit: One of the things I find so fascinating about people is, we will do the same thing every day for 50 years, and we will openly admit it doesn\u2019t work, and we\u2019ll just keep doing it. Notice I said we, because I do this too. We all do it. We avoid things, we pick fights, we talk around issues, we make up stories about why something won\u2019t work for us.<br \/>\n[00:09:18] And again, we openly admit that our approach does not work for us. Because sometimes, the alternative is too scary to contemplate. I found that most of us would rather keep doing what is failing than change our approach and possibly risk failure. This, to me, is one of the most fascinating peculiarities of human behavior that there is.<br \/>\n[00:09:43] We\u2019ll be right back. Now back to the episode.<br \/>\n[Interview]<br \/>\n[00:09:48] Ramit: Well, I want to know about this debt. First of all, how did you get into this debt? What degree was it for? Walk me through it.<br \/>\n[00:09:55] Sam: All right. So when I was in high school, my basic family and guidance counselors, or school counselors, were like, you go to the best school you get into, and we\u2019ll figure out how to pay for it. So I got into a pretty expensive school.<br \/>\n[00:10:25] Ramit: Which one?<br \/>\n[00:10:26] Sam: Northeastern.<br \/>\n[00:10:27] Ramit: Okay.<br \/>\n[00:10:28] Sam: But my grandmother, at the time, was also in a financial position where she was like, don\u2019t worry about it. Go. It\u2019s all set. It\u2019ll be taken care of. And then I would say my third year is when my grandmother got Alzheimer\u2019s. And so we had a couple of options. She could go into a care facility, or she could do hospice at my mom\u2019s house. And so we decided to have her live here. Um, but that included building a huge addition to my mom\u2019s house, and that\u2019s where a lot of her money, some of which was allocated for my student loan debt or college costs\u2013<br \/>\n[00:11:18] Alana: You missed the part where she didn\u2019t tell you that.<br \/>\n[00:11:23] Sam: Oh, I didn\u2019t know that all of her money was basically disappearing. Yeah, that was not something that was made aware to me. So I dropped out of Northeastern at that time, when my grandmother moved in with my mom to reassess what I wanted to do. I was a psych major at the time at Northeastern. Um, and I took a few years off, and then went to UNH and graduated from there two years later.<br \/>\n[00:11:55] Ramit: How much did you have any end in debt?<br \/>\n[00:11:57] Sam: I don\u2019t remember, if I\u2019m being honest.<br \/>\n[00:12:00] Ramit: When did you realize, at what age, how large this private loan was?<br \/>\n[00:12:06] Sam: 26.<br \/>\n[00:12:07] Ramit: 26 years old. What did you do when you realized it? How did you realize it, and what did you do?<br \/>\n[00:12:11] Sam: I shut down. I asked my mom what we were going to do, or if there was a plan, and basically the answer was, well, when I sell the house, we can pay it off. Okay. I felt a little brushed aside, but it sounded like a good option. But the house is still not sold, and we\u2019re here at the house.<br \/>\n[00:12:35] Ramit: That\u2019s the house you\u2019re living in right now?<br \/>\n[00:12:36] Sam: Yeah, yeah, yeah.<br \/>\n[00:12:38] Ramit: Oh, okay, so does your mom live there as well?<br \/>\n[00:12:41] Sam: Yeah.<br \/>\n[00:12:42] Ramit: Ah. Okay, now I\u2019m starting to understand.<br \/>\n[00:12:46] Alana: So we moved in with our investment.<br \/>\n[00:12:49] Ramit: Right. Why didn\u2019t she sell the house?<br \/>\n[00:12:51] Sam: Um, that\u2019s a good question. Well, her spouse died, how long ago, Alana? Four years?<br \/>\n[00:13:00] Alana: Right before the pandemic, a few months before.<br \/>\n[00:13:04] Ramit: So this house is her security, is that it?<br \/>\n[00:13:06] Alana: Yeah, I think she toggles back and forth on wanting to keep it and leave it to us when she passes versus selling it and doing something with it. I think she gets overwhelmed.<br \/>\n[00:13:18] Ramit: Um, just out of curiosity, what would you prefer?<br \/>\n[00:13:24] Sam: I don\u2019t think we know for sure.<br \/>\n[00:13:26] Alana: I get the challenge. In a dream world, I\u2019d love the multigenerational living, but without the thing over our head. I feel like it\u2019s turned our relationship conditional because we\u2019re just minding our P\u2019s and Q\u2019s, making sure that that deal goes through. But it\u2019s not a good relationship I want with a loved one.<br \/>\n[00:13:55] Ramit: It\u2019s morbid too.<br \/>\n[00:13:56] Alana: Yes. Hiccups. Yeah, yeah.<br \/>\n[00:13:59] Ramit: I mean, I love a good morbid joke, but I feel like this is beyond any Ramit joke.<br \/>\n[00:14:06] Sam: We can all imagine it in our heads.<br \/>\n[00:14:10] Ramit: Thank you. Thank you, Sam, for not making me joke around. Can I ask, um, does your mom have an income?<br \/>\n[00:14:20] Alana: Yeah.<br \/>\n[00:14:21] Ramit: Oh, she works.<br \/>\n[00:14:22] Sam: Yeah, yeah.<br \/>\n[00:14:23] Ramit: Oh, okay. Is she avoidant with money?<br \/>\n[00:14:26] Sam: You can answer it. Go ahead.<br \/>\n[00:14:30] Alana: I think I would say yes.<br \/>\n[00:14:34] Ramit: Uh-huh. Sam?<br \/>\n[00:14:35] Sam: Yeah. Just even the specific situation, when we talk about it, it\u2019s usually like, oh, we\u2019ll figure it out.<br \/>\n[00:14:47] Ramit: Who else did you hear that from in your family? Your guidance counselor\u2013<br \/>\n[00:14:54] Sam: Oh, right. Yeah, yeah.<br \/>\n[00:14:55] Ramit: Who told you, we\u2019ll figure it out. Anybody else in your family tell you that phrase, we\u2019ll figure it out?<br \/>\n[00:14:59] Alana: Grandma.<br \/>\n[00:14:59] Sam: Alana, sometimes.<br \/>\n[00:15:01] Ramit: Uh-huh. Alana.<br \/>\n[00:15:02] Alana: I do. I do do that.<br \/>\n[00:15:04] Sam: Yeah, you do. Um, but no, my grandmother never said that. She was always just like\u2013 well, I guess she never said, we\u2019ll figure it out, but she just said, you\u2019ll be fine. It\u2019ll be fine.<br \/>\n[00:15:13] Ramit: That\u2019s the same thing.<br \/>\n[00:15:14] Sam: Yeah, I suppose.<br \/>\n[00:15:16] Ramit: And Sam, are you fine?<br \/>\n[00:15:19] Sam: Um, no. Yeah. And 12 years ago, it was probably about half of what it is now would be my guess. You asked, and I don\u2019t know the exact number.<br \/>\n[00:15:31] Alana: It\u2019s tripled since it was originally taken out. 130,000 of it is just interest alone.<br \/>\n[00:15:38] Ramit: Fuck.<br \/>\n[00:15:39] Alana: You would have to pay a little over $2,000 a month to go on any downward trajectory of that loan. For a public school teacher.<br \/>\n[00:15:49] Ramit: Yeah, I hate that this is what students go through in America. I hate it. I don\u2019t mind that some people take out debt. Okay. I don\u2019t mind that they have to pay their debt back. Okay. But to have it increasing at these rates, to not be dischargeable in bankruptcy, to compound faster than you could get in the stock market, insane. Sam, what\u2019s the interest rate on your loan?<br \/>\n[00:16:17] Sam: It\u2019s a few different ones. Um, but the highest one is 12.5.<br \/>\n[00:16:22] Ramit: Jesus. I can\u2019t even get 12% returns in my investments. Wow. Okay. You\u2019re a public school teacher, Sam?<br \/>\n[00:16:30] Sam: Yeah.<br \/>\n[00:16:31] Ramit: What do you teach?<br \/>\n[00:16:32] Sam: Uh, high school math. There\u2019s a joke there too, I\u2019m sure.<br \/>\n[Narration]<br \/>\n[00:16:37] Ramit: Let me summarize. Sam\u2019s family and guidance counselor told him to go to the best college he could get into, and they would figure out the money. When he got into an expensive college, his grandmother said she would pay for it. Halfway through, she got sick. She needed expensive care. Those expenses drained his tuition money without his knowledge.<br \/>\n[00:16:57] Expenses, which were then poured into his mom\u2019s house, which is where they live now under a new promise that one day she will sell the house and pay off the loans. Ask yourself if you were in this situation, how would you feel? Personally, I would feel betrayed. I would feel hopeless. I would feel like life isn\u2019t fair. And I can completely understand why Sam would decide to avoid debt or even money altogether.<br \/>\n[Interview]<br \/>\n[00:17:29] Ramit: Did you make payments on your loan?<br \/>\n[00:17:31] Sam: Uh, for a little while. Yeah.<br \/>\n[00:17:33] Ramit: Okay. And then what happened?<br \/>\n[00:17:35] Sam: I couldn\u2019t keep up with it. I was paying it out of my savings. I wasn\u2019t paying it out of money that I actually was making. Um, so I just couldn\u2019t keep up with it. I think I went on forbearance for a year, which my servicer actually got in trouble with. They let too many people go on forbearance without telling them you\u2019re still accruing interest. All that bad stuff is still happening.<br \/>\n[00:18:04] Ramit: Mm-hmm.<br \/>\n[00:18:05] Sam: Um, and then, for a while, I would go off and on reduced interest programs, which were great, but they would let me max out at six months. And then I went back to having to pay $1,700 a month or something like that, which was not sustainable for me at all.<br \/>\n[00:18:23] Ramit: Hmm. And then after this cycle of paying and pausing and paying and pausing, what happened after several years of this?<br \/>\n[00:18:34] Sam: I got married, and I had a family. I realized that that unsustainability was actually unsustainable because I\u2019m thinking about my children\u2019s future. When you\u2019re in your 20s or mid-20s, whatever, I wasn\u2019t necessarily thinking about my future. Then when I met Alana, got married, started a family, then I started thinking about my future and realized that this was no way to make my future better and make my family\u2019s future better.<br \/>\n[00:19:08] Ramit: What made you switch from ignoring it and this passive cycle to saying, I\u2019m going to call them and try to figure something out?<br \/>\n[00:19:16] Sam: Um, Alana talked to a lot of people about it. She did the legwork for me, and it sounded like it made sense.<br \/>\n[00:19:22] Ramit: Okay. Alana, what was that like for you?<br \/>\n[00:19:25] Alana: I was going through a really tough time because of it. Moving in with his mom was all part of that. I had my dream. I definitely have my dreams of that intergenerational living, and it is a nice house, but that is why we moved in, was to get the ball rolling on things. And I at a really hard time mentally, um, living around that conditional situation. Every time, we\u2019d have an argument, I felt like I had to suck it up because it\u2019s $150,000. It\u2019s your whole life. Don\u2019t value your mental health. This is more important.<br \/>\n[Narration]<br \/>\n[00:20:10] Ramit: This is a very complex situation. As a reminder, this is not a therapy session, and I\u2019m not a therapist. Fortunately, I checked with Alana and Sam. They are going to a couple\u2019s counselor to help them through these complicated family dynamics. So let\u2019s zoom in on their finances.<br \/>\n[Interview]<br \/>\n[00:20:26] Ramit: How often does money come up for the two of you?<br \/>\n[00:20:30] Alana: Um, four times a week. One of us will question the other one about a debit purchase occasionally, or we\u2019ll talk about a bill coming through. Or maybe some of the things that we manage manually, like when to pay what.<br \/>\n[00:20:54] Ramit: Okay. First of all, um, do you use a debit card, or do you use a credit card?<br \/>\n[00:21:00] Alana: Debit card mostly.<br \/>\n[00:21:01] Ramit: You have credit card debt?<br \/>\n[00:21:03] Alana: Yes.<br \/>\n[00:21:04] Ramit: Okay. Yeah. Who\u2019s the one in charge of the bills?<br \/>\n[00:21:07] Alana: Um, you are. Mostly, yeah.<br \/>\n[00:21:11] Sam: There\u2019s some that you\u2019re in charge of, but yeah, mostly, I am.<br \/>\n[00:21:15] Ramit: Okay. Got it. What else? What was this thing about taking vacation? Do you ever talk about, how are we going to pay for this? Or this thing\u2019s coming up?<br \/>\n[00:21:25] Sam: Every once in a while, we\u2019ll have a this thing\u2019s coming up, and we have a $1,000 in our bank or in our checking account. So do we want to pull from savings? Can we pull from savings? What are we going to do? Um, but we never hit zero. Once I hit a $1,000 in my checking account, I go into panic mode. And usually, it\u2019s the beginning of the month when all of our bills come out and I haven\u2019t gotten paid yet, or something like that. But that does put me into panic mode.<br \/>\n[00:22:00] Ramit: What do you do when you\u2019re in panic mode?<br \/>\n[00:22:02] Sam: Um, text Alana, I know. OMG. Uh, we have a $1,000 in our checking account. Don\u2019t spend any money because all of our bills are about to come out.<br \/>\n[00:22:15] Ramit: How do you deal with an upcoming purchase, one that maybe you didn\u2019t expect? Maybe it\u2019s a holiday, maybe it\u2019s, uh, braces or whatever it may be. How would you have that conversation?<br \/>\n[00:22:31] Alana: Um, I\u2019d probably text you first to prepare you on your own before we talk about it in person. And then I\u2019ll undersell it or oversell the importance of it. I have to think about what energy I want to come into the room with. More commanding or more emotional.<br \/>\n[00:22:56] Ramit: Who\u2019s making the decision?<br \/>\n[00:22:58] Alana: I don\u2019t know. I think I give Sam more decision inchargeness.<br \/>\n[00:23:07] Ramit: Yeah, because it seems like you\u2019ve taken on the role of trying to convince him. Let me put on a presentation for Sam.<br \/>\n[00:23:15] Alana: Uh-huh. I definitely grew up in that patriarchal side that I fall back to. I don\u2019t agree with, but I fall back on a lot.<br \/>\n[00:23:27] Sam: And I don\u2019t think it\u2019s her trying to convince me on a personal level. It\u2019s more from an unrealistic financial level, from my perspective.<br \/>\n[00:23:41] Ramit: What does that mean?<br \/>\n[00:23:42] Sam: Let\u2019s say Alana is like, hey, we need to go on this family vacation, and the rental car is going to cost $2,000. I would immediately say no to that, but that\u2019s not because we couldn\u2019t get access to $2,000 to pay for a rental car if we absolutely needed to. It\u2019s more trying to talk me off of that ledge than it is like, yeah, of course, we\u2019ll need a rental car, but where are we going to find the money? It doesn\u2019t exist. But it does exist, and we can find it, and we did.<br \/>\n[00:24:20] Ramit: So your instinctive reaction, Sam, is to say no to expenses.<br \/>\n[00:24:26] Sam: Yes.<br \/>\n[00:24:27] Ramit: And Alana, your instinctive reaction is to undersell how much something is really going to cost so you can \u201cconvince\u201d Sam to say yes. Am I getting this right?<br \/>\n[00:24:42] Alana: Yes.<br \/>\n[00:24:42] Sam: Yeah.<br \/>\n[00:24:44] Ramit: Is this dynamic healthy?<br \/>\n[00:24:47] Sam: Probably not.<br \/>\n[00:24:49] Ramit: I don\u2019t think it is. Can you imagine a different dynamic? How do you think other couples talk about money decisions?<br \/>\n[00:24:58] Alana: As a team, I would hope.<br \/>\n[00:25:00] Ramit: Yeah, but how?<br \/>\n[00:25:02] Alana: Um, I don\u2019t know. They probably just say something like, hey, we need to rent a car for this vacation. What should we value? I don\u2019t know.<br \/>\n[00:25:17] Sam: No, yeah.<br \/>\n[00:25:19] Ramit: Wait. I just want to say, that sounded so unrealistic. Even halfway through, every single one of us on this call were like, this is bullshit. There\u2019s no way.<br \/>\n[00:25:27] Alana: I have no idea how they would do that.<br \/>\n[00:25:30] Ramit: That\u2019s actually quite interesting, don\u2019t you think, Alana? We\u2019re speaking totally hypothetically, and you\u2019re really struggling to find out how another couple might talk about something like this.<br \/>\n[00:25:39] Alana: Yeah.<br \/>\n[00:25:40] Ramit: Sam, how do you think other couples talk about decisions like this?<br \/>\n[00:25:44] Alana: Do you know\u2013<br \/>\n[00:25:51] Sam: I don\u2019t know.<br \/>\n[00:25:53] Ramit: Y\u2019all ever heard a healthy conversation about money?<br \/>\n[00:25:56] Sam: Maybe I haven\u2019t.<br \/>\n[00:25:57] Ramit: Have you ever listened to the I Will Teach You to Be Rich podcast?<br \/>\n[00:26:00] Sam: You know I haven\u2019t.<br \/>\n[00:26:04] Alana: Um, I feel like there\u2019s just a lot of anxious avoidance that we both do. We\u2019re just trying to avoid it, so then we\u2019re not making positive or healthy decisions or understanding how to make them.<br \/>\n[Narration]<br \/>\n[00:26:22] Ramit: Okay, I\u2019m having a little fun with them, but this is actually serious. Let me tell you what I\u2019m noticing. First, it\u2019s actually really important to keep things light, especially as I\u2019m getting to know a couple. So these jokes, these random asides, all of that stuff is absolutely critical to connecting with my guests. It\u2019s not an accident.<br \/>\n[00:26:43] I had someone on YouTube recently ask, \u201cRamit, have you ever considered releasing a version of the podcast without all the fluff?\u201d I just wrote back, \u201cNo.\u201d And they deleted their comment. People who think that small talk is merely fluff miss the entire point of money. That money is not just a series of spreadsheets, but it\u2019s deeply psychological.<br \/>\n[00:27:08] And you can see how this plays out with Sam and Alana. They admit they\u2019ve never had a healthy conversation about money. They can\u2019t even pretend in the hypothetical that I gave them. Most of us are problem-oriented. We know that we have a problem. We love to talk about our problems, but very few of us move to the next step, which is being solution-oriented.<br \/>\n[00:27:33] This is why you had that friend in your 20s who was always stuck in horrible relationships. You\u2019d try to give them advice, and they would just start repeating what that guy or that girl did. And can you believe it? They\u2019re such an asshole. People with problems love to talk about their problems.<br \/>\n[00:27:49] In fact, if you rewind just a few seconds, I joked about listening to the IWT podcast, but it wasn\u2019t really a joke. I wanted to see how they responded. And true to form, Alana went right back into talking about her problems. What this shows you is that until someone is ready for a solution, I can\u2019t really help them. Nobody can.<br \/>\n[Interview]<br \/>\n[00:28:12] Sam: My decisions aren\u2019t always based in reality. Sometimes they\u2019re based in anxiety.<br \/>\n[00:28:18] Ramit: You think it\u2019s possible for you to feel good about money?<br \/>\n[00:28:24] Sam: I do.<br \/>\n[00:28:26] Ramit: Tell me.<br \/>\n[00:28:28] Sam: I think these decisions would be a lot easier. I\u2019m looking at the next four or five weeks, what\u2019s coming out? What\u2019s happening? How much money is in the checking account? So I think the decision making process would be a lot easier if we were more healthy financially because I could say, hey, look. No, we don\u2019t have enough for this. Or, hey, we definitely do. Or, hey, we don\u2019t quite have enough for this. Maybe we can dial it back on some other things to make this, I\u2019m saying car rental, but make this whatever happen.<br \/>\n[00:29:09] Ramit: Sam, it\u2019s interesting that when I asked you, what would it look like and feel like if you felt good about money, you gave me a series of tactical processes. Now, listen, I love a good tactic. I love it. But you\u2019re actually quite adept at describing how you feel about things. Can you just try to connect on the positive side from it? Think about something that you feel really positive about and connect that to money. Even hypothetically, what would it look like and feel like if you felt good about money?<br \/>\n[00:29:41] Sam: I would feel like such a weight was off my shoulders. I would feel so much less stressed out. It\u2019s my main source of stress. I would be able to be more present in my family and my children\u2019s lives.<br \/>\n[00:29:56] Ramit: When you feel stressed about money, where do you feel it?<br \/>\n[00:29:59] Sam: In my gut.<br \/>\n[00:30:01] Ramit: Yeah. The, uh, acid in your stomach, that kind of thing?<br \/>\n[00:30:05] Sam: Yeah, it just starts. Yeah.<br \/>\n[00:30:06] Ramit: Okay. So that wouldn\u2019t be there. And when you feel really good, when you\u2019re watching your four-year-old and your two-year-old play, and they\u2019re giving each other a hug, those moments, where do you feel that?<br \/>\n[00:30:20] Sam: Indescribable. Everywhere. All over my body. My head, my face, my heart, all those places.<br \/>\n[00:30:31] Ramit: I would love for you to be able to feel that way even once with money when talking to Alana.<br \/>\n[00:30:41] Sam: Same.<br \/>\n[00:30:44] Ramit: Yeah. Okay. I believe you can do that. I believe that. And I believe you can even do that even while having this debt that currently sits on your shoulders. I don\u2019t think you have to wait 20 whatever years to pay it off and then feel good. That\u2019s not my philosophy. I don\u2019t want anyone to wait some indeterminate day in the future to finally live their life. I want you to start living a rich life today and a richer life tomorrow, even if you have a ton of debt. But that is my goal. For you to have a plan. And for you, Sam, to feel good about money. Okay?<br \/>\n[00:31:24] Sam: Great.<br \/>\n[00:31:26] Ramit: Alana, hearing that, anything surprised you when you heard Sam\u2019s answers to my questions?<br \/>\n[00:31:31] Alana: It sounded worse coming from his own lips. That was hard to hear.<br \/>\n[00:31:36] Ramit: Yeah.<br \/>\n[00:31:39] Alana: Makes me sad.<br \/>\n[00:31:41] Ramit: Yeah. Why does it make you sad?<br \/>\n[00:31:44] Alana: I don\u2019t want him to feel that way. I don\u2019t think our life is like that. That it is like that for him in his head.<br \/>\n[00:31:55] Ramit: Right.<br \/>\n[00:31:56] Sam: I\u2019m good at hiding it a lot of the time.<br \/>\n[00:32:02] Ramit: You\u2019re good at it means you don\u2019t show it to other people?<br \/>\n[00:32:05] Sam: Right. I\u2019m not saying that\u2019s a positive thing. I\u2019m just\u2013<br \/>\n[00:32:08] Ramit: Hey, listen. As a guy, I completely understand that. I get it. And I also get that that might not always be the healthiest thing. I think what we should do is look at the numbers, and then I have many more questions, but until we look at the numbers, it just sounds like a big, scary amount of debt, but I don\u2019t understand things like the cash flows, and the investments, and things like that. So would you mind if we take a look at that?<br \/>\n[00:32:35] Sam: Not at all.<br \/>\n[00:32:37] Alana: Yeah.<br \/>\n[00:32:38] Ramit: All right. Let\u2019s pop it up here. Sam, uh, read me off the word in bold. So assets, and then read me the number next to it.<br \/>\n[00:32:46] Sam: Assets is $22,000.<br \/>\n[00:32:50] Ramit: Okay. Next.<br \/>\n[00:32:51] Sam: Uh, investments is $2,000. Savings is also $2,000. And debt is $205,000.<br \/>\n[00:33:07] Ramit: All right. Total net worth?<br \/>\n[00:33:08] Sam: Uh, negative $179,000.<br \/>\n[00:33:12] Ramit: All right. What do you think of that?<br \/>\n[00:33:14] Sam: Scary. It\u2019s overwhelming.<br \/>\n[00:33:18] Ramit: All right. Let\u2019s go on to the income section. This time, Alana, I\u2019d love it if you could read off the bold and then the number on the right side.<br \/>\n[00:33:28] Alana: 10,074.<br \/>\n[00:33:31] Ramit: Great. So combined, you to make $120,000 a year. Did you know that?<br \/>\n[00:33:37] Alana: Uh-uh.<br \/>\n[00:33:39] Sam: I don\u2019t look at gross too frequently, so yeah, no, I didn\u2019t know that.<br \/>\n[00:33:44] Ramit: Alana, does this surprise you to learn that you and Sam make $120,000?<br \/>\n[00:33:49] Alana: Yeah. I thought we made $80,000. We should be able to afford a life worth living.<br \/>\n[Narration]<br \/>\n[00:33:57] Ramit: Let\u2019s take a close look at their numbers to paint an even more detailed picture. Their rent is $450, daycare $1,600, groceries $650, clothes $200, and phones $260. Do any numbers stand out to you here? For me, it\u2019s the rent. Paying only $450 is absolutely amazing. But then, this happened.<br \/>\n[Interview]<br \/>\n[00:34:27] Ramit: Right now, how much are you paying towards debt?<br \/>\n[00:34:29] Alana: I think it\u2019s five or $600. Yeah. When I\u2019ve had busier weeks, I try to pay more.<br \/>\n[00:34:43] Ramit: We\u2019re not going to do this anymore.<br \/>\n[00:34:44] Alana: Yeah, I have no idea how to do that. I have no idea how to talk to Sam about how to pay those off when we\u2019re holding balances.<br \/>\n[00:34:53] Ramit: Alana, you never read my book, right?<br \/>\n[00:34:55] Alana: No, but a client recommended it.<br \/>\n[00:34:57] Ramit: And Sam, I know you haven\u2019t read my book, right?<br \/>\n[00:35:00] Sam: No.<br \/>\n[00:35:00] Ramit: Okay. All right. I\u2019m keeping a nearly 100% record of people who come on this show and never read my book.<br \/>\n[00:35:05] Sam: Oh, no.<br \/>\n[00:35:06] Ramit: Um, how long until this credit card debt is paid off?<br \/>\n[00:35:10] Alana: I don\u2019t know.<br \/>\n[00:35:11] Ramit: What the hell? How much is on the credit card?<br \/>\n[00:35:16] Alana: I don\u2019t know.<br \/>\n[00:35:19] Ramit: What? Did you guys do the\u2013<br \/>\n[00:35:20] Alana: I don\u2019t know exactly. Eight, probably.<br \/>\n[00:35:26] Ramit: 8,000 on the credit card?<br \/>\n[00:35:27] Alana: Yeah. It\u2019s a couple of different cards right now, but yeah.<br \/>\n[00:35:31] Ramit: What\u2019d you spend on to get $8,000 of credit card debt?<br \/>\n[00:35:35] Alana: Little things here and there, mostly grocery store, Target runs. A couple of big things, like the flights for our vacation. And honestly, it\u2019s literally a few thousand dollars just from not knowing how to talk about\u2013 it\u2019s one conversation to use the credit card, and then another conversation to pay the bill. And the pay the bill conversation is way harder to have for us.<br \/>\n[00:36:11] Ramit: Because you know to make him uncomfortable, and then you want to undersell it, etc.<br \/>\n[00:36:15] Alana: Yeah. And then I feel really crappy that I\u2019ve added to our debt because I can\u2019t figure out how to talk to my husband. It doesn\u2019t feel great.<br \/>\n[00:36:31] Ramit: Okay. What is the minimum payment by the way?<br \/>\n[00:36:33] Sam: Have to ask Alana.<br \/>\n[00:36:34] Ramit: Alana?<br \/>\n[00:36:35] Alana: Oh, I don\u2019t know. We never pay that low.<br \/>\n[00:36:38] Ramit: Um, so my new rule for Alana and Sam is, you have to know the details of your debt because what is the one thing that\u2019s dragging you down right now?<br \/>\n[00:36:53] Sam: Debt.<br \/>\n[00:36:53] Ramit: It\u2019s your debt. And there\u2019s only really two things you have to know about your debt. It\u2019s the balance and the interest rate. That tells you everything. I already know the interest rate for your, credit cards. It\u2019s probably 24.99 to 26%. It\u2019s high, really high. I don\u2019t know the balance. What\u2019d you say it was? 6k, 10k, something like that?<br \/>\n[00:37:18] Sam: 8, she said.<br \/>\n[00:37:22] Ramit: 8k?<br \/>\n[00:37:22] Alana: Yes.<br \/>\n[00:37:22] Ramit: You want me to just show you how to calculate this right now?<br \/>\n[00:37:25] Alana: Sure.<br \/>\n[00:37:26] Ramit: All right, check it out. So we got a balance of $8,000, correct? 26%. And your monthly payment is 600. It\u2019s going to take you 17 months to pay it off.<br \/>\n[00:37:43] Alana: That\u2019s not bad.<br \/>\n[00:37:44] Ramit: What do you think about that?<br \/>\n[00:37:46] Alana: That, um, I can see that.<br \/>\n[00:37:49] Ramit: Yeah. 17 months.<br \/>\n[00:37:52] Alana: That\u2019s cool, actually.<br \/>\n[00:37:53] Ramit: Want me to show you something even cooler?<br \/>\n[00:37:55] Alana: I thought this was going to stress me out.<br \/>\n[00:37:57] Ramit: No, listen, it\u2019s actually\u2013<br \/>\n[00:37:59] Sam: It stressed me out a little.<br \/>\n[00:38:00] Ramit: I have to you. There\u2019s a massive light at the end of the tunnel. Even when people see, oh my God, I have to pay this debt off for 28 years, even then, they go, at least I know. Let\u2019s look at this. So this number here, your fixed cost number, Alana, what number do you see here?<br \/>\n[00:38:22] Alana: Um, 76.<br \/>\n[00:38:25] Ramit: Yeah. So that\u2019s 76% of your take home pay. Do you know what that number should be?<br \/>\n[00:38:30] Alana: No.<br \/>\n[00:38:31] Ramit: Okay. Sam, do you know?<br \/>\n[00:38:33] Sam: I thought it was anywhere from 60 to 70.<br \/>\n[00:38:36] Ramit: 50 to 60.<br \/>\n[00:38:37] Sam: Okay.<br \/>\n[00:38:38] Ramit: 50 to 60. So at 76, it\u2019s well above the my recommended range. But what do you think that means, that it\u2019s 76 instead of, say, 55?<br \/>\n[00:38:49] Alana: Daycare is expensive, and we need to make more money.<br \/>\n[00:38:57] Ramit: Okay. But what does it mean for you currently on a day-to-day basis?<br \/>\n[00:39:00] Alana: That money\u2019s tight.<br \/>\n[00:39:01] Ramit: What it means is because you have so much spend in your fixed costs, that\u2019s why you feel so stressed out over Target purchases. You think, oh, am I a bad person because I bought these tomatoes? And actually has nothing to do with the tomatoes at all. It has to do with the amount of infrastructure that you are spending on for fixed costs with your current salaries. What do you think about what I just told you?<br \/>\n[00:39:37] Alana: It sounds sticky. I don\u2019t know exactly. It just sounds a little like you\u2019re stuck in a rut. I don\u2019t know. Doesn\u2019t feel good.<br \/>\n[00:39:49] Ramit: Hmm. Okay. That\u2019s a fair assessment. Yeah. Sam, what about you?<br \/>\n[00:39:52] Sam: I was going to say the exact same thing. And if you couldn\u2019t describe sticky, I was going to explain how it also made me feel sticky and what that meant.<br \/>\n[00:40:01] Ramit: Thank you. Yeah. So you both feel stuck.<br \/>\n[00:40:03] Sam: Yeah, no, it makes me feel stuck, for sure.<br \/>\n[Narration]<br \/>\n[00:40:05] Ramit: They feel stuck, but they don\u2019t really understand why. And this is really common with money. You have to remember that most people do not break all their expenses down into four tidy categories and then calculate a debt payoff plan.<br \/>\n[00:40:17] Most of the people who come on the show don\u2019t even read my book. No wonder they feel this overwhelming sense of dread about their finances. It\u2019s just one big ball of bad. One of the things that the conscious spending plan lets you do is break down your expenses into manageable categories. Use it, and you will suddenly be able to see where something is going wrong and how to fix it. You can get the CSP for free from my website. I\u2019ll throw in a link in the show notes as well.<br \/>\n[Interview]<br \/>\n[00:40:48] Ramit: Let\u2019s play a little hypothetical game. Is there anything that we can dramatically cut under fixed costs? What would it be?<br \/>\n[00:40:57] Alana: Um, clothes.<br \/>\n[00:40:59] Ramit: Okay. What\u2019s the number now?<br \/>\n[00:41:04] Alana: Um, I could cut that in half.<br \/>\n[00:41:06] Ramit: All right.<br \/>\n[00:41:07] Sam: Easily.<br \/>\n[00:41:08] Ramit: Okay. Watch the number. So I\u2019m going to cut 100 off your clothes. All right. What just happened?<br \/>\n[00:41:15] Sam: Went down 1%.<br \/>\n[00:41:16] Ramit: Yeah, it went from 76 to 75. Well, directionally, we\u2019re in the right direction. Let\u2019s take the win. All right. Round of applause. We\u2019re going in the right direction. All right, what else do you want to do?<br \/>\n[00:41:26] Alana: There\u2019s nothing else we can do.<br \/>\n[00:41:28] Ramit: Nothing? Really? You gave up after one category? Are you kidding me? Are there any other easy wins you can pick up? Let\u2019s get a little momentum here.<br \/>\n[00:41:39] Alana: Um, I think groceries.<br \/>\n[00:41:42] Sam: We buy marinated meats and stuff, which tend to\u2013<br \/>\n[00:41:52] Ramit: What? You buy marinated meats?<br \/>\n[00:41:54] Sam: Oh my gosh. Yes.<br \/>\n[00:41:55] Alana: They\u2019re so expensive.<br \/>\n[00:41:57] Ramit: Are you guys kidding me right now? Hold on. I\u2019m not really a stickler for groceries. I\u2019m not Mr. Grocery Man. I had a national news organization, and they were like, Ramit, we want to put you on air. This is big feature. And I was like, oh, okay, let\u2019s get on the phone. And then they were like, we want you to give us tips on how to save at the grocery store. I was like, what the hell do I know about saving money at the grocery store? I know one thing. My immigrant mom and dad never, ever, ever in our life bought us marinated meats.<br \/>\n[00:42:27] Sam: All right.<br \/>\n[00:42:31] Ramit: If you\u2019re telling me that, then you\u2019re telling me you have a bunch of other expenses that could be cut from the grocery store. Fair?<br \/>\n[00:42:35] Alana: Yeah.<br \/>\n[00:42:36] Sam: Yeah.<br \/>\n[00:42:36] Ramit: So we went from 652 to 426. Does that work?<br \/>\n[00:42:41] Alana: Yeah.<br \/>\n[00:42:42] Ramit: Wow. Okay. Great. Great. Great. Look at the number at the top. What does that number say?<br \/>\n[00:42:45] Sam: Getting closer.<br \/>\n[00:42:46] Alana: 71.<br \/>\n[00:42:46] Ramit: 71%. Nice job. Take the win. All right. What else you got?<br \/>\n[00:42:51] Sam: So Alana is not going to like this one. In theory, we could cut 400 from daycare.<br \/>\n[00:42:59] Ramit: How?<br \/>\n[00:42:59] Sam: One of our kids goes an extra day. So Alana\u2019s still home watching the one kid. It is for her mental health, so she gets one day with only one child.<br \/>\n[00:43:11] Ramit: Okay, here\u2019s how I want you to think about this. You\u2019ve clearly discussed the mental health part of it, and I think that\u2019s awesome. You absolutely should. You cannot only make decisions based on some random number, but I guarantee the two of you have never looked at the effect of making this change on your money. So would you be willing to entertain just me playing with the numbers for a second? And that way, you understand both the mental health portion and the numerical part. Can we look at that?<br \/>\n[00:43:42] Alana: Yeah.<br \/>\n[00:43:43] Ramit: All right. This is how we make big decisions. We write down how we feel about it. Awesome. And we also want to look at the numerical ramifications. Daycare, instead of 1,636, you\u2019re saying take away 400 bucks a month. Is that correct?<br \/>\n[00:43:57] Alana: Yeah.<br \/>\n[00:43:59] Ramit: All right. Wow. What do you just see? What just changed?<br \/>\n[00:44:07] Alana: Oh, it went to 65.<br \/>\n[00:44:08] Ramit: 65%. We\u2019re within striking distance. I\u2019m not asking you to make a commitment to this right now. I just want you to think about it.<br \/>\n[00:44:19] Sam: And neither am I, just to be clear. I\u2019m not going to be like, Ramit said. Sorry.<br \/>\n[00:44:25] Ramit: So now you see why I am in such a rush to get you to make big changes, like with a machete. Even a 100 or $200 a month can often make a massive change. So I think it\u2019s really important to acknowledge the mental health aspect, but I also want to show you like, gosh, two, three, 400 bucks a month towards debt would be game changing. What do you think?<br \/>\n[00:44:53] Alana: So I have two thoughts.<br \/>\n[00:44:55] Ramit: Oh, I love it. Tell me.<br \/>\n[00:44:57] Alana: We could probably change the cell phone bill a little bit.<br \/>\n[00:45:04] Ramit: I agree.<br \/>\n[00:45:05] Alana: But that was probably about a 100. We have his mom on the plan. I imagine there\u2019s probably about a $100 we could finagle through.<br \/>\n[00:45:17] Ramit: Amazing.<br \/>\n[00:45:18] Alana: We could also talk to her about what we give her in rent and utilities.<br \/>\n[00:45:23] Ramit: You could give her less?<br \/>\n[00:45:25] Alana: If she\u2019s open to it. I initially think that sounds\u2013<br \/>\n[00:45:31] Sam: Terrifying.<br \/>\n[00:45:32] Alana: Yeah.<br \/>\n[00:45:33] Ramit: Here, let me just tell you how I would say it. I love what you just said. That\u2019s just great. I\u2019m going to give you a couple of tools you can use. You can say, look, you know that we appreciate living here. We know that you\u2019re charging us less rent than we would pay somewhere else. That means so much to us. It allows us to raise our family here and to have a stable house. That means so much to us.<br \/>\n[00:45:54] We have been taking our finances really seriously, and we\u2019ve made it a mission. We want to pay off our debt because we want to have a healthier relationship with money, and we want to show our kids how to have a healthy relationship with money. We have a question to ask you. If you say no, we totally understand.<br \/>\n[00:46:16] We currently pay $450 a month. If we were able to pay $200 a month in rent, that would allow us to shave off X months from our credit card debt and be credit card debt free. By blank month of blank year. Would you be open to letting us change the rent that we pay from 450 to 200 a month?<br \/>\n[00:46:44] Alana: Oh, and then you\u2019ll go back to 450 when we\u2019re done. Or maybe I\u2019ll sell the house.<br \/>\n[00:46:50] Ramit: Yeah. You\u2019re like, and then maybe you\u2019ll sell the house and give us a fat stack of cash, like was promised to us, uh, 18 years ago? No, don\u2019t say that. Don\u2019t say that. That\u2019s for another day.<br \/>\n[00:46:59] Sam: Alana definitely shouldn\u2019t say that. I might be able to get away with it.<br \/>\n[00:47:03] Ramit: One step at a time.<br \/>\n[00:47:04] Alana: I think she\u2019d be open to it, Sam.<br \/>\n[00:47:07] Sam: My thought isn\u2019t she\u2019ll immediately say no. So that sounds better than anything.<br \/>\n[00:47:13] Alana: Sounds promising.<br \/>\n[00:47:14] Ramit: Listen, great work, even thinking about this. And when you have this conversation, practice it, record it, because all that stuff I said at the beginning, that\u2019s the stuff that you want to connect. That stuff about your kids, drop that in there. Get those kids in. Put a little cute little picture of your kids. Have them dress up and do a little dance or something. Whatever. It\u2019s really important.<br \/>\n[00:47:40] Alana: They do do that.<br \/>\n[00:47:40] Ramit: Okay. It\u2019s important. This is serious stuff. $200 a month, or 250 a month is a huge deal for you right now. And you\u2019re also respectful enough to say, look, if you decide not to do this, we totally understand. You\u2019re giving her an out. She\u2019s already giving you a very nice deal, so that\u2019s how you go. All right. Great find, Alana. Great suggestion. Should we assume that it\u2019s going to happen? Should we model it?<br \/>\n[00:48:04] Alana: Yeah. Let\u2019s model it.<br \/>\n[00:48:05] Ramit: All right. Love it. Damn, are we at 59%?<br \/>\n[00:48:09] Alana: Yeah.<br \/>\n[00:48:10] Ramit: Round of applause. Great job. Those suggestions came from you. That was lovely. Whoa. Remember, when you speak to your mom, it\u2019s all about how you\u2019re getting financially healthy. It\u2019s not, I want you to pay for your cell phone and take less rent. It\u2019s not that. It\u2019s about how you\u2019re building a healthy financial future for your family. Okay? Great.<br \/>\n[00:48:33] Alana: Um, yeah, that got me excited, and I felt like I just\u2013 we had just discussed at dinner whether we should add the other kid to three days a week and pay even more daycare, but then have Tuesday where I can start working more.<br \/>\n[00:48:52] Ramit: Okay.<br \/>\n[00:48:53] Alana: I know how to have that conversation now because I know what I\u2019m weighing. So if I can add a day at work, probably looking at $300 more a week.<br \/>\n[00:49:09] Ramit: Okay. So 1,200 a month. Okay, great. That\u2019s amazing. Watch the number change. Hold on. 4,567. Oh my God. I\u2019m excited. Are you guys excited?<br \/>\n[00:49:24] Sam: Yeah.<br \/>\n[00:49:25] Ramit: I\u2019m excited. Watch this number. It currently says 59%. We\u2019re increasing your income. 1, 2. Oh shit. I messed it up. Hold on. Oh God. 4,567. All right. 4,567. 1, 2, 3. Whoa. Whoa.<br \/>\n[00:49:46] Alana: What?<br \/>\n[00:49:46] Ramit: Do you see this?<br \/>\n[00:49:48] Sam: Daycare goes up by 400 though.<br \/>\n[00:49:50] Ramit: Okay, let\u2019s fix it. Let\u2019s fix it. 818. Adjust it over here. I\u2019m raising your daycare. Look at that number.<br \/>\n[00:49:57] Alana: Goddamn.<br \/>\n[00:49:58] Sam: Yeah, that\u2019s great.<br \/>\n[00:49:59] Ramit: You guys, this is amazing.<br \/>\n[00:50:01] Alana: Cool.<br \/>\n[00:50:02] Ramit: Okay, high fives all around. I seriously did not expect to get to that.<br \/>\n[00:50:07] Alana: I definitely didn\u2019t.<br \/>\n[00:50:09] Ramit: This is a very, very healthy number.<br \/>\n[00:50:12] Alana: Yeah.<br \/>\n[00:50:13] Ramit: 55%. Right down the middle. Okay. First of all, how do you both feel just looking at that number?<br \/>\n[00:50:19] Sam: Great<br \/>\n[00:50:20] Alana: Yeah.<br \/>\n[Narration]<br \/>\n[00:50:21] Ramit: This may be the first time Alana and Sam have felt good about money in years. Years. Now, of course, this isn\u2019t the whole story. There are a lot of changes to be made, even down to the level of meat that they buy at the grocery store. But what I\u2019m showing them here is hope. And this is real hope backed by real numbers.<br \/>\n[00:50:42] This kind of positive vision is something that tens of millions of Americans lack. When it comes to money, we\u2019ve been taught to save, to hoard, to worry about money. Never to actually enjoy it. If you notice with Sam and Alana, they have a lot of debt, and they can still take control of their money.<br \/>\n[00:51:04] This is the power of feeling good about your finances. You have to remember, we\u2019re not robots. If we feel bad about something, we\u2019re not going to want to keep coming back and keep improving. It\u2019s going to be really hard to want to make changes. But on the other hand, if we feel good, if we feel even a small sense of control, you will find people coming back, wanting to make changes, sticking with it, and being more creative and resourceful than you ever thought possible.<br \/>\n[Interview]<br \/>\n[00:51:34] Ramit: Now, I want to make sure that I\u2019m honest about these numbers, because there\u2019s a bit of shrouding that we\u2019ve done, and I want to make sure you know it. So first off, the reason that you\u2019re able to do 55% is that you\u2019re basically paying nothing in rent.<br \/>\n[00:51:50] Alana: Mm-hmm.<br \/>\n[00:51:51] Ramit: If you were on the open market, your numbers, it would not work. You\u2019d be way above that. So let\u2019s just acknowledge that. Obviously, if you can pay two, three, 400 bucks a month in rent, you take it. Fine.<br \/>\n[00:52:04] Alana: I think we\u2019re very grateful.<br \/>\n[00:52:07] Ramit: The next thing, which is the thing is row 24, the student loan payment, which you are currently not paying. Now, once that kicks in, which is going to kick in fairly soon, that becomes an issue, correct?<br \/>\n[00:52:25] Sam: Yeah.<br \/>\n[00:52:26] Ramit: So Sam, what\u2019s the latest with this company? What\u2019s going to happen with your conversations?<br \/>\n[00:52:31] Sam: So as of today, they offered me a 60% settlement.<br \/>\n[00:52:38] Ramit: Okay. That\u2019s good to know. So just so everybody knows, the reason that they\u2019re doing that is they want to recover what they can, and they know that you are so burdened that right now they\u2019re like, look, we got to take what we can get, even though they could milk it for the next 50 years. If they can get 60% now, that works for them.<br \/>\n[00:53:01] Sam: We\u2019re also thinking about making a counter offer. We\u2019ve been going back and forth, so I\u2019ve been considering going\u2013<br \/>\n[00:53:08] Alana: We\u2019re hoping to get 75.<br \/>\n[00:53:10] Ramit: Okay. All right, fine. It\u2019s worth you negotiating. That\u2019s great. It\u2019s just a business to them. That\u2019s it. But one way or another, payments are going to start at some point, correct?<br \/>\n[00:53:22] Alana: Yeah.<br \/>\n[00:53:22] Sam: Yeah.<br \/>\n[00:53:23] Ramit: All right. So while I think it\u2019s awesome that you\u2019re going to pay off your credit card debt in approximately a year, once that\u2019s paid off, that\u2019s 600 a month that\u2019s going to suddenly free up for the two of you to redirect towards student loans, which will be fantastic. But those student loans are still going to be $1,400 or so, maybe a little less, depending on what you settle on, but still a lot of money. Right?<br \/>\n[00:53:51] Alana: Mm-hmm.<br \/>\n[00:53:52] Sam: Yeah.<br \/>\n[00:53:52] Ramit: So how do you want to deal with that?<br \/>\n[00:53:58] Alana: Sam\u2019s consulting work.<br \/>\n[00:54:01] Ramit: How much are you making from that, Sam?<br \/>\n[00:54:03] Sam: So I just started it. It\u2019s a little side hustle.<br \/>\n[00:54:09] Ramit: Love it.<br \/>\n[00:54:10] Sam: Um, so I am making a $100 an hour right now.<br \/>\n[00:54:14] Ramit: My man.<br \/>\n[00:54:15] Alana: And they\u2019re loving his work.<br \/>\n[00:54:17] Ramit: I have a question. First of all, I think it\u2019s amazing you\u2019re doing this. That\u2019s awesome. That\u2019s extra money. Math teachers are in demand. People hire math teachers as tutors all the time. And they pay very well. Have you ever considered it?<br \/>\n[00:54:33] Sam: I\u2019ve tutored.<br \/>\n[00:54:34] Ramit: How much do you charge?<br \/>\n[00:54:35] Sam: A $100 an hour.<br \/>\n[00:54:37] Ramit: Could you do it again?<br \/>\n[00:54:38] Sam: Yeah.<br \/>\n[00:54:39] Ramit: Okay. I don\u2019t care how you make a $100 an hour. Can you just do it?<br \/>\n[00:54:44] Sam: Yeah.<br \/>\n[00:54:45] Ramit: Okay. Thank you. Thank you. I\u2019m going to show you why. I don\u2019t know. What should I put here for the net increase?<br \/>\n[00:54:52] Sam: Let\u2019s say $400 a week.<br \/>\n[00:54:56] Ramit: Okay. So 1,600 a month. Great. And net that out to what? 1,200.<br \/>\n[00:55:03] Sam: Yes.<br \/>\n[00:55:04] Ramit: All right. 8,771. Watch the numbers, please. We\u2019re at 48%. That\u2019s amazing.<br \/>\n[00:55:18] Alana: I think we have a hard time believing it.<br \/>\n[00:55:21] Ramit: I\u2019m not doing any magic. It\u2019s just math. It\u2019s literally your numbers.<br \/>\n[00:55:25] Alana: Feels like magic.<br \/>\n[00:55:26] Sam: It\u2019s not that we don\u2019t believe you. It\u2019s that we\u2019ve been so down on ourselves, um, that just seeing it is shocking.<br \/>\n[00:55:40] Ramit: Basically, the entire world you\u2019ve been living in is about feeling horrible with money. Every time you talk about money, it\u2019s bad. And I\u2019m like, yeah, okay, you have a lot of debt. That\u2019s messed up. But we can also do a lot of stuff to go on offense with that debt. It\u2019s different because for the first time, you\u2019re going to have to find a way to start feeling hopeful about money. And maybe, eventually, even feel good about money.<br \/>\n[00:56:15] Alana: That\u2019d be nice.<br \/>\n[00:56:16] Ramit: I know you can get there. I know. I see it. Look at this. I\u2019m just going to show you one more time. The numbers don\u2019t lie. These are the numbers you gave me. You told me you can negotiate your rent down some amount, hopefully to 200 bucks. Okay, great. You told me that, uh, you\u2019re going to pay a little bit more towards your debt payments, shave that off in approximately a year.<br \/>\n[00:56:40] Fantastic. And after that, that\u2019s 600 a month in cashflow that can go right towards debt, savings, etc. You\u2019re tightening up your groceries. Your clothes, you\u2019re going to get a little tighter on. Your phone. And then you\u2019re going to earn more. Both of you are going to earn more. Now, here\u2019s the thing. What are you both going to get?<br \/>\n[00:57:07] Alana: Um, our lives back, I guess.<br \/>\n[00:57:09] Ramit: Be specific.<br \/>\n[00:57:11] Alana: Um, we can live and plan for now.<br \/>\n[00:57:18] Ramit: Each of you go back and forth. Ask each other. I don\u2019t think you actually know the answer to this question.<br \/>\n[00:57:22] Alana: Oh, okay. Yeah. Maybe not.<br \/>\n[00:57:23] Sam: Definitely.<br \/>\n[00:57:24] Ramit: If we make all these changes, which actually are going to require you to think differently, talk differently, behave differently about money, what do we get? This should be a primary question you\u2019re asking. Ask each other.<br \/>\n[00:57:36] Alana: I don\u2019t even know what to ask.<br \/>\n[00:57:38] Ramit: What do we get?<br \/>\n[00:57:39] Alana: What do we get?<br \/>\n[00:57:43] Sam: Freedom.<br \/>\n[00:57:43] Alana: Freedom. Accuracy in our relationships with our family members. I want to be able to have a good relationship with your mom that isn\u2019t based on that hurdle. I\u2019m looking forward to not having to think about it when we think about family and emotions.<br \/>\n[00:58:05] Sam: I a 100% agree.<br \/>\n[00:58:07] Ramit: Give me the positive word. When I think about family and our new vision for money, I feel a sense of?<br \/>\n[00:58:15] Sam: Hope for the future.<br \/>\n[00:58:16] Alana: Pride.<br \/>\n[00:58:18] Ramit: Hope. What was that, Alana?<br \/>\n[00:58:19] Alana: For the future. I said pride.<br \/>\n[00:58:21] Ramit: Pride. I love this. Now we\u2019re getting somewhere. We feel pride. We feel hopeful. What else do we get?<br \/>\n[00:58:32] Alana: I\u2019m going to put things on the walls. I\u2019m going to have a house that\u2019s worth decorating.<br \/>\n[00:58:39] Ramit: Wow. We get to surround ourselves with a little beauty.<br \/>\n[00:58:44] Alana: Yeah.<br \/>\n[00:58:45] Ramit: I love that. Very inspiring. Something every day you wake up and you look at, you say, that\u2019s beautiful. I love that. Okay. Sam, I want to hear from you. What do we get?<br \/>\n[00:58:55] Sam: I get to enjoy time with my kids without having to think about all the negative things in my brain.<br \/>\n[00:59:04] Ramit: Love it. Love it. You\u2019d be present. You said that earlier. Four-year-olds are smart. Six-year-olds are even smarter. They really pick up on dynamics. If you were to continue the way that you had been going, by the time your oldest got a little older, what do you think they would have intuited about the way that the two of you handle money?<br \/>\n[00:59:29] Alana: Yeah. They hate money. They don\u2019t talk about money.<br \/>\n[00:59:33] Ramit: Yes. Mommy and daddy hate money.<br \/>\n[00:59:35] Alana: Money makes them angry.<br \/>\n[00:59:36] Ramit: Yes. They\u2019re always tiptoeing around. Um, boy learns that daddy doesn\u2019t talk about money, and mommy is the one who has to bring up money when there\u2019s something to be discussed. And then daddy usually says no. And what do you think happens in his future relationships?<br \/>\n[00:59:56] Sam: The exact same thing.<br \/>\n[00:59:58] Ramit: Yes. And then as for your younger, the girl, what does she learn?<br \/>\n[01:00:03] Sam: She learns that it\u2019s her job to ask men for money.<br \/>\n[01:00:08] Alana: Oh, wow.<br \/>\n[01:00:10] Ramit: She has to validate herself even being in that room. What are you thinking, Alana?<br \/>\n[01:00:23] Alana: A lot. I\u2019m just doing the opposite of everything I stand for and want for my daughter. I want her to do whatever she wants herself and not feel like she needs to ask a man for money.<br \/>\n[01:00:41] Ramit: Yes. And when she thinks about money when she gets a little older, she starts earning a little bit of money, how do you want her to feel about money?<br \/>\n[01:00:50] Alana: Empowered. Informed.<br \/>\n[01:00:52] Ramit: Yes. Keep going.<br \/>\n[01:00:54] Alana: A means to what she wants in her life. It\u2019s atool.<br \/>\n[01:01:02] Ramit: Love it. How about for your son?<br \/>\n[01:01:07] Alana: Same. Um, yeah, I want him to feel empowered and not feel like that it means angry.<br \/>\n[01:01:19] Ramit: That you have to tiptoe around.<br \/>\n[01:01:21] Alana: Yeah. So he can be chatty about it.<br \/>\n[01:01:25] Ramit: Yeah. It\u2019s actually fun. Can I point something out? That is what you get.<br \/>\n[Narration]<br \/>\n[01:01:34] Ramit: Kids model their parents\u2019 relationships with money. Whether you give them an allowance is irrelevant. Whether you send them to this camp or buy them that phone, irrelevant. They watch how mommy and daddy talk about money for the first 18 years of their lives. Are they stressed? Do they say, we can\u2019t afford that? Do they get in fights behind closed doors? Or do they say, don\u2019t tell daddy we bought that? Or don\u2019t tell mommy we bought that?<br \/>\n[01:02:02] By building a healthy relationship with money, you naturally teach your kids that. You don\u2019t even have to create artificial constructs like an allowance. Although, if you want to, you can. You simply live as you would talking about money regularly, discussing tradeoffs in front of the children, and even asking them to get involved as part of the family. For Sam and Alana, I\u2019m excited that they are feeling good about money for the first time in a long time. Let\u2019s listen to their follow ups.<br \/>\n[01:02:34] Alana: Hi, Ramit.<br \/>\n[01:02:35] Sam: Hi, Ramit.<br \/>\n[01:02:36] Alana: So your questions were, um, what surprised you about our conversation? What surprised you?<br \/>\n[01:02:40] Sam: The fact that we can increase our income a lot more. I think we\u2019ve been scared of that, but it shocked me how much we could increase our income by just working a little bit more.<br \/>\n[01:02:52] Alana: Yeah, that was actually surprising too. I found it surprising how much our relationship was affected by our inability to talk about money. And now that I feel more confident about it, it gives me excitement about our relationship, which is really cool. Um, what were your takeaways, is the next question. Um, I would say our takeaway is understanding how to talk to each other about money without being afraid. That\u2019s the big one.<br \/>\n[01:03:12] Sam: That\u2019s your takeaway.<br \/>\n[01:03:12] Alana: Yeah. That\u2019s my takeaway.<br \/>\n[01:03:13] Sam: But yeah, no, we\u2019ve been talking about money a lot better.<br \/>\n[01:03:17] Alana: And tell me what specific changes you\u2019re making. We specifically changed our daycare autopay out of our credit card so we could focus exclusively on lowering that to zero. And we can\u2019t wait to do more. Thanks, Ramit.<br \/>\n[01:03:25] Sam: Bye.<br \/>\n[01:03:26] Ramit: Thank you, Sam and Alana, for coming on the podcast and sharing your story. If you have enjoyed this, two favors to ask. Number one, go on Apple Podcasts and please leave a written review about this podcast. It really helps us grow the podcast. Second, get on iwt.com\/podcastnewsletter. Every Saturday, I send out a new email on money psychology that I want you to read. That\u2019s at iwt.com\/podcastnewsletter.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alana and Sam, 37 and 36, have two kids and $157,000 in student loans\u2014loans which his mother assured would be paid. They haven\u2019t been. Instead, the debt has tripled since he left school. Their home life has suffered as a result, as the family currently lives with Sam\u2019s mom to save money. This episode is [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"","_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[290],"class_list":["post-118954","post","type-post","status-publish","format-standard","hentry","category-podcast-episodes"],"acf":[],"aioseo_notices":[],"modified_by":"Vika DD.NYC\u00ae","_links":{"self":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118954","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=118954"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118954\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}