High income does not guarantee financial security; the key to financial well-being is managing fixed costs, building savings, and developing a shared family money philosophy. Couples who feel financially stretched despite earning well often have fixed costs consuming 80%+ of their income, low savings, and emotional spending patterns that prevent them from achieving their financial goals.
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"We make $167k. Why do we feel poor?"Added:
$167,000.
What do you all think of that income?
>> I'm super proud of the work that we've put in, but we don't have enough.
>> It's kind of like always a struggle, and it makes me sad.
>> I am the one with the spending problem, and I have asked Amanda to make me stop.
>> I have a hard time saying no. Money is just not my thing.
>> You have a crisis right now. You're spending more than you make every month and you only have $13,000 in savings.
>> Yeah.
>> What do you think is going on here? I know what to say to eventually get what I want >> with like money. We've seen how each other maneuvers with it and so we need each other to do the bad thing. If I keep spending like this, are we going to have enough to retire at a comfortable age and enjoy my life with Amanda moving forward? How are you going to do that? I don't know how people just turn that switch.
Why is it that you make good money, but you still worry about it? Today, we are going to get into that very question that plagues millions of people. I'm going to speak to Drew and Amanda.
They're married. They're in their mid-30s. They have a six-year-old daughter and they make a combined $167,000 a year, but with low savings and high fixed costs, they're basically one emergency away from being in serious trouble. Let's take a look at the numbers. I'm looking at their conscious spending plan or CSP. If you want my help with your CSP so you can understand your four key numbers, join my money coaching program at iwt.com/moneycoaching.
Assets $925,000.
Investments $454,000.
Savings 13,000. Debt 568,000.
Net worth $824,000.
Now, let's look at their fixed cost.
89%.
Right there. That's the ballgame. That explains so much. Investments at 4%, savings at 2%. That also is very explanatory. guilt-free spending at 5%, which I pretty much don't believe without even talking to them, but we'll see. Drew writes, "If I lost my job tomorrow, lifealtering negative results would happen immediately." Drew is right to be concerned. They have a net worth of close to a million dollars, but at the end of every month, they still feel broke. And the question is, what is going on here? We're about to find out.
Let's meet Drew and Amanda. Andrew, you wrote something in your application that caught my eye. You said, quote, "I am the one who handles the finances, but I am also the one who has the spending problem. I hold resentment towards her that she never looks at our bank account, yet I am the one who says, "Let's go out to eat." I have asked her to tell me no. But honestly, that is not her job. If I lost my job, we wouldn't be able to survive a couple of months with our fixed costs. Is that a pretty accurate representation of why you are here today?
>> Yeah, absolutely. It's a representation of why we're here today.
>> And um Amanda, did you also participate in the application or was it just Drew?
>> It was just Drew.
>> Ah, that's interesting. Drew, what made you decide to want to apply to speak to me?
>> I wanted to speak to you because I feel like I am the one with the spending problem. I need some help and guidance with how I should spend my money and I have asked Amanda to make me stop. Uh but again, it is not her her job.
Amanda, what's your take on this? I wish I was more involved. And I I've tried, but it always is just like a day or so.
And then I'm like, "Oh, he handles it so much better than I do." And I know that I have a hard time saying no. Um cuz I like the idea, too. And then if someone else is signing off on it, I'm like, "Sure." Cuz it wasn't coming from me.
Cuz I'm not a spender. And so I find it harder to make those judgments on my own. And so when I'm like, "Oh, someone else is on board. Let's let's do it."
And so like Drew is the planner for vacations. And I'm always so thankful cuz if it was up to me, we probably wouldn't go.
>> In a heterosexual relationship, it's almost always the woman who applies. So this is quite unusual and I really appreciate it. How long have you been married for?
>> Almost 13 years.
>> Kids, one one daughter. How about making decisions around major purchases as a married couple with a daughter? How do you go about making those major purchase decisions?
>> Drew gets an idea. I'll start with a little bit of um hesitancy of like are you sure like this seems expensive or cuz I tend to get very comfortable even when we lived in an apartment. He was like we should buy a house and I was like oh my gosh no way we can't afford this. Let's think of a time in the last 6 months where you were not on the same financial page. Does something come to mind?
>> Yeah, absolutely. Uh I kind of like to look around the house to see what could use improvements. Uh I had this idea that we needed more storage um with with our daughter and why don't we put in some uh cabinets u in our living room.
We could have easily boughten, you know, two things off of Amazon to put on each side that has cabinets, but I decided I wanted to go all out and give uh a business a call that where they would build the cabinets. Uh we had them come to our house, price it out. I expected it to cost anywhere from 2,000 to 3,000. Uh Amanda was probably shooting in the ballpark of a,000. It ended up being about 5,500.
Um, when I was going through the decision process, I looked at Amanda and I just gave her the head nod and a little wink and said, "Let let's do it."
And she said, "Okay, sounds good. What's that?" I'm married, too. I didn't know that move.
>> I could just get my wife to agree on everything by just winking at her. Is that it?
>> Get in tight on this. I could wink on both eyes. Who knew? All I have to do and I got to give a little smile. That's a little difficult for me, but let me try. Hold on. I'm imagining um uh I want to buy um an antique ceramic from Kyoto and it costs uh $9,500 for a tiny um thing in the size of my hand and uh I need it. I need it to put right here.
Hold on. My wife is looking at me like, "Are you sure?" And I go like this.
That's it? Yeah. Yeah, >> I learn something new on this podcast every day.
>> All right, Amanda, what was it like from your perspective? What What do you remember him saying? Actually, should we just recreate the conversation?
>> Yeah.
>> All right, let's do it. All right, so you know, the the person is coming over, the vendor to give the quote. Pick it up from there, Drew. Amanda, uh, I think that these cabinets would look great.
Uh, might add an extra little value to the house if we ever decide to sell. I think that we we have a little bit of money from taxes that are coming our way. Uh why don't we pull the trigger and have these put in?
>> Are you sure that we really need those?
I mean, I I think I've seen something like that in like Amazon or IKEA. Like maybe we could just do it ourselves.
>> That is true, but they are going to be built-ins and they can probably do it in a day. Um and we do have a little bit of cash on hand.
>> Mhm. They were not very handy. So, it' probably just be a pain and uneven. So, okay. Maybe we'll just have them come and we'll like talk to them and see what it is. But yeah, it's like going to be like 1,500, right?
>> I was thinking more in the ballpark of 3,000. Okay, let's pause right there.
>> Great work. Actually, really helpful to see. Thank you. Would you say that was like pretty accurate as to how the conversation went?
>> Uh, yeah.
>> Mhm.
>> Okay. All right, zoom out.
>> What role was each of you playing in that conversation? Amanda, >> I was trying to be like the levelheaded.
>> Okay. Against what?
>> Against the spender. And so it's like, oh, I did my part like to say no. So then I can kind of go back and be like, I tried to say no to this thing. For me, I almost kind of feel like the big bad wolf when she's saying no, her house is made of straw.
>> If I blow and blow, I eventually blow that house down >> and kind of get what I want. I I think that's a really good description. I was thinking when you were talking, I was visualizing. I kind of saw it like >> I'm getting I'm getting pretty I'm coming at you. Hey, what about this?
What about that? Try this. No, we need it. It's going to raise the value. Like lots of arguments.
and Amanda is playing her part. Okay, now that we're kind of agreeing to all these things, we're seeing it in a different light. What do you both make of the role that you're each playing?
>> I don't like it. I don't like my role. I don't like the idea of like a big bag of wolf either, though.
>> No. And I didn't mean it as like I'm angry and you want something. It's more like I know my way to blow that house down. I know what to say to eventually get what I want. What do you think about your role, Drew? Do you like it?
>> No, I feel like we I need to work more on being a team, but I feel like I need to do a better job of knowing my wife and listening to her instincts and kind of taking on that role where we are doing it more together than just me coming up with something up in my head and trying to move forward.
Can I ask you both, do you know other couples with this dynamic?
>> I feel like my my parents have a little bit of this dynamic. My dad usually is the the spender and kind of gets what gets what he wants as well. Amanda.
>> Yeah. Um my mom was in charge of the money and my dad was the spender.
>> In a way, it already explains so much.
If the only dynamic you have ever known is that one person is trying to convince the other to spend money and then the other person has this kind of not particularly strong counterargument and so basically the person who brings it up pretty much gets what they want.
>> Is it really any surprise that that's what you're going to do?
>> No.
>> Can I ask you something? Do you think that my wife and I have that dynamic?
>> No. I would assume you two uh discuss big travel, big purchases.
>> What's different about us versus the dynamic that you have?
>> Nothing really comes to mind. Uh what difference is I You're in a loving relationship with with your wife. You've made a conscious decision decision to do it together. Um yeah, Amanda, what do you see? I'm wondering if it's like both having confidence in where you're at, where you stand, and that's like you don't have to convince the other and you're not you're not like waiting for the other person to give the green light.
>> I like that. Yes, you are totally right.
>> Mhm. Is there a part of your relationship where there is no convincing one or the other? It's we are both knowledgeable. We are a team.
>> I think in every other aspect.
>> I couldn't agree more.
>> Yeah, we are like such a team like parenting with friendships like we're always on the same page. So, it's really just with money. What made you get on the same page with your daughter that has not happened with money?
>> Sounds cheesy, but love. I guess the love like we love our daughter and maybe that love of money isn't necessarily there cuz money is hard to understand fully.
>> Okay, Amanda, any other perspectives? I was thinking like the respect with how like what we want for her and we like respect each other in that regard, but with like money, we've seen how each other maneuvers with it. And so it's always been kind of this we need each other to do the bad thing.
>> We need each other to do the bad thing.
Give me an example. like kind of going through how we went through the cabinets. It's like Drew needs me to say okay so that later he's going to say you said okay too like you didn't say no you didn't stop me and then I do the same thing on the opposite of like I gave all the I said no >> and you did it without me in a way it's like semi-related to flirting as I'm seeing flirting like >> you send a signal but you're not too aggressive about it there's plausible deniability ility, but the right person can pick up on the clue, etc., etc., right? It's not written in black and white. It's very murky and great by nature, >> and you've been married for a long time and you have a six-year-old daughter. It seems like things are fine. So why is it a problem now >> as we are getting into our 40s? We are getting closer to the age of retirement and it's becoming like oh my goodness.
>> Mhm.
>> If I keep spending like this uh are we going to have enough to retire at a comfortable age and uh enjoy my life with Amanda moving forward? So I kind of think that's where >> where that came from.
>> Okay.
>> Yeah. And I feel like too, maybe for the first time we realize the pattern um of like, oh, we get some money and then we have fun. And don't get me wrong, I benefit from this. Like I love it, too. But um it's just like we can never just let us have money.
It's not a good dynamic to depend on your partner to say no, especially when you know they're not really good at it.
It basically just allows both partners to create this charade. Hey, I'm going to kind of ask you what you think.
You're going to kind of say, should we really do it? And then we're just going to do it anyway. This is not real. If we want to live a rich life, we need to live in reality. We need to be honest about where we're spending our money, what we can afford, what is important to us. And right now, there's a lot of tap dancing around the truth. When I was talking to them, I started to realize I don't think they know any other way. I think this is what they know. And that actually makes me feel a little bit more compassionate to them because if they have never seen another couple's dynamic, how could they ever do it? It's actually one of the reasons that I started this podcast because I wanted to know how other couples talk about prenups because we were doing it. It's all behind closed doors. None of this stuff is public. And I'm like, I can't even figure out how people are talking about this and I'm supposed to know all of this stuff. So, when couples struggle with money, I feel a lot of compassion because you can't find this material out unless you listen to these couples on this podcast. We're going to take a look at the numbers right after this. When I was thinking about quitting my last job to do I will teach you to be rich full-time, I created a rule for myself.
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>> Should we take a look at the numbers?
>> I think we should.
>> All right. Um, let's take a look at the CSP. I'm excited. Why don't we start with the net worth box and I would like Drew to read off the word in bold and then the number in full next to it for this entire box, please. Assets uh 925,434.
Investments 454,580.
Savings 13,000. debt 568,285 for a total net worth of 824,729.
>> What do you think about those numbers?
>> I am very happily and privileged that we've had jobs where our companies have matched our 401k and we have taken advantage of that. So, um, extremely happy with our total net worth. The only thing that makes me a little taken aback is about half of that is a home.
>> And I don't know like how do you ever get that money without selling it? And Amanda, what do you think about those numbers?
>> I think they're pretty good. Um, based on the limited knowledge that I have, um, I'm very happy with where we're at.
I mean, I know it includes my student loan debt in there and that makes us uneasy. Um, but overall I think it's pretty good.
>> What do these numbers mean to both of you?
>> I feel like we worked really hard to get where we are um getting jobs right out of college uh in the corporate world and kind of working working up the ladder and putting away uh our money in our 401ks. Um the only number that really jumps out to me is that savings uh being so so low. Um, I think that would be a a month's worth of fixed fixed cost. So, that number really jumps out at me. What about for you, Amanda? What does it mean to you?
>> Mhm. I think I think the biggest piece is like, oh, we might be able to retire >> at a reasonable age. That's kind of where my mind goes.
>> I'm guessing you have not like run the numbers carefully on your retirement compounding, that kind of thing. Would that be fair to say? Um, I've looked at like a projection.
>> Okay.
>> And seeing where it's headed, I I feel pretty good about it.
>> Oh, that's good. Wait, you have this?
I'm quite surprised right now. The way you're talking about it was like I feel like maybe we can retire.
>> I think I'm waiting for someone to say like you're way off. And so that's why I kind of approach it that way, I guess, because I'm just trusting, you know, projection.
in my Charles Schwab like you know portfolio manager.
>> You find yourself minimizing your own knowledge a lot.
>> Yeah. Oh yeah.
>> Yeah. I hate it. I don't like it.
>> I really I'll give you an example. So >> okay, >> there's this thing when I take pictures with people.
>> It happens when I'm in pictures with women. And you know what women will often do when they're in a group photo?
You you you know, Amanda, tell me what do you do sometimes when you're in a group photo? uh say like turn to the side.
>> Yeah. And >> the sorority squat, the squat down, right?
>> It infuriates me. I never allow it. I always say, "No squatting. Stand up tall." And very, very commonly someone will say, "What about the people behind me?" I go, "Let them deal with themselves. They'll figure it out.
They're adults." So, I have vivid memories of this photo we just took. I was on tour last year and I was with my team and we were taking a a beautiful group photo and what do you know? People start to squat down. I'm like, "Stand up. We have room for everybody. Stand up. Take up space." So Amanda, I'm going to ask you on today's conversation to >> take up space.
>> Like I think you might be a lot more knowledgeable than you're letting on.
And if that's a If not, that's okay.
Tell me. Never never come down on anyone for not knowing something.
>> But if you know like you're like, "Oh, I happen to run a compound interest projection for both nominal and real returns for the next 45 years." Tell me, I love it.
>> Cool.
>> Got it.
>> All right. So, you all have a net worth of $824,000. You're in your early 30s, correct? Mid30s.
>> Mid-30s. All right.
>> We're going to look at what it means.
>> Yeah. But first, we need to understand more about >> income and expenses. So, this time I'm going to ask Amanda. Amanda, can you read off the combined gross monthly income number for your household?
>> Gross monthly income combined is 13,911.
>> Great. For a household income, annual income of $166,932.
What do you all think of that income?
I'm super proud of the work that we've put in and our our careers and I couldn't be more proud of Amanda.
>> Who's the one who makes um uh 8521 per month? That's Drew. And 53.90 this is gross is Amanda. And that's with a new business.
>> Yes. And I think the part that has been hard for us is we used to be more equal.
>> Mhm. And it's not, we don't care about like bread winner, but it was like mine took a dip and so it was like adjusting to that.
>> Yeah, that makes sense. When you took a pay cut, Amanda, to start your own business, did you and Drew cut your household expenses?
>> Overall, I would say no. We did not change our monthly expenses.
>> Okay.
>> They never do.
>> They never do. Let's continue on with the fixed costs. Here we go. This is where it gets fun. All right. M >> let's see here. I'm looking at the fixed cost number. Whoa. What's that number you see, Drew?
>> I just called 89%.
>> 89%. That's the ball game right there.
It means that you are >> not having much money afterwards.
>> Yeah, exactly. It means you're spending more than you make >> every month because because fixed cost is just one component of expenses. So, we will drill down into fixed costs in a minute, but first let's look at investments 4% and noting that you are making a monthly contribution of $1,500 a month total to your 401k.
>> Mhm.
>> And then we go down to post tax investments and we have 4% or $350.
Let's go down to savings at 2% and that's 200 bucks a month. And then finally, guilt-free spending at 5%, but I don't believe that number. Do you?
>> I wouldn't either. Absolutely not.
>> It's probably more, but that's concerning because you're spending more than you make every month >> and you only have $13,000 in savings.
>> Mhm.
>> This is a real problem.
>> Mhm.
>> Yeah.
>> So, what do you think is going on here?
I think we have gotten comfortable with going to events, going out to eat. Uh, I've also gotten comfortable with telling Amanda that we're good. We don't need to cook dinner tonight and we we can go go out. We just decided to turn a blind eye to our commitments on our monthly fixed costs and our guilt-free spending overall.
>> What about you? Not we, but you, Drew, with me. Uh, it sounds like an excuse overall, but I I do work from home 24/7, five five days a week, uh, where I feel like I want to go out after after work.
And I'm I'm the one that kind of pushes to going to events and and going out to eat to feel some resemblance of being outgoing and talking to people.
And I've created that issue on a monthly basis.
>> Okay. Amanda, what do you think's going on here?
>> We don't know how to say no.
>> We just do what we want to do and get what we want to get. And I think I mean maybe it's a lot of me not saying no.
>> While I agree there are definitely um relational dynamics here with the two of you, I'm interested in what do you think is going on here from Amanda's perspective? What is your role in this?
>> Maybe having no vision into what's going on and so I'm just I'm not taking action.
>> You're not participating in the finances. I agree that's probably a problem.
>> Is there a vision of like what your family finances should be? Um >> money rules or policies, philosophies in your family? Do you have those?
>> I'd say no.
>> Okay. Do you have them for parenting?
>> I would say yes.
>> Yeah. Absolutely.
>> Yeah. It's very common. Every parent >> or couple of parents has some sort of philosophy, you know. Um, in our house we take off our shoes or we eat dinner together or we don't use curse words and we clean up our toys, whatever. Every parent has some philosophy. It is peculiar to me that very few people have an explicit philosophy on money.
>> Yeah.
>> Part of the problem here is that there's no philosophy. It's just like, hey, what do I want? And when you live in America, >> you are the downstream recipient of trillions of dollars worth of marketing dollars being spent to get you to spend more money.
>> You have very little shot of trying to brute force your way against these companies >> unless you have a philosophy.
>> Okay.
>> All right. What have each of you do for a living? I'm a marriage and family therapist associate working towards lenture.
>> Great.
>> And Drew? Yeah. Uh I'm a senior onboarding analyst uh for an insurance company. Amanda, as a soontobe licensed therapist, >> do you bring any of that skill set to bear when it comes to money and your relationship?
>> Uh probably more so the relationship, >> not bring it to the money aspect. Do you think you could bring those skills when it comes to money?
>> Yeah, >> I bet you could. Why haven't you? If you, if you had to guess, why haven't you?
>> I think it's maybe a confidence piece.
>> Yeah, >> I feel way more confident with relationships.
>> Money is just not my thing.
>> Money is just not my thing. I like when people say that. It's like um It's like you never hear someone saying like food >> is just not my thing. Oxygen is just not my thing. Like money is what allows you to have that plant and that doorork knob behind you. It's what allows your daughter to have a roof.
>> Mhm.
>> So maybe when we think about money a lot of times like the word and the concept of money, we immediately jump to all these like arcane concept. But when I think about money, I think about you all taking a family trip and I think about the ability for you two to go on a hike and get an ice cream on the way home.
Like >> money can do those simple beautiful things. I think about if one of you gets sick or injured or a tire pops on your car to be able to go and get that fixed >> without stress. So maybe maybe there is something here about the way that we envision ourselves.
>> We have Drew who says, "I work from home and I need relief. I need some semblance of being with people."
>> Well, if that's the way you view yourself and money, then you're going to spend it, right? You have now automatically given yourself justification. There's Amanda saying, "Uh, you know, I don't know. I'm not really as confident. Oh, I'm extremely confident when it comes to the relational skills, but money, no, it's just not my thing. But actually, it has to be your thing. It actually has to become a core competence of your relationship if the two of you want to live a rich life.
>> Yes.
>> Simple as that.
>> Yes. And I think that's exactly why we're here.
>> Good. Good. I'm glad you are. I like being told, you need to get good at this.
>> Yeah.
>> You need to. I don't think anyone in our adult life tells us this.
>> Like, you know what? You actually need to get good at this.
>> That's it. There's no other way out. So, if we go forward in today's conversation with that in mind, would the two of you be okay with it?
>> Yeah, I think it's needed.
>> Great.
>> Let's dig into your fixed costs. I want to put these back up on screen and let's talk about the actual numbers here because your fixed costs are 89%. And this is it right here. If we can fix this, >> we can fix a lot of other things. If we can't fix this, game over.
>> Okay.
>> Okay.
>> Okay.
>> So, we're looking at your uh rent or mortgage. Is it a mortgage?
>> It's a mortgage.
>> Okay. $3,235 or 23% of gross.
>> That's not bad. We like to see that number um you know, at 28% or lower, even though in high cost of living areas that's difficult. So the fact that you're at 23 is nice. That gives you some margin to play with. So then, so then I go like, hm, what else are they spending on to get to 89% of a very high income? Your utilities are 580, insurance 400, car payment is $914 a month.
>> How many cars is that?
>> That is two cars.
>> Two cars. And does that include gas and stuff like that?
>> They are electric.
>> Oh, okay. All right. Debt payments are 600 bucks for a student loan. Groceries, 800. That's pretty reasonable. Clothing and kids activities, 400 bucks a month.
And then we have this big chunk here.
Your phone, which is 30 bucks, but you're 15% miscellaneous, including kids birthday parties, Amazon purchases, and random items.
>> Mhm.
>> That's a lot for $1,120 a month.
>> Yeah.
>> And then finally, subscriptions for $312 a month. What do you notice about all these expenses >> besides the miscellaneous?
They seem like they are actual fixed costs that can't go away.
>> Yeah, maybe some of it can go away.
Subscriptions at 312. We could knock that out right now.
>> Mhm.
>> What else? What do you notice, Amanda?
>> I'm I don't Nothing is like jumping out at me.
>> What about the cars? One car is a lease.
You're leasing. What are you leasing? A Tesla Model 3. Are you doing it because it was um like super cheap?
>> It was It was super cheap. Yes. And then we have another Tesla that we bought.
>> Can I ask you something? When you went in to make a purchase, how did you know how much you could afford?
>> I think we just looked at how much it was a a month. This is exactly how fixed costs get higher and higher. I don't mind if people go and buy like a bag of candy or they go out and eat once in a while. Like I really could not care less. That has very little material effect. That's asking a $3 question.
That's why if people want to have coffee, I get the coffee.
>> Yeah.
>> But I am extremely protective of fixed costs because once something becomes a fixed cost, it is nearly impossible to get rid of. Like there is no real easy out for these cars. There just isn't. A house is the ultimate. It's very, very difficult to get out from that. Mhm.
>> And so while I am super loose and relaxed about candy, buying a drink or whatever, that's a one-time expense. But for something that is either recurring or large and fixed, >> you have to be very protective. Like in many ways, the default should almost be no, >> unless we plan for it and we know exactly that making this purchase plus all of the maintenance that we need to factor in is going to keep our fixed cost below 60%. All right. Yeah. Now, >> you didn't do that. Most don't. And that is how most end up with really high fixed costs.
>> Okay. I'm not here to beat you up. I just want to explain how we got here.
>> Yep.
>> Absolutely.
>> Makes sense.
>> All right. Down to your guilt-free spending. Um, what else are you spending money on?
>> Mostly dining out. I would say 80% of that is dining out and then >> three times.
>> No, bump that up. I was going to say six. Keep going. It's probably nine.
>> Probably if I don't know. There's some magic number. If we factor in buying a coffee, that counts as eating out cuz sometimes you buy a coffee and a pastry.
If we factor in lunch out or breakfast occasionally, blah blah blah blah blah.
>> Yeah.
>> Yeah.
>> We're talking what?
>> Six maybe more times a week. What do you think?
>> Yeah. Six to eight times a week.
Absolutely.
>> Yeah. That's a lot.
>> It's a lot. Vacation.
>> We just got back from vacation two days ago.
>> Oh wow. Where'd you go?
>> Uh we went to Boston. Okay. Let's talk about how you planned the financial part of that.
>> We had a free place to stay uh for the weekend. Um so we did have a little bit of extra money from Amanda's uh taxes um as she puts away a certain amount and she had leftover.
>> Um so we were able to purchase the the plane tickets. Um, and then it happened to coincide with when I usually get a bonus and we put a certain amount of money away for the trip itself.
>> How much did the tickets cost and how much for the trip?
>> The the tickets were $1,200 and the money I put aside was $1,000. So, the bonus money gets you it gets spent pretty quickly. Would you say that happens regularly? It seems like it.
>> Yes. You're kind of catching us at the perfect storm right now as this is tax season and bonus time for us >> and this is usually our timetable of where >> things go >> send our money. Yeah.
>> Yes.
>> So you get tax money, you spend it, you get a bonus, you spend it. When did this start happening?
>> Ever since our annual bonuses when we started corporate.
>> Yep.
>> Yeah. And I used to get a very similar bonus and now we don't get now I don't get that anymore. Do you spend less because you don't get the bonus?
>> No.
>> Do you know any other way?
>> I don't think so. Because I think a lot of it it comes down to like we we we worked really hard like we deserve a treat or we deserve like something with this cuz this bonus is like you worked really hard all year.
>> You work hard so you deserve a treat.
Who taught you that?
>> I might have learned that from Drew.
because I did not grow up going on vacations and >> yeah, I mean, we went on as a family, we went on yearly vacations that I can assume came from my dad's bonus in taxes and we went on vacation every single year and I wanted to provide that for my family as well.
>> Did your dad ever explain the finances of these vacations? He never did explain them, but I on good authority I would believe that they came from his yearly bonus >> that he probably I'm following in his footsteps.
>> You going to explain this to your daughter?
>> I would like to get some tools and help explain it better and say that we changed our ways h >> so she has a better understanding of money and savings. So when she's old enough, I will explain to her the patterns that me and me mostly and Amanda had. And I think we can explain to her what we changed and the tools that we learned and how we >> moved forward after this.
>> You talked to her about money today or No, >> we do a little bit. Um yeah, we do. Um >> what do you tell her?
>> Save as much as possible.
>> Um >> I think trying to >> Well, I need to put this CSP back up on screen. Let's just let's just everybody take a look. I love seeing cognitive dissonance happen. Hey, what's that number right there? What does it say next to savings?
>> There's a big old 13,000.
>> 13,000 on a 166,932 income. God, I love my job.
>> Mhm.
>> Mhm.
>> Does she see mom active with the money?
>> No. Yeah, that one hit home a little bit >> because I don't want her to follow what I'm doing.
>> Yeah.
>> And I don't want her to be wishy-washy.
>> Yes.
>> Yes. I love that you said that.
>> I want her confidence.
>> Yeah.
>> Which can only come from your confidence.
>> And the two of you being confident.
>> Yeah.
>> What I would love is for her to build that confidence.
for example, by mom saying, "Money is really important. Here's why.
>> Here's what it means to us. Here's the choices we make. Here's our philosophy on money." She should hear that. And she should see mom and dad talking about money and smiling and giving each other a hug after they talk about money.
>> And of course, you can make it age appropriate, but she should see that. It should almost be theatrical.
>> Mommy and daddy are going to go over here. We're going to talk about money for 15 minutes. We need a little bit of quiet time. Pull out a clipboard, talk about whatever, >> have a serious conversation, smile, give each other a kiss.
>> Great. She should see that.
>> Yeah.
>> These are the kind of things that let her know. And of course, when you do this, it's actually not just an act. It actually is mom getting involved and it is dad getting involved and talking together and smiling. And guess what?
The more you do this, the more real it becomes. And then kids see it.
>> Mhm.
>> Yeah. Yeah.
Whenever I talk to parents on this show, they almost always tell me that they have a philosophy about parenting. They have certain beliefs about sleep or feeding their kids or reading books at night. But when it comes to money, very few people have a philosophy. Like what are you talking about? I spend on stuff.
I have money in my sav philosophy what?
And I think there's one crucial reason why. And that reason is that when you have a baby, you have a very urgent need to learn how parenting works. You have to learn it and you have to do it now.
But with money, there's no such urgency.
Even on this show, I have people who come on, they are a month away from running out of money and they're perfectly calm about it. But with a baby, you have to learn. I want you to have just a little bit of that urgency for money because it is so important. If you get it right, you can live a very, very rich life. That's why I'm pushing for them to develop a philosophy on money just like they have a philosophy on parenting. I don't think he realizes how dangerous of a financial situation they're in. Amanda definitely does not because she's pretty disconnected from the finances. But he, the one who logs into the accounts every day and is in charge of the money, doesn't understand how close they are to financial ruin.
That's what I want him to understand. I was at a dinner recently and my college friend mentioned somebody I had not thought about in about 20 years. Out of curiosity, when I got home, I Googled him and within the first few results, I learned he was married, name of his three kids were out there, and exactly where he lived down to his street address. That took 2 seconds of searching. Now, if you want all that information out there, great. Most people do not, which is why I pay for and use a tool called Delete Me. I don't want data brokers or random people knowing my personal information, and I bet you don't either. Delete Me is a subscription service that removes your personal data from the internet. We're talking about things like your full name, email, phone number, address, even your parents' names, all found and removed. They've been the leading expert in personal information removal for the last 15 years. They were recently named Wire Cutter's number one data removal service, and I personally use and pay for Delete Me, and I love it, and I know you will, too. You'll get 20% off all consumer plans when you go to joindeleteme.com/res and use promo code ra at checkout.
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I want to understand a couple more things. the debt. So, we have $568,000 of debt. How much of that is the mortgage? How much of that is student debt?
>> Yeah. Uh $470 on the mortgage.
>> Mhm.
>> Uh 68,000 on the student loan and then 28,000 on the car.
>> All that sounds reasonable to me. I noticed there's no child care. How are you managing that?
>> Uh elementary school, public school system. Great. Which amazing. Have you thought about what expenses might happen from now until later? I do see that you're putting money aside. I believe it's a 529.
>> Yeah.
>> What about between now and college? Are there any big expenses that you're thinking? Me and Amanda did discuss uh private school. So, that would be a a big expense. And also, as children get older, the sports and activities also get more expensive. If you kept things going the way they are now, you know, and we just fast forward like five years, >> how would you handle it?
>> I think Amanda and I would just pay for it to the detriment of our own finances.
>> Has anyone ever told you no?
>> Uh, no. I had a very privileged life. I was able to my parents were very generous and and gave me an amazing childhood. Uh Nike employee store, shoes, vacations.
Um so overall I am not used to hearing no.
>> You ever tell yourself no today?
>> Not often.
>> Not often.
>> How about your family?
>> I do not tell them no. No. There are no nos in your life.
>> What has the result been? The result has been reaching out for help because I couldn't do it on my my own put me and my family in a predicament that we don't have enough savings if something were to happen. And it's not a good feeling.
>> You would run out of money in under two months. That's correct. Yeah.
>> Do you think about that?
>> Yeah, it's something I think about often.
>> To push on that gently, like if you think about it, it's one thing, but you know, you have this tax refund, >> thousands of dollars. You have this bonus, thousands of dollars.
>> Mhm.
>> Why not go, let's take that money and put it in a savings account. We try to have fun in the moment, which is sad to say. Uh, we try to go out and go to events and materialistic items just to kind of feel good in the moment. Um, it feels like that's something that I should do is take them out. Um, even though putting money away is probably showing more love to my family.
>> Mhm.
>> What do you think, Amanda? makes me feel like what is missing that we're just trying to fill >> with either stuff for food or I know we are very bad at being bored >> really >> very bad and so like the weekends it's like we can't just sit here we got to go take our daughter to Top Golf or something like we got to get out of the house >> that's quite interesting what else. We are both terrible cooks.
>> Be the first to say it.
>> So, what's the conclusion? You go out to eat.
>> Yep.
>> That's correct.
>> Okay.
>> We just love being with each other out and about. I >> It It gives us >> joy to go out. Drew, you mentioned that you grew up privileged. I'm curious if you can take me back in time. What do you remember your family saying about money back then? I don't recall my parents ever talking about money in front of my sister or myself.
I just remember asking for an item and that answer was usually yes. What'd you ask for?
>> A Jordans. Uh almost every month my parents were would always get me the the new Jordans. um snowboards, all that. And so it's like none of my hobbies were cheap. They were always expensive.
>> What else do you remember your family saying about money?
>> They just didn't talk about it. We just did stuff.
>> We just went on vacation. We just bought the items. My dad bought the new cars.
But no ramifications of me or my sister hearing it.
>> Are your parents both still alive?
They're both still alive and still together.
>> Okay. And how are they doing with money?
My dad is 69 and he does still work like a couple days a week. I don't feel like they're maybe as well off as peers around the same age. Um, >> how do you know?
>> Because my dad always tells me to save now cuz he doesn't want me to be in the same situation.
>> Your dad tells you to save, >> which he didn't. You tell your daughter to save which you don't.
>> Yeah, definitely a pattern I would love to break here and now.
>> I like that.
I think that one of the joys, >> one of the responsibilities that we get, especially if we grow up educated, we we grow up privileged, is that we can dispassionately look at our family upbringing and we can appreciate the things that our parents did that were awesome. And we can also say, hey, you know what? I didn't love that. Or there's a different way now that I think I would like to integrate better. Maybe it comes from my spouse. Maybe it comes from a different culture. Maybe it's from a religion. whatever. There's something I want to do differently and it's going to be hard.
>> Mhm.
>> Because it's easy to glide into doing exactly what your parents and their parents did, but we are going to make this change as a family.
>> Yeah.
>> To me, I think that's actually one of the most powerful philosophies and visions that you can have. We are doing this as a family.
>> Yeah.
>> Y Amanda, would you be on board with changing that pattern that has happened?
>> Absolutely. Okay, cool. Drew, anything else you want to highlight about how you were brought up here?
>> Yeah, I think the biggest thing that I've taken from them is the the yearly vacations, which um I I don't know how expensive they were back then. Um but I've been tending to do the same thing with, oh wow, we need a yearly vacation because what? you work all year round and you feel like you deserve an escape, but maybe it doesn't need to be an extravagant vacation. It could just be >> a weekend or camping or anything like that. It doesn't need to be a $10,000 Disneyland trip. This is why I really love having a diverse group of people to hang out with and actually talking about this stuff. So for example my my upbringing with my parents who immigrated from India you know we had we grew up with a lot of Indian friends and a lot of the parents had come at the same time and so they were like making their way in a new country but bringing a lot of their upbringing from India. It was really common that we all ate at home >> for months at a time like going out was a really big treat.
>> I think that is very different than how we are all now.
>> Yeah.
>> Yeah. I'm saying all this to say that in the if you only index on the upbringing you had which was fairly let's call it privileged.
>> Yeah.
>> Then it becomes totally normal. It's abnormal to not take an annual vacation.
But for millions of Americans that's totally normal.
>> Yeah.
>> Now let's go to your uh upbringing.
Amanda, take us back in time. What do you remember your family saying about money when you were a kid?
Money was always a stress.
Always talking about bills and how we're going to make it and refinancing the house several times. Um needing grandma and grandpa to bail out. Um so there was just a lot of unease. I I did get a lot of stuff and you know I didn't feel like I was going without. Um, I did hear a lot of like not today, maybe next time.
I heard that a lot >> and I say that now to my daughter a lot and I'm like, oh, I remember being like it's never next time. So, I don't want my daughter to feel that way either cuz it was just kind of like you're just lying to me. Um, my dad was a spender and like couldn't really be allowed to have like a debit card or my mom would give him like an allowance because he would just spend it if he had it. And so I think maybe my mom kind of got forced into the role of managing the money.
Mhm.
>> Um but my grandparents were like well off so it was kind of confusing cuz it was like oh when we're with grandparents things are great and then it'd be like at home struggle and then it would be like oh we refinanced and so they would get like a big chunk of money through the refinance and then that would like save us you know like oh we're going to pay off all our debts and we're going to start over and then So it kind of mirrors a little bit. Not we don't like do that, but like if we get a chunk of money, it's like, oh, okay, we're good now. We can do the right thing. But then you kind of fall back in the old patterns.
>> Yeah. When you took me on that journey, if you just notice how you're feeling right now, how do you feel describing your job?
>> Uncomfortable.
>> Mhm.
>> Um anxious.
>> Yeah.
>> Mhm. Mhm.
>> You feel that way today about money as well?
>> Yes.
>> Yeah. Are they still alive? Are they still together?
>> Yeah.
>> Okay. And what's their financial status now?
>> No. Great.
>> Not great.
>> Yeah. It was kind of like always a struggle and I think it's still a struggle and I it makes me sad.
>> Um and I don't want that for my family or for me. And it's not like I'm making these like big great decisions. I think it just kind of like snowballed for them and it's been hard to get out of.
>> Look, we can't control our parents. They are their own adult people.
>> Yep.
>> But how do you think that that affects you, Amanda, and the two of you in your relationship with money?
>> I'm scared and I approach it with that.
>> Mhm. Um, and then also I didn't get the luxuries like Drew did. And so when I had now I have an opportunity to go on vacation, I'm like I want to go on vacation cuz we didn't we did one vacation like my whole childhood. And so to me I'm like oh this is possible like I can do these things.
And so I think there's that novelty.
>> Do you ever say no?
>> I Yes. To myself.
>> Oh, okay. To your daughter?
>> Yes, I do. I'm I'm working on it.
Actively working on it. Yeah.
>> Do you ever just point blank say no to her? We are not going to get that or that's not something we choose to spend our money on. No.
>> I usually pro like have a It's like a sentence. It's not just no. Mhm.
>> Do you say no, we'll get it next time.
Or do you say no, that is not something that we spend our money on?
>> I'd probably say, "Oh, no, we're not buying that today."
>> Yeah.
>> So, there's maybe hope for >> There's hope.
>> Yeah. You ever had like a a creep hit on you and they're like trying to get you to go out on a date or whatever and then you know like some sometimes somebody will say like oh it's I'm not really looking for somebody right now and the only thing that that guy hears is like she said right now.
>> Yeah.
>> Are you talking about me again?
>> Are you talking about me?
>> Yeah.
>> But like sometimes it actually just pays to just be like definitive. No, I'm not interested. It is about both of you and your relationship with money and the ability to actually close certain doors.
>> Yeah.
>> No, we are not going to leave every door open. No, we are not going to take this vacation or no, we are not going to spend our bonus money. Just no. No.
Because right now at at the level you're at where you are spending more than you make every month and you are winnowing down your savings account >> to have a whole bunch of nuance. You are only tricking yourself into going right back to your old ways.
>> In your situation, the most helpful thing you can do is have extremely clear thick lines that say yes or no. Like there's no question, no equivocation, no negotiation whatsoever.
>> Yeah. And when you do that, which I'll help you do, >> okay, >> it flows to your conversations for something as simple as, uh, should we go out to eat, it's Friday, into larger things like, hey, you know, this vacation, we got these good deals on flights, and even down to when you talk about money with your daughter, it goes everywhere, >> but the only people who can decide that are the two of you. I love that. Yeah.
I think it's really easy to come on a podcast and get blasted for saying something dumb or having a inappropriate belief about money. But for me, the more I have done this and the more successful I have become with my own money, the more compassionate I am in terms of like if I were in their situation, might I be doing exactly the same thing? So, when I hear Drew saying, "I never said no. I never got told no." I'm like, well, if my parents never told me no, I'd probably be doing exactly the same thing you are right now. Doesn't excuse it.
Helps me understand a little bit more.
Drew's parents did not do him any favors by not talking about money. They definitely did not do him any favors by giving him everything he asked for. What happens when you go 10 years, 20 years, 30 years, never being taught about money, never being told no, is that you simply do not develop the capacity to make carefully nuanced decisions about money. You see it, you want it, you get it. That might work if you make a ton of money, but it stops working when you have a family. It certainly stops working when you have kids. For Amanda, money is anxiety. It is a source of tension. It is chaotic. It's also a source of control that came from her grandmother to her mom. If you have the choice of being around something that causes you anxiety and stress, makes you feel incompetent. What would you do?
Most people go, "Oh, I'd read a book and I'd learn about it." No, you wouldn't.
You would just avoid it. And that's exactly what Amanda is doing. That might work if you're 12 years old. It does not work when you are a mother and a wife.
You have to engage with money. You have to turn and walk straight into the fire and learn how money works. It can cause anxiety right now. That's okay. But it also is a source of your rich life. That is why I'm pushing her to stand up, to take up space, to acknowledge. She actually knows some of this stuff. is pretty impressive what she's doing, but she needs to go into it full force, not depend on her husband. What money messages do each of you bring from your upbringing to this relationship? I think the money message that I've brought to this relationship is you only live once, just do it. Wow.
>> And I mean, I've heard like my my grandfather would say, it's only money.
I guess that is easy to say when you are a grandpa and you're retired and you have money to to spend. Um, you can't take that when you're you're 35. It's it's only money. Really good insight.
>> Amanda, >> uh, that money is scary.
>> What money messages are you passing along to your daughter?
>> That you only live once and spend it.
But overall, we do only live once and I want my retirement to reflect that. So I need to save so we are happy and in a great place >> for me and Amanda as we move forward into that chapter.
>> Okay. Amanda, what money messages are you passing your daughter?
>> That you have to be buying stuff or doing stuff to enjoy life.
>> Nice.
>> That you get everything you want. Mhm.
And that's not life.
>> No.
>> I think you actually get whatever you want and you don't look at the numbers at all.
>> Yeah.
>> You also don't have a vision.
>> Yeah.
>> Do not have a vision of your money.
>> If you want to change the money messages that are passed on, you could blah blah blah talk all you want, but the only thing that matters, as you know, as parents, is >> action, >> showing action. Action. She's got to see it. And she's even got to see mom and dad not getting everything they want, but more importantly having a powerful vision that they are getting.
>> Yeah.
>> Okay.
>> Mhm.
>> I'm actually curious what that rich life vision is for both of you. Have you ever talked about what your rich life is?
We've had conversations of what we'd like to do when we're older, but I don't think we've looked at each other in the eyes and said, >> "Here is my rich life."
>> Should we do it right now? Let's go for it. Okay. Who wants to go first? The question is, what is your rich life?
Amanda, my rich life is one uh being with you uh no matter what. Even though I know we just talked about vacations, but if we could limit those and me and you are together on vacation, providing our our daughter uh the life that I know that we would love for her, which is to grow up as a a confident woman um but doesn't necessarily depend uh on money would be amazing. My rich life also includes being able to do the the hobbies that I like without having to think about money and then limiting going out to eat but still still being able to go out uh out to eat with you.
>> Okay. Thank you very much. Amanda, what's your rich life? For me, it's definitely doing this together and I think creating that philosophy where it becomes like second nature to us of making those easy decisions to take out that decision aspect of like oh maybe maybe not. It's more of that confidence I think without fear and knowing that we can handle the life experiences that are bound to come um without it wrecking us. How do you both feel expressing what your rich life is for the first time? It does feel a little weird. Like, >> yeah, >> expressing what you want in life. It It's not usually a dinner conversation, but it's a great one.
>> Yeah.
>> And it's one that we should >> continuously have to be honest as as life continues. Amanda, >> it felt really good because I could see how well they intertwine >> and that they align really well and that we're wanting to do it together to create that different outlook, I guess, change a cycle.
>> I like that. What what I noticed is without this type of discussion, >> what is our rich life? What's our philosophy on kids activities or eating out etc. Without any of that, you simply look down at the dayto-day. And the dayto-day is stressful and busy and often filled with materialistic escapes that are not even part of your rich life. Like somebody sitting here buying $500 worth of freaking crackers. I go, "Are part of your rich life? If so, I don't mind. If you can afford it and you love it, God bless." They go, "I hate crackers. I don't even I just eat them cuz they're buttery and they're in front of me."
>> Then why are you buying it? because you have no philosophy. Drew, you made a really good point. We don't really talk about this stuff. We probably should.
Yeah, it's actually probably the first thing you should talk about and you should talk about it regularly because it elevates your purchase decisions and your relationship to a much higher level than where should we eat out this Saturday?
>> Yeah.
>> Okay. Now, now I want to point something out. Knowing what you both said, do you know specifically what you would not spend money on? Now, >> I would probably need to limit the amount I go to nicer golf courses and limit our eating out.
>> Okay.
>> Dining out.
>> Amanda, >> a lot of it is the eating out and just like kind random like more expensive things like maybe tickets to a show or like those random like >> How come none of these things showed up on the CSP? By the way, I haven't heard the word golf before. Haven't heard the word concerts. I haven't heard any of these words. What What is this? 89% fixed cost. You cannot afford to golf.
Simple as that. End of story. There is no discussion.
>> I don't know what to tell you. It's it.
It's over. What I really want to get to is I like your rich life vision. I think it's a good first step.
>> But when I am hearing somebody describe a an effective personal rich life vision, it cuts like a knife. It is sharp.
>> Sometimes it's a little abrasive.
Sometimes it is bewildering. That's what I want to hear from you on your rich life. I want you to be so tuned in to what your rich life is. So specific that it could only be yours. So if you were to say, I am going to play golf once a month.
>> Okay, we I can work with that. But I didn't even hear golf until just now. If you want to say we are going to take our daughter to art classes three times a month.
>> Mhm.
>> Great.
But right now what I'm hearing really general.
>> Yeah.
>> I actually don't know how to take what you told me and change the CSP.
>> So can you try it again and tell me what your rich life is? What is important to you and what is not?
>> Definitely activities for our daughter. That's definitely on there. I like to get my nails done.
>> He's absolutely correct that I do do not need to to golf that much. It is a very expensive hobby. Um but for my rich life is um with working from home 5 days a week. I would like to at least go out once a week with you and our daughter is as a family.
>> I like that. I want to go out once a week with the two of you.
>> Mhm. to do some sort of activity. Yeah.
>> Yeah.
>> We can make that work. So then can I extrapolate that vacations are not part of your rich life?
>> I feel like I feel like they are because the experience with our daughter.
>> Oh wow. Okay. Then if that's the case, um what if I were to say I feel like you have to double your income.
>> That's the goal. Could you put a hold on vacations until you do that?
>> Yes.
>> I think that it makes complete sense.
Yes.
>> Now we're talking. Now we're talking.
See, part of your rich life, there can be many things in your rich life. You can't afford all of them today, but they should still be listed. I want to stay at this hotel. I want to go to this whatever. Put them there. But you also have to know >> what is the moment where we can afford to do that.
>> And this is where you start to get honest. And this is where you start to say, "Okay, we can't do this until that." That that actually I find for high achievers is very, very motivational. And I actually think that the two of you can can do that. I could tell the way that you talk, you can achieve. So if you were to be like, "All right, we're not taking a vacation until X, Y, and Z are reached." Then I bet you you would reach X, Y, and Z pretty fast.
>> Yeah.
>> Which is incredible. I still set financial milestones for myself.
>> Yeah. It motivates me and then when it happens, >> it feels like incredible because I know how many years of work I had to put to get that.
>> Yeah.
>> All right. So, we have a rich life vision. And then the last question before we go back to your CSP and change the numbers is how are you going to make sure that you do this together?
>> Absolutely. Uh communication. Uh I think me and Amanda will set a schedule to talk at least twice a month. um Sunday evening we will have that conversation.
I love where you said having our daughter not be present in the conversation but seeing that conversation happen. So we will we will set up two days a month >> where we go through our finances and >> I also love the setting those future goals. So, we will write down our future goals, talk about our finances, finances and our goals, um, and show that that affection in front of our our our daughter. Drew, what do you think is going to be the biggest challenge in these conversations?
>> I need to do a better job at listening.
>> Yeah.
>> Where no means no. Who's going to say no? I need to come to the realization that we can't afford it either. How are you going to do that? You never done it in your entire life.
I I don't know how people just turn around like turn that switch.
I I need to do a better job in investigating tools to turn off that switch. I don't like the word tools.
When people use the word tools, >> they especially guys, we're looking for some magical AI solution. Those tools don't exist. I'm talking about you, Drew. You are the big bad wolf as you yourself described it. Which if we can bring it back down to earth, what that means is you don't know how to say no.
You've never had to say no. You hate saying no. You actually hate it. You know exactly what to say to convince Amanda to agree with you. She is not knowledgeable about money in the in the way that you are. Although Drew, candidly, I don't think you're that knowledgeable about money either.
>> Yeah. 89% fixed costs. You're not doing a great job. But in your relationship, you are quote the knowledgeable person in charge of money. And you basically, as you put it, can maneuver to get Amanda to agree with whatever you want.
How are you going to change that? Have a collaborative conversation with your your spouse um and come to an agreement.
Uh I need to learn to hear the word no.
Um, and let that sink in. I I need to say no to myself and I overall I just needed to do a better job and this self-reflection has really helped. That's good. I the the most important thing you just said right now was >> you need to say no to yourself.
>> Yeah.
>> Best way to to change the dynamic of your relationship is for you to take the first step and change it for yourself.
So tell me, what could you say no to today?
>> I was asked to go to a basketball game that would cost a couple hundred for tickets and I will say no to that. I will not be going.
>> How are you going to say that?
>> Should we practice?
>> Sure. Yeah, more than happy to.
>> Am I your friend? Okay, let's go to a Pacific Northwest basketball game.
Please don't ask me to name any teams because I don't know any of them. some Pacific Northwest team. Would you like to go? These t these tickets are great and they're pretty cheap. Uh, how cheap are they?
>> Uh, they're 200 bucks.
>> Where are the seats? 5B. Oh, those are really good seats. I I'll have to I'll have to take a look. But, uh, so that's how it would usually go. I would usually say, "Okay, sounds good." Um, but for this conversation, uh, sorry, Reie, uh, I don't have the the funds to do that at the moment. Um, if you would like to come over and watch the game, I'd be more than happy to have you here.
>> Whoa. Okay, first of all, round of applause. That was really good.
>> Is I I love that was great. And I love the the offer. Hey, come on over anyway.
Like, we can do it here. I thought that was really good.
>> Would you actually say that?
>> I can text him right now and say no.
>> Really? Okay, do it. Text him. Let's take a second. I don't mind. Take a second.
>> That's fine. Mhm.
>> I like this.
>> I can show you. Take your time.
>> Proud. I'm very proud.
>> What are you seeing, Amanda? As Drew is typing this, tell us what you're seeing.
What are you noticing?
>> He said no to himself. And cuz I know he we talked about it earlier and I was like, "Oh boy."
>> Hold on. Was that what you said? Oh boy.
>> Mhm.
>> Okay. We're going to get to you in a minute. Okay.
>> Hang tight on that.
>> Yeah. I have fun.
>> Oh boy. Did you say >> I have >> I did. Okay, read. Okay, hold it up tight to the camera. Wait, what? What are we looking at? Uh, can you read it out loud?
>> Uh, I can't make it to the playoff game.
Sorry, Holmes. We should still try and watch it together.
>> Nice. Round of applause.
>> Really good. Okay, great. Great. Great.
>> How did that feel? Honestly, it feels this is what I would feel like if I had said no to myself more often instead of going to bed like, "Oh, shoot. I spent another $200."
>> That guilt that sticks with you after you make a purchase.
>> Nice. That's the first time I've heard you mention that guilt.
>> Yeah. I don't like guilt with money. I don't like men to feel it. I don't like women to feel I don't like anybody to feel it. When I spend money, I feel great.
>> I feel awesome.
>> Yeah.
>> I want you to feel like that.
>> The only way your daughter can learn healthy relationships with money is if her parents feel good about money.
>> Yeah.
>> How many people do we know, including the two of you, who grew up with parents not feeling great about money or confused about money, and then you internalize it and you got to make your own way in this world. No, we have to feel good, which means we need to develop a philosophy and then live it.
And sometimes that philosophy means we're not doing that.
>> Yeah.
>> And then we start to be congruent. We start to be living our values. And it feels awesome. You know, people like this who are living their values and you're just like Jesus. Like >> you can just see it in their alignment.
Some people would describe it with their energy. They are living their values.
That is how you transmit money.
>> Yeah.
>> In a healthy way. And your kids, your loved ones, they pick up on that.
>> Okay.
>> Thank you, Drew. That was awesome.
Amanda.
>> Mhm.
>> Now to you.
>> Yeah.
>> Same question.
>> How I'm going to change?
>> Yep.
>> Yeah. saying no and being confident in like no that's not part of our plan or that doesn't align with our philosophy.
>> Um >> being able to I guess say why I'm saying no.
>> Um without like getting in the nitty-gritty but more of like hey we're getting off course.
>> Ah >> the way you build confidence is deep competence.
>> That's why I'm confident about money.
I'm very because I know my numbers. I know how compounding works. And you can do exactly the same thing. Okay. Start with my book.
>> Then I what I heard you say was you said I got to say no. But what I think I really loved you say is we've got to stay on a plan.
>> So you're not you're not Mrs. No. That's not your role. That's actually not fair to you.
>> Okay. Neither of you are the no person because if you are the no person, then the other person is the yes person and you're right back to the way you were.
>> Instead, you need to radically reconceptualize the dynamic here, which is what is our plan? We're going to come up with it together. Do we both agree >> and now we're going to stick to it. We can always re-evaluate every 6 months, 6 to 12, but >> yeah, >> we are sticking with our plan and we're going to gently remind one another if one of us goes off plan.
>> Yeah.
>> Not about saying no, you're a bad person. It's about, hey, we have this plan that's actually more important than any individual desire that we want.
>> Got it?
>> We are living our rich life plan. Okay.
Now, with that all laid out, we're going to go back to the CSP and you are going to tell me what changes you want to make. Are you ready?
>> Great. Let's do it. Are you surprised that they have never talked about what their rich life is? I'm not. Most couples do not talk about philosophy, about the big picture. If anything, they'll say, "One day I would like to go to space. One day I'd like to go to Bali." But it is so much easier to live in the day-to-day. An endless series of one to-do after another. And hey, that's life. We do have to manage the household fine. But what's it all for? This is why I want every single person to put out your hand. Just go ahead and put out your hand right now and go, "What do I get? All this work, all this automation, all this stuff we're doing with our time and our effort, what do we get? Do we get to go on vacation for 3 weeks a year to this very specific place? Do we get to buy a beautiful car or beautiful clothes? Do we get to put our kids in activities? What tangible specific things do we get?
If you don't have a list of the things you want now and at your next milestone and when you turn 45 or 60, what are you doing? What I'm trying to get across is that you could spend the rest of your life going through your email to-dos and you're just going to end up with an inbox full of emails. Or you could zoom up. Use the questions in my journal. Ask yourself, what is our rich life? What do we want? That would be a 10 out of 10 magical life. And now can we start adapting our money to be able to get there? It is an incredibly powerful counterintuitive way to live. It also gets you a rich life like nobody else.
Looking now at the CSP, your fixed costs are 89 almost 90%. Your job is to get this number down to 60%. Your job is to also change the investment savings and guilt-free numbers to reflect your rich life values. So, we're going to start and the pattern I would like to take is each of you are going to suggest one thing back and forth like a ball you each have tossing back and forth. Who wants to go first?
>> I can go first.
>> No, we're not going to do that. Drew, you know why we're not going to do that?
Not only do you need to chill as that former big bad wolf, but you actually need to give Amanda the space to rise up and take some space. Amanda, go ahead.
>> Uh, subscriptions.
>> Great. What's the current number here?
>> 312.
>> What do you want to take it to?
>> Definitely can cancel Netflix. That one's >> okay. 15 bucks a month.
>> I know.
>> Can I Can I point something out? So, you're doing what everybody does the first time they do this. They jump right into the weeds and they try to fiddle and and it's rational. That's what I would do myself. But I'm going to ask you to think about your vision first.
>> What is our vision? If we had a blank page, what is important to our family?
>> That we're not spending more than we make a month.
>> Yes, we are building savings. That's good. That's a great philosophy every month. And what else?
>> Yeah. What would you say is important to you for spending?
>> That it aligns with that plan.
>> Yeah. What what specific things do you want to spend money on?
>> Our daughter's um activities.
>> Yeah, her activities. And what else?
>> Healthy meals that we can have at home.
>> Really? Sounds very aspirational. Didn't the two of you say you hate cooking, you're not good at cooking, etc. You want to learn how?
>> Yes.
>> What the What was that? The way you said it just tells me everything I need to know. Yes, I want to learn how to cook.
Look at my head. Yes, I want to. That's a no.
>> If we're not eating out, that's something that's not going to be part of that.
>> Oo.
>> How then? What are we going to have to do?
>> Good. That is good. Now you're I like that. I didn't believe you before.
>> Now the way you said it, you're like, well, look.
>> Yep.
>> You got to do this. What's our other choice? Yes. Decisive. Okay, now you've told me what's important to spend and what's not.
>> Yeah.
>> Can I suggest that when I pop this back up on screen, I want you to become >> a little bit more ruthless, a little bit more like a mercenary. Okay, we're doing that with your expenses. All right, here we go. Fixed cost. What do you want to do?
>> Cut subscriptions.
>> What do you want to take it to?
>> Uh half.
>> Half of that. So from 312 to let's just say 160. Okay, look at the number. What changed here on the fixed cost? It went down once.
>> It went down from 89 to 88%. Okay, it's a start, but what does that tell you?
>> I'm not doing big enough.
>> Yes, we need bigger changes. Go ahead.
>> I know the phone and miscellaneous section is a problem.
>> Yeah.
>> Um, and I think this is probably points to the issue is I don't know what falls in there.
>> Okay. Actually, it's Drew's turn anyway, so why don't we kick it over to Drew?
>> Perfect.
I know Amanda had talked about uh healthier meals uh with groceries. I do feel like ChatGP uh has the ability to make us 6 days a week meal plan. Um, so I think that we would have the ability to cut groceries from 800 to 500 to 600 if we are able to find a meal plan and kind of shop for what we need instead of going into the store with no plan. Okay, I like I like your energy. I like it. And I I am going to cut the groceries. Can I just point out you all are starting from a place where you don't really cook at all. And I need you to create a plan where you don't have to be perfect to win. You are not going to be perfect at cooking.
>> Yeah.
>> 25% of your vegetables are going to go rotten for the first month. It's just going to happen. You're going to hate the dish and you're going to slip up and go eat out. It's going to happen. We still need you to win even though you are human. So, I'm never going to set you up with a plan where I expect you to be perfect, especially the first time you're doing this. All right. So, let me suggest I'm going to take the groceries down like really really a little bit.
Okay? But what I'm going to suggest to you is that instead you focus on creating a rule of how often you are eating out. I'm going to take your groceries from 800 to 750. That's it.
Okay?
>> Mhm.
>> How often you're eating out like let's just say nine times a week. Okay? 7 to 9 whatever. How often you going to eat out now? We are going to create a philosophy and a goal and follow it of eating out once a week. Does that work for you, Amanda?
>> Yes.
>> Okay.
>> Oh, I like that last line, Drew. Good job.
>> Yeah.
>> Okay. So, what what's the number we're putting down for eating out? How much per week?
>> Uh, if we're only going once a week, for 40 $45 per going out.
>> Amanda, where are you on this? Speak up.
I think we would enjoy it and it's a break too from having to make stuff at home. Um, so I think once a week at the 50 >> 50 Yeah.
>> So 50 bucks a week on eating out. That's two $25 meals. I wish I could see the face of all the immigrants listening to this and they're like people who are especially the people in other countries >> and they're just like what the is this couple talking about right now at $50.
Meanwhile, I'm remembering like when we ate out.
>> Mhm.
>> I can't believe this. Six of us in my family, right? We go out, we get two Cokes. Two.
>> Okay.
>> And then we like share them. That I know. I'm sorry to all the pizza places that we defrauded. That was not That's what we did. We only ate out with a coupon and we would under orderer and like we're not getting full. Like that's just life. That's what we did.
>> So I guess what I'm trying to show you is other examples of what's possible.
Like you ever see families it's striking with their kids, right? kids get their own freaking adult-siz meal. And I I'm looking at them like, "What the >> that could feed four kids?"
>> Yeah.
>> Mhm.
>> Yeah.
>> I'm trying to stretch the possibility, the imagination of what is possible for you.
>> Yeah.
>> Yeah.
>> So, if you want to start at 50 bucks, fine.
>> I don't mind.
>> But I want you to start thinking there are other ways. Let's like look at other people's dishes. What are they eating?
Let's talk to our friends. Where do they go? Do they not go? How do they save money? Okay, >> great.
>> All right, 200 bucks. Now, I'm gonna put that up on screen and show you because guess what? That needs to go down here.
>> Guilt-free spending. That's where it goes.
>> So, that's included right there. We're not going to change anything on your fixed costs. Okay.
>> Mhm.
>> All right. So, we're going back up here.
Can somebody just tackle the big expense here, please?
>> Yeah. $1,120 for kids birthday parties, Amazon purchases, and random items. No. fix this.
>> All right. Uh, I would say 650.
>> No way. I'll show you why. Cuz watch.
I'm dropping it from $1,120 to $650.
Look at this number up here. Your fixed cost number. Ready?
>> What' the number drop to?
>> 82%. Okay.
>> Not enough at all.
>> How are you going to spend $650 a month on random kids and Amazon purchases? No, we're not doing that.
>> You all can't afford it. You realize you're going broke every month, right? Y >> what's happening here and what I want you to pay attention to is you are what you're trying to do is you're still trying to live in the past and just like squeeze out a little bit here and a little bit there. No, you actually need to start completely fresh in your rich life. Did you tell me Amazon purchases were part of your rich life? No, you didn't. Did you say kids birthday parties and getting them all these big ass gifts were part of it? No, you did not. You said activities with your daughter. I haven't seen that anywhere.
Okay, >> but you're living in the past and trying to tinker around the edges. That is a recipe for failure. You will always hate it. You will resent it and you will go right back to spending the way you were.
My job is to help get you where you want to go, even though you may not want to get there yourself.
>> Okay? So, fix this. Let's put it at 100.
Honestly, it's going to require the two of you talking about money every single week. There cannot be mistakes. There cannot be like, "Oh, we should get this thing because it's on sale." Nope. It's not happening, guys. I'm going to put this, but I have to give you like this is a red alert.
>> This is asking a lot from a couple that has not really paid close attention to spending for a long time. Okay.
>> Yeah. Mhm.
>> All right. I'm taking this down to 100.
Look at the fixed cost number. Whoa.
>> Nice.
>> That dropped to 76%. We're going in the right direction. I really like this.
Okay.
>> Okay.
>> What else we got? Clothes and kids activities, 400 bucks a month. Yeah, that needs to be cut in half.
>> Her art class that she does it with after school is I would say it was like 220.
>> That's her activity. Cuz if so, great.
220 a month. Yeah.
>> I'm like, do we pay for anything else?
>> Oh, >> like she's in soccer, but we already it was like 60 bucks, but it's like a one time, but it's like she keeps doing stuff. So, um, cheer is coming up. Let's call it 250.
>> Yeah, I think that cuz things will fall off and things get Yeah, >> let's call it 250. Watch the number.
We're down to 75%. Subscriptions that I'm just going to start making changes cuz you guys are not 160 for a couple that's losing money every month. Not in my world.
>> Pick one. What do you want to have?
>> We will keep the the Apple subscription at $45.
>> All right, watch the number. I'm changing it from 160 to 50. Fixed cost down to 73%. Not bad.
>> We're chugging along now.
>> Do you have investments uh at $200 a month in addition to your 401k and then you have a 529 at 150 a month?
>> Mhm.
>> Yeah, >> maybe we need to hold off a little bit on the 529 because this is our future currently. Um I know we want the best for our daughter, but we need to kind of take care of our ourselves at the moment. And I think if we are able to kind of cut that for the time being, uh, that would would help out. Agreed.
>> So, let's take a look. We're going to drop the 529. I totally agree. Your daughter needs you to be financially stable more than she needs money 20 years from now. Also, want to go back up here to the kids activities because we did drop it. Um, but what about clothes?
She's growing. Yes, she needs clothes all she's getting. Yeah.
>> Where do you buy those clothes?
>> We did get blessed with a lot of handme-downs.
>> Can you keep getting handme-downs?
>> We keep get We keep getting them.
>> All right. So, we don't need a lot more, but maybe once in a while we do need something. Would that be fair? I don't want to I don't want an unrealistic plan. Okay, >> that's fair.
>> What do you want to do for this number?
It's 250 right now.
>> Probably bump it to 300.
>> Okay. 300. Mhm. Yeah, we I think we're pretty mindful with our spending for her because we know how fast she grows.
>> I like that you're you're both so mindful about her spending uh spending on her but not for yourselves.
>> You're like, "Yeah, she's fine. She's sick." She >> can wear those.
>> But we need to go golf.
>> We need it.
>> All right. Speaking of that, where is the golf expense in here?
>> It was in the the miscellaneous.
>> It got wiped out. It's really quite peculiar that there is no word saying golf in here. Anybody notice that? It was I took what was there? Yeah, sure.
All right. Bye.
>> Oh, and then I think that's a good question. Is are my nails in miscellaneous?
>> They they were How often you get your nails done, Amanda?
>> Once a month, but I can switch to the like press on ones. That's >> It might be the case that that's what you do. That's really up to the two of you to decide as you get more into the nitty-gritty. But what I want is actually for you two to have a discussion about it.
>> And I want you to do it not based on feelings.
>> Yeah.
>> You all should not be talking about your feelings that much right now. You should be talking about math. Here's what we have. We have a finite amount of money.
How are we going to distribute it? What I notice is that there's been an overfocus on feelings. And your feelings have actually led you astray. Your feelings are why that that you don't have enough in savings and why each of you has adopted this role. And we need to make feelings secondary right now and make the math primary.
>> Yeah.
>> Okay. Let's keep moving.
>> $100 a month for vacations.
>> Mhm.
>> Those need to be wiped out. Amanda, if you feel the same way and transferred to emergency or long-term savings, you good? Mhm.
>> Yeah.
>> Amanda, are you sure?
>> Yes, cuz we agreed that the vacation should wait.
>> Good. Yeah.
>> Mhm.
>> Agreed. So, we're at 200 a month, which is 2%, which is low. Oh, well, guess what? We have margin to play with because look at your guilt-free spending. See all those cuts you made at the bot at the top? It they flow to the bottom automatically. So, you have 22% >> Mhm.
>> to play with. That's $2,52 a month. Why don't you say we put that money to work?
>> Mhm.
>> Where do you want to put that money?
>> Definitely the emergency fund.
>> How much?
>> Make that $400.
>> Okay. If we put 400 more here. Okay.
Watch what happens to the numbers. So 600 bucks. This turns into 6%. This number I typically like to see it at 5 to 10%. But in your case, do you think that number should be higher or lower?
>> I think it should be higher as I do have a solid contribution to my 401k, but not in our savings.
>> So, it should be higher in our savings to kind of bump those up. Okay. And Amanda, why do you think it should be higher?
>> Because we're kind of behind.
>> Good.
>> Um, yeah.
>> You have a high income and you've had it for a while and you don't have great savings and you have very high fixed cost. So if something goes wrong for one of you, you're in trouble. So that is why I'm like, guess higher, right? So at 6%, you're kind of like near the bottom.
I'd like to see that number at like 14 15%. So let me let me actually try to like pump that number up a bit. Watch this. I'm going to go to 800.
>> We're now at 9%. And look how much you still have down here. 15% guilt-free spending. What What does your immediate intuition tell you? What should you do?
>> Add more to that. Yeah, I agree.
>> Your guilt-free spending should actually come down. You've been guilt-free spending a long time. It's actually causing you guilt at how much you've been spending. So, we need to take that down and we need to redirect it into savings. So, let's pump this number up a more. I'm just going to go a little faster. 1,200.
>> Yeah.
>> Oh, 13% savings. That's $1,200 a month.
Guilt-free spending is at 152, which is good. Good. I think we could cut that down even a bit more. It's starting to feel a little bit more rational, a little bit more aligned with the goal of a couple that told me they want to spend less every month and build up savings.
One last thing I want to talk about, which is investments. Um, >> have you run a compound interest calculation?
>> Yes, we have. What do you find at the end?
>> How much are you going to have?
>> I think mine was like 1.25 >> Mhm.
>> million. And for you, Drew?
>> Uh, 1.4.
>> 1.4. Okay.
>> Well, we calculated that if you continue on the current path you're on, no raises, which I suspect you will both get, >> that when Andrew is 65 years old, that's 29 years from now, you will have not 3 million like the two of you said combined. No.
>> Mhm.
>> 5.58 million.
>> Oh, >> okay. That's a safe withdrawal at 4% of $223,000 per year.
>> That's a lot of money.
>> Yeah.
>> Does that surprise you?
>> Yes, >> it does surprise us. Yeah. Why is our calculation different than yours? I think I might have put in only half of my paycheck investments in there um instead of a full month's investment.
>> Why?
>> Yeah. I think I looked at one paycheck and I grabbed since I paid bi-weekly, I think I accidentally grabbed only one paycheck.
>> You know, I'd rather make a mistake in the good direction, not the bad direction. But >> yeah, >> that's kind of a big mistake. That's like $2 million $2.5 million wrong.
>> Yeah.
>> Yeah. Well, like I'm looking at my Charles Schwab with what what's in there cuz nothing's getting added to that for because I'm not at that job anymore. Um, it says by the age of So, by the year 2060, it'll be 1.9 >> 1.9 almost $2 million.
>> Mhm.
>> That's pretty impressive.
>> That's good.
>> And And remember, that's if you don't add anything else.
>> Yeah.
>> You're going to add more. Of course, you're going to add more.
>> Yeah.
>> So, can I in light of all this, what does this suggest to you for your CSP?
There was this big pressure on me mainly because I've been contributing to a 401k this whole time and company was matching it and so I was worried that like oh my gosh I don't have that anymore. But when we look at the like projection it's like do I need to be adding as much or worrying about it as much right now?
>> These are the questions you should be asking.
>> These are valuable questions. So, let me share what's going on here. First, your fixed costs were way too high. So, we went through the fixed costs and we tackled them and we brought them down to a level I think is reasonable. I actually think these numbers are pretty aggressive. Okay. Like, you need to really be dialed in every week. Okay.
>> Mhm.
>> With that said, we're still at 74%.
>> Yeah.
>> It's high. It's really high. And so what we did was we went down to guilt-free spending and we took that to about 11%.
That number needs to go down a little bit more, okay? Because the money has to come from somewhere and you simply cannot be spending as much as another couple on guilt-free spending because you have locked yourself into high fixed costs.
>> That's it. So, we have to accept that your guilt-free spending number will probably have to be something in the zone of like 8%.
>> And what that really means is there are no more ad hoc last minute decisions about spending an eon. It just doesn't exist anymore. That is not the type of couple you are.
>> Instead, it is planned ahead of time.
Each of you will decide how you're going to take responsibility. What is the number allowed? And you're gonna leave buffer in case something goes wrong or you know there's a breakdown or something you need to spend a little bit of money. But the automatic days for now are over.
>> Cool.
>> Yeah.
>> Yeah.
>> Savings, you have put more towards it.
1,200 bucks a month, which I think is a good start. Investments, you're at your Roth IRA for 200. Personally, that's $2,400 a year. I might just redirect that to savings. Boost that savings up.
And then finally, if we look at your 401k, I just want to point this out.
Another option you should calculate is, do you need to be putting $1,400 a month into a 401k? I'm not so sure.
>> That's a lot. Yeah, >> that's a lot. Especially if there's, you know, an additional match and blah blah blah. Of course, that's the best place to make a lot of money 20, 30 years from now. But you have a crisis right now.
And so if it's me and I am truly dialed in with my partner and I'm confident that I can follow a system >> I probably take some of that money and I would redirect it to savings and quickly as aggressively as possible build up that savings account to at least 6 months of fixed costs. Okay.
>> Okay.
>> Do you know how much that is?
>> $42,000.
So you're partially there. But you can see that even an extra $100 a month >> Yeah.
>> is $1,200 a year.
>> So like when you put it in that perspective, like finding 300 bucks a month actually really adds up.
>> Yeah, it does.
>> Where do you think that the biggest opportunity that this plan falls apart might be?
>> The biggest opportunity would be having a rough day at work and you're like, we're going out. We We deserve this.
>> I was going to say stress.
>> Stress. Yeah. Good. I agree. What's the antidote to that? I think it's me and you sitting in the backyard with uh with a drink and watching our daughter play and um >> you know instead of an $8 $12 drink at a place it's you know one that we got at the grocery store that's $2, you know.
And I think I mean we go out to talk to each other in a different environment.
We can >> we can still have that same vibe and conversation together at at home.
>> Mhm.
>> It's really good. I love the way you two are >> almost coming up with this new way of relating to each other.
>> It reminds me of when my wife and I changed our diet and we didn't eat out as much. We're like, "What are you supposed to do?
>> What do we do with our friends?" And we had to invent a whole new way of being with our friends. And it's like, let's go for a walk. Let's go check out this new park in the city we haven't been to.
That kind of stuff. Different.
>> Yeah.
>> But like, >> cool. Cool. For the phase of life that we're in. Same for you.
>> Um, >> yeah.
>> What can each of you commit to >> in terms of your rich life vision to make sure that your plan stays on track?
Amanda >> writing down or like putting it somewhere like this is our plan and this is why like this is why we're making these tough decisions.
>> Nice.
>> And so yeah, I think like we're saying no because this other Yeah.
>> Love it. Beautiful. Get your daughter involved too.
>> Yeah.
>> Tell her tell her, "Hey, this is what we're doing. We want to build up our We need your help. Get her involved in the way that is appropriate for her."
>> Drew, what about for you? Yeah, I think making that commitment to talk as a family, listen, uh write out those goals, stick to it, be each other's partners throughout this whole process, um lean on one one another, >> um I I think as long as I'm with Amanda and my daughter, uh >> knowing what we talked about today, um I think our our our rich life will will grow and we'll we'll have that opportunity uh in the future. Really good. I want to remind you that the changes you're making, especially the aggressive changes.
>> First, I don't expect you to be perfect. You shouldn't expect each other to be perfect either. I do expect Alevel results.
A+ it's going to take a while. It's going to take some mistakes and that's okay. You will get there. But if and when a mistake happens, give each other a little grace and get right back on the plan. Okay? That's just normal. The other thing I want to point out is that as you develop this plan more, which I want to see, by the way, I want to see a full plan with numbers, >> you should remember that a lot of this is temporary until Amanda's income goes up.
>> So, you should make a plan for what do you get once that income goes up. And that is a really fun exercise. For example, we get to accelerate our savings account by double.
>> So that's going to shorten the time from 6 years to fill it up to two years. If the salary increases by this much, we're going to increase our guilt-free spending by an extra $150 a month.
>> That's gonna allow us to go out to a nice meal with drinks. and we are going to start putting aside, you know, 100 bucks a month for a vacation. Like these are the kind of things where you plan it ahead of time. You plan for the worst like term life insurance, savings account, but you also plan for the best >> of the next extra money we get. 50% is going to go to savings, 20% here, etc., etc. And that's how you always have a plan.
>> Yeah.
>> Yeah.
>> Yeah.
>> Okay.
What surprised you in today's conversation? I think what surprised me the most was how dire our situation was.
Um, >> I didn't know that we were out on the Titanic with like without a floaty or a door. And secondary was that retirement number that you had thrown out.
>> Nice. Amanda, >> I definitely agree with like the crisis.
Um cuz I think we've always just kind of told ourselves that we're doing pretty good, you know, and um I think too how we were bringing each other into the pattern and using each other. Um I think that was a big piece for me. And I like the new like take on this is what we really want to do. So this other stuff it what are we really getting out of it?
>> Yes. Yes. A rich life is unique and personal and it fits you like a glove.
The two of you and your daughter. That's what it is. And often when we look at where we are spending our money, >> it's not reflective of our vision at all. And that's okay. That's just an opportunity to clean things up and get back on our vision. And how are you both feeling now as opposed to when we started talking? Amanda, >> I feel hopeful and actually excited to act to take action and be like actually this isn't part of our plan.
And I think having those guardrails are so helpful and take away a lot of anxiety for me. I am so excited and appreciate your time and the hard truths that we were told today. Um because I kind of have to agree that we thought, oh, we make X amount of money, we're doing just fine like with our total amount. But really, when you get into the nitty-gritty, um it's just not not that way. So, I'm super hopeful and excited to take what we learned today, set those goals, and talk to each other, um, >> and continue to strive for our rich life. Love that.
>> Yeah. And to have our daughter actually see us safe, not just say we're saving.
>> Yes. Yeah. That is going to change everything.
>> I think that Amanda and Drew are really smart. I think that they're going to make some changes. I think the biggest challenge for them will be their mental vision of what money is. For Drew, this idea that I want what I want and I don't want to say no. I think it's going to be really challenging for him to see money in a different way. In other words, money is not just about whatever I see around me that I want right now. Money can be put aside to get something even bigger and more meaningful.
And I think for Amanda, her biggest challenge will be becoming a true partner, stepping up into her own knowledge and power, becoming competent to build that confidence and actually saying, you know what, that might not be part of the plan or this is what I want for our rich life. Those are the challenges, but I do feel confident that they can get there. This is why creating a rich life is so important. It goes way beyond where you should spend your money on Friday night eating out. It's about creating a vision for yourself and maybe your partner that fits you individually like a glove. If you need help developing your rich life vision and making your money work for you, you can get help in my money coaching program.
You can join right now. Within 24 hours, you will have your vision on the way being developed. You can join at iwt.com/moneycoaching.
And now let's take a look at their follow-ups.
>> Hi. So, one of the biggest surprises from our conversation was realizing that we were stuck in a pattern we generally thought was the right thing to do.
Hearing that we were actually in desperate need of a larger emergency fund was really eye opening. It shifted the way we see our day-to-day routines and choices. My biggest takeaway was learning how to say no more intentionally and how using a shared philosophy can keep us on track. Now we actually have a reason behind our no instead of feeling random or restrictive. It gives us a sense of direction and something that can kind of keep pulling us back and see like oh if we follow this um philosophy or path we're going to actually be able to do the things that are important to us that give us our rich lives. So, we've already made several changes. We've canceled multiple subscriptions. And we called to negotiate and lower our internet, car insurance, and even pet insurance. We also decided to limit eating out once a week as a family, making it more of an important outing instead of just doing it together. Um, and we're starting a family meeting twice a month to make sure we stay aligned and keep checking in on our goals, our progress. Um, so overall this was a great experience. It gave us some clarity, motivation, and a better path forward that we really needed. So, thank you so much. Bye.
>> One of my biggest surprises from the conversation was realizing just how much our day-to-day decisions were driving our financial picture. It wasn't one big mistake. It was a lot of habits that continuously developed like eating out too often and our miscellaneous spending that added up each month. Uh, that was really eye opening for me. That made it clear that awareness alone isn't enough.
We need clear boundaries. Uh my biggest takeaways were the importance of being intentional and aligned as a family that includes developing a shared rich life vision and a family philosophy so our spending actually reflects what matters to us. I also learned how powerful it can be by practicing saying no in real time. Uh I did not attend the NBA playoff game and I have been saying no to invites to golf as well. Uh for specific changes that we decided to make um as a team, we've been really intentional in our changes. Uh first, we called and negotiated with a few of our utilities companies and we were able to lower our monthly payments. We also went through all of our subscriptions together and canceled everything that wasn't really adding value to our life.
Um just those two steps alone cut out a little over $2,000 in bills over the course of the year.
We also decided to temporarily reduce my 401k contributions down to the maximum company match and we also put a pause on our post tax investments and our 529. Uh the goal there is to really increase our savings right now and we've committed to putting $1,400 a month into our emergency savings account. On a more day-to-day level, we are limiting eating out to once per week. We know that there might be a few slip ups, but we are trying to set up set up ourselves for success by using chat GTP to create weekly meal plans and keeping that grocery budget to about $150 per week.
Uh, finally, we've set aside a specific day and time twice a month to continuously talk about our rich life vision and our family's philosophy. Uh, we plan to include our daughter in those conversations as she grows. So, this really becomes something we're building together as a family. Uh overall, this conversation gave me clarity, confidence, and a clear plan uh moving forward. Uh thank you. Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this podcast at iwt.com/apply.
Or second, you can join my money coaching program instantly at iwt.com/moneycoaching.
In that program, you get access to live virtual events, monthly group coaching calls, live Q&As's, and an amazing huge community of other people like you.
Check it out at iwt.com/moneycoaching.
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