I Will Teach You To Be Rich - 145. “Am I a bad mom if we can’t do a $7k Disney trip?”

Episode Date: February 27, 2024

Kristin is 32 and David is 38. They share five kids in a blended family and David is getting close to military retirement. The problem is their spending—fueled by emotions alone, they make purchase after purchase, soaring over set budgets and putting the future of their family at risk. This episode is brought to you by: Thinkific | The same platform I use to build online courses online https://thinkific.com. Facet | Get affordable, accessible financial planning with a flat fee membership. For a limited time, the $250 enrollment fee will be waived when you sign up at https://facet.com/ramit. Pique Tea | Get up to 15% off and 12 tea samples at https://piquelife.com/ramit. DeleteMe | If you want to get your personal information removed from the web, go to https://joindeleteme.com/ramit for 20% off. Viator | Download the Viator app and use code VIATOR10 for 10% off your first travel experience with Viator. Connect with Ramit • Get the Podcast Newsletter and exclusive Q&A about the show • Get Money Coaching with Ramit  • Download the Conscious Spending Plan • Listen to my book—now on Audible • Get my New York Times best-selling book • Get my no-numbers journal • Other episodes • Instagram • Twitter • YouTube • Submit a question for the newsletter iwt.com/askramit  If you and your partner have a money issue and you want my help, I occasionally select a couple to work with, free of charge. Apply for my help here. Produced by Crate Media.

You guys like getting played by your kids? I think it's guilt, me and their dad divorced. So I feel like maybe I put them in, you know, a bad situation. When they're with me, I don't want them to feel sad, or I don't want them to feel hurt, or I don't want them to, you know, negative feelings when they're around mom. Regardless of what we said down, I'm going to be a complete pushover for my family, especially my wife. If she says, well, I want to do this,

I'm not going to put my foot down and say, no, we're not. You're a pushover for your wife. Your wife's a pushover for your kids. Who runs that house? I mean, when it comes to running the house, it's me. When it comes to rules and chores and things like that. How about if they say I want to go to Disneyland? Like five of us, I want to go to Disneyland. How about that? If they ask me, dream on. Yeah, good luck. No.

And then they ask mom, and then what does mom say? Let's plan a trip to Disneyland. Let's go to Disney. Let's go to Disney. Meet Christine and David. Christine is 32. She's a business operations manager. David is 38. He's in the military. He's actually about to retire. Now, they have five children together in a blended family and they're here today because they have serious spending issues. It all starts with them describing a recent trip to Disneyland, but what you're gonna hear in our conversation today are skills around setting boundaries, around working as a team,

and even parenting. What do you do when you're in debt? You can't say no to your kids, and one of you is about to retire. Let's listen into today's conversation with Christine and David. Disneyland in October. I spend my money on my kids, my wife and my family,

and that's just how it works. When it comes to like eating and things like that, where we go to Disneyland, and it's $40 for a plate and I'm looking at it like it's a bag of chips and a sandwich guys. We could have saved literally hundreds. We had five kids with us that we were paying for hundreds of dollars on the three days that we were there not to include the drive there and then the drive back.

You went to Disneyland for three days? Yes, sir. Okay. If you had to underline it in a sentence or two, what is your issue with the Disneyland trip? Is it that you spent too much on sandwiches or is there something bigger? We did not identify a Budget it was just kind of a free-for-all and even I had requested like let's look at a hundred bucks a day What are you doing for fast math a hundred bucks a day and it was more like two hundred fifty dollars a day

And I'm like what is going on here? Could you afford quote $250 a day? Absolutely. Yeah, but it's, you know, what I like to spend my money on. Okay. Well, you did say you like spending money on your wife and your kids. So you're not wrong. I think it was we're planning. Honestly, the whole trip was a fiasco to begin with. So we rented out a 15 passenger van. I'll set up the scene. My mom, my stepfather, our four kids, my daughter's friend, my husband and I were all traveling. We rented this van. We started to go. And all of a a sudden in the middle of the freeway,

the van broke down. Oh, no. Yes. This is very scary. Here we are panicking. The kids are upset. We had just started our journey to Disneyland. And that was the first thing for me was, hey, let's just rent another vehicle from budget.

It's going to be easier. We'll take off. We'll go. Okay. How much did that cost? That was about $2,000. $2,000 for the rental. How much had the Turo would that have been? That was only like $500. Okay. I assume you didn't have to pay for the Turo, right? No, no, no. We didn't have to.

Okay. All right. So you spent an extra $1,500, which is a lot on this rental. Okay, so you're already starting off kind of way over budget. What happened then? So it's like, okay, well, let's go get some snacks for Disneyland tomorrow. And we went to a Walgreens, I believe was the only thing open at the time that was nearby. Like they had very limited snacks at this Walgreens that we went to. I was very surprised. I thought there would have been a lot more options. So I grabbed as many snacks as I thought would last us the couple of days at the park. Come to find out with five kids in a park all day those snacks were pretty much gone the first day.

And so after that, it was like, well, you know, we don't have any more snacks. So let's just buy them food from around the park. And you know, limit to a point where it's like, we're not going to buy a hot dog and an ice cream and a popcorn and this and this and that for each one. It's like, we're going to eat one meal and then we'll find some snacks in between. Okay. Where'd you stay at Disneyland? Our suite had two rooms.

My daughter, her friend slept out in the living room, pull out bed, and then there was a bunk bed where our three boys, 12, 14, and four all slept on the bunk bed. It's a perfect Disney hotel. I love it. Okay, so, and then how about the tickets? How much was all that? So, all together the tickets came out to about 1,500. 1,500, okay, altogether the tickets came out to about 1500. 1500, okay for the tickets 1500 for the van that's 3000, about 500, probably more like 700 for the hotel with taxes and all that stuff.

We're talking about 3700. What else? How much does it all end up being? For the kids mostly, I want to say maybe 300 a day for food and drinks, maybe anything that and everything that we were paying for for all of us a day. That's 300 a day total. So talking about like 5000 bucks for the trip, probably there's other stuff you're not including here. So 6000, would that be fair 6 to 7,000? Yes All right. What do you think David sounds about right? Okay. Is this normal? What did you think it was gonna cost before you went?

We were we were out of whack on the the coordination and communication to begin with the whole purpose for the trip Was my daughter was turning 16. So that was it was on her birthday We you know, we were there for the weekend. It just happened to be their spring or their fall break. My intention was to take my daughter, her friend, and my youngest being that her two boys who at the time that we planned this lived in Tucson were not going to be on fall break. But then that switched because last minute her oldest came to live with us. And then her youngest basically just took the time off and joined in. So it turned in

from going with, you know, five of us to going with seven of us. But did you have a number in mind before you went? Sounds like you didn't. 3500 bucks. Okay. That was my, yeah, that was my idea. Okay. What about you, Christine? Did you have a number in mind? It probably would have been close to five thousand, but honestly, I don't if that's one of my faults is I don't put numbers on things before I Go or spend things. How come David shaking your head David? Why? She I tried that was an initial conversation. I was like we need to talk about

How much we're gonna spend and she's like okay if you want to basically like we can but Not gonna stick to it. How do you know you can afford it based on what I know is in my account and what I know Isn't like our shared accounts. I know there's enough money in there to put to pay for that Okay, and what about if you had to buy something like a car? You don't have that much money in your checking account. How do you know if you can afford that? So I look at our bills, look our income and outgoing. I use a spreadsheet.

I have it very detailed as to everything that comes in and everything that bills wise we need to pay. So there's always going to be enough and then some in that account to pay our bills. And then I know how much after that, David and I both have in our accounts approximately. Very nice. All right. So you go to Disneyland. Unfortunately, the van thing happened fine. It was unplanned. You come back. Did you talk about the spending at any point? I told her she spent too much. Consider the following.

They had no clear communication about the trip. He had one vision, she had another. There was no real conversation about the financial part of it. Then unintended things happen like the van breaking down. Now that can't be predicted, but it can be planned for. Finally, speaking of planning, there was poor planning. The kids ran out of food, meaning that they had to spend a lot of money at the park.

As you can see, bad outcomes are most commonly a result of several layers of poor communication and decisions. This is why I use techniques like the five Ys to really get at the root of what's going on. It's not about the pretzel at Disneyland. It's much deeper than that. Don't go anywhere, we'll be right back. A few years ago, my mom hosted an online cooking class. We called it Cooking with Auntie,

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Okay, here's the scenario. You go to In-N-Out, you get the meal, the whole thing costs $7. Next month, you go same meal, same food, same taste, 14 bucks. What the hell? Then the next time three weeks later, it's 20 bucks, then 50 bucks, then $475. You go, what planet am I on right time three weeks later, it's $20, then $50, then $475. You go, what planet am I on right now? That's what it's like to pay a percentage of your portfolio to a financial advisor. That 1% fee that so many of your parents are paying and don't even know it sounds like

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you wanna get a second set of eyes on your finances, I would recommend facet.com slash Ramit. Again, facet.com slash Ramit. Sponsored by Facet. Facet Wealth, Inc. Facet is an SEC registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment, financial, legal or tax advice. Passed performance is not a guarantee of future performance terms and conditions apply. Now back to the show. Incidentally, doesn't this story read like so many typical American vacations? Mom is excited, dad is grumpy about the budget, and somehow it all kind of works out.

Except if you actually see beneath the surface, you realize that it didn't work out. And this trip is just a symptom of how both of them do not have a shared vision around money. It was like, yeah, it's definitely more than you probably would have wanted, but don't worry, it's covered. Is it? I will like use our credit cards, cards. We have our credit cards. They have high spending limits on it. We've always had the idea that if we put it on a credit card, we're going to pay it off as soon as possible. And we've pretty much stuck to our guns on that. There's been some times where we've gotten to places where we had to put it off a little

bit, but we're really good about paying off our credit cards. For me, it was like it's all covered. And within, I told him within the next month, it'll be paid off. And it was. Okay. I respect that. You have a vision. You have a point of view on your credit cards. I'm a little nervous how you said we pretty much stick to our guns. Our mindset is that we have to have no credit card debt. Like we should not be using it. David's very much so like, let's save.

What are we gonna do? Let's save and then do it. Where I'm like, okay, well, we have the credit card. Let's do it and then we'll pay it off. Well, are you gonna pay it off that month? Not always. I don't, I, and that's, I don't know. That's why I'm struggling because I don't, I, and that's, I don't know. That's why I'm struggling because I don't know if that is my upbringing or it was, like,

it's fine just if we need to put it on the credit card, we'll put it on the credit card and pay it off later. Come on, you know, you know, you've heard a million people talk about pay off your credit cards every month. This is not new. You don't need me to be, you don't need me to be here telling you that. You know that, right? Right.

Why are you BSing me right now? Cause I don't want to be the problem. Can you reconcile that with what you just told me about Disneyland? Like I'm building on my business and gaining more money and seeing that I have a lot more money than we've had in the past. So those things are easier to get paid off of.

But it just feels like we make more money, but it's always going out and we don't really know. It's not a feeling. It is reality. You make more money and you spend more money. That's not a feeling. Do we agree? Yes. It's math. So can you connect what you just said to the Disneyland story you told me about? Well, for me is that I'm not budgeting. I'm just saying, well, we have all this credit card. We can just use that. And I'm not focusing on actually what's coming in

when it comes to spending, making those or budgeting or doing things like that. I'm like, we can just spend it. Okay. Because I'm okay using credit cards. I'm okay spending out, but I just, I guess being okay that when we get to a point when David is retired and we don't have that money, making sure that it's there is credit card debt okay.

You know, being able to know You said I'm okay using credit cards. You have credit card debt right now, right? Yes. Yes, we do. Yes. So you're in credit card debt right now and David you're gonna retire pretty soon Looking about two months, correct? All right. So you're definitely going to have credit card debt then.

So what are we talking about here? We know exactly what's happening today and we know exactly what's going to happen tomorrow. What's the question? I think I'm... There's things that I like to buy. There's things that like to keep one of the things, my biggest thing, and we argue about this all the time, is to ensure like our kids are happy, right?

That's probably a big, huge thing when it came to the Disneyland fiasco is- Why is it called a fiasco? I thought it was totally fine. Besides the van thing. Why do you call it a fiasco? Just because we did go back and forth a lot about taking all of the kids. It was a sweet 16 trip.

My thought was that we were taking everybody. His thought was it's just my daughter and her friend. So when I brought up, okay, well, we can't leave the other kids out. Like that's not fair. He's like, no, why, why does that matter? I have a question. So I understand that, you know, as parents, you don't want to leave kids out. You want to bring them along, make everybody feel welcome. I totally get that. But putting that aside, financially speaking, did that affect your decision as to whether

to bring two kids or five kids? No. To me, I didn't even think about that in those numbers because I figured, yeah, you know what, we'll get it paid off. It's going to be fine. Right. We'll figure it out. Okay. And David, did two versus five kids, was there a financial component to that for you?

1000% yes. I literally broke it down saying like her two boys are One of them's 14 one of them's 12. They're both the same size their monsters when it comes to eating We can't go to McDonald's anymore and just grab a half meal and everybody's happy It's literally is it eaten as much if not more than me not to mention the tickets Also the snacks the food all that stuff and I said just along with the food I mean, we're probably looking at another $500 or $600 for the four days. You said that to her.

And Christine, how did you reply to that? I was just thinking of feelings. I was thinking, how do we let the kids out? They're going to be upset. And I think that's a huge thing for me. I always think about their feelings. And David's quite the opposite. What do you think about David?

So I didn't have the best upbringing. You know, we had issues and I tell her all the time, I'm like, these kids, I feel like I'm a very good dad and I feel like she's an amazing mother. We give them the world for them to skip a Disneyland trip, which mind you, we go almost every year. It is like, okay, so you'll go next year, or we'll take you on your birthday to go, you know, do something else with just you. We have the finances for

that. That's not a problem. And I have no issues telling my daughter, hey, dude, we took you to Disneyland. I'm taking this kid to Universal. We'll see you later. I hear that, Christine, there's a lot of feelings. Of course, you want to bring kids together. You don't want anybody to feel left out. I totally get that. And David, I hear that two additional kids, or two or three, especially at that age, they're going to eat a lot. They're going to take up extra hotel room. You're going to need a bigger vehicle. I totally get that as well. What I don't hear is the two of you breaking it down in a way that takes the antagonism away and says, hey, we're a team, and let's look at our plan because we're not fighting each other. Christine, you're a great mom. Christine says, David, you're a great dad. We all know

that. But we got to have some vision, some plan that we work through together. Yes. I think we see we have our own separate plans and our own separate ideas. And then we kind of just go along that path and not really put them together when it comes to things like planning a trip and how much money we're going to spend and who's coming and all that. It's always just, oh, well, I thought it was going to be like this and he thought it was going to be like that. The planning thing is, how to say it, it is good in theory.

I always try to have a plan. I always try to say, we need to do this, this is not. And regardless of what we set down, I'm gonna be a complete pushover for my family, especially my wife, if she says, well, I wanna do this, I'm not gonna put my foot down and say, no, we're not. You're a pushover for your wife. Your wife's a pushover for your kids. Who runs that house?

I mean when it comes to running the house It's me when it comes to like rules and and chores and things like that. Not absolutely Nobody's gonna push me around when it comes to that kind of stuff. You watch dishes. I tell you watch this you can watch dishes Okay, how about if they say I want to go to Disneyland? Like five of us. I want to go to Disneyland. How about that? Most likely if they ask me Dream on yeah, good luck. No, and then they asked mom and then what does mom say? Let's plan a trip to Disneyland. Let's go to Disney. All right. So you guys like getting played by your kids. I

Don't want it to make it sound like our kids just run all over us and they can do whatever they want But when it comes to for example my daughter's a sophomore right now. She's like hey for my graduation Can we go to Hawaii and I'm like Free graduation I got a backyard barbecue and you're asking for a I can't even tell you how many thousand dollar trip It would cost us to go to Hawaii and and also can we bring my friend and I'm like My wait hold on that's that that's actually a really interesting example. So when she asked that What exactly did you say to her? My initial response was you're tripping that was for me him, okay, and then what did she say then? Did she say, come on, dad? No, she was basically like, why? It's like two years away. I'm sure we could say for that. We

as in like, she helps with that. And then what did you say? At that point, that's when I was like, okay, a two year two year away trip. We could definitely plan for that. I feel like I'm in a horror movie right now. And just, it's all clear. And then I'm turning the corner and I just saw a freaking zombie walking towards me. Like, does anybody else see what I just saw? Yeah. All she had to do was be like, come on, dad.

And you were like, sounds good. We'll say for it, no problem. I think I'm starting to understand what's going on. Christine, you wanna add anything? No, I mean, that's pretty much what it is. It's the convincing. If you can get him a good he's very logic logical, right? So if you can convince him logically and the kids can convince him logically of something they're like, oh Okay, well, maybe we can do that

We'll discuss it sometimes we'll discuss it sometimes. I'll just take the kids and we'll do whatever it was Okay, I stand my ground as much as I can but but it's, come on, let's be real. Yeah, we're probably gonna do it. People with spending problems almost always have problems saying no to their children. The two are highly correlated. In these situations, we almost always have one parent, overwhelmingly its mom, who feels bad if she says no and wants her kids to have everything. And almost always this has a lot to do with how she

was raised. Notice also that in heterosexual relationships at least, dads are very quick to say, it's not like they walk all over me. And then it turns out that actually yes, the kids do walk all over them. The only exception was episode 102, where you didn't even hear the slightest pushback from dad. Here's the point. This isn't just about dollars in the bank. Their financial troubles, like so many overspenders, are almost certainly due to an inability to set boundaries. There's no shared vision of how they want to use their money. They don't have any process for making decisions. In fact, the way it usually goes

is Christine says, come on, David says, really? And then they end up doing what Christine wants. This is so common, it's literally a sitcom trope. This is not a healthy dynamic. In fact, it's one that's perpetuated across generations. Mom and dad couldn't say no, so we never learned to say no, so our children are not going to learn how to say no, and so on. We'll be right back after this. A few years ago, I was at a tea tasting in New York with one of my buddies. I thought it was going to be a normal tea tasting. Suddenly, six people from Japan come in.

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R-A-M-I-T. At this point, I decided to take the conversation in a different direction. I'm going to do something unusual. I'm going to jump right into your numbers today. I would like to understand where you both are with your numbers. And I think that's going to affect the trajectory of what we talk about. How's that? Sounds good.

Christine, why don't you read off the words in bold and then the number next to it? Let's start with your net worth. Okay. Assets. It's a 696,349. Investments, $9,054. Savings, $7,049. And then debt, $700,338.

Okay. Total net worth? It's $12,114. All right. How do you feel about that number? Not good. I think for me, I want it to grow. I want it to see, like, I have that million-dollar mindset where I want to have that money and that wealth.

So, to me, it doesn't seem good at all. And you're both in your early to mid-30s, correct? have that money and that wealth. So to me, it doesn't seem good at all. And you're both in your early to mid-30s, correct? Yes. How do you feel about the number, David? It's astronomical. And that's... Which number is astronomical?

Pick one. But to me, I've never had a savings account. I've never had... Not a deliberate one. I love that. Um, The fact that that we are able to afford and purchase a 630,000 dollar home with just saying like that's what we want Is it blows my mind? I also want to have that mentality of like, let's Let's be millionaires like I do But that's what I try to tell her like We can We make a lot of money.

Okay, so you never had a savings account, so for you $7,049, what does that feel like in a savings account? For me, it's crazy. It's crazy that we did, like we did that on purpose. And we said we're putting money away. I've just never in my past relationship as a kid growing up, that was never a thing. And what do you think about the debt amount? You know, it's $700,000 of debt. What do you think about that thing? So it doesn't scare me too much the fact that I know that obviously the house is the huge majority of it. My truck is at 0% interest. So the loan that we have on my truck, you know, that's one of the things that I've kind of learned is if you have 0% interest loan,

you have no, and you're paying it off on time and it's kind of free money, it's just sitting there. Again, you take away a $630,000 house and that makes it for a lot less. Your current household income is $213,000. Did you all know that is how much you make household income? It's almost like a delusion for me. I can see it. I can see things getting paid off. And I'm like, ah, it's good. And I don't see the true depth of what it can cause down the line. Like you said, instant happiness, but it's not setting this up down the road. David's about to retire. David, you're going to have a pension. What percent is your pension

going to give you? Top 30, 50%. I think I'm going to be getting, let's call it $2,700 a month. What? Are you serious? Now, mind you, I'm looking forward to and fully anticipate to be getting 100% disability, which adds another roughly $4,200 a month. Okay, so $6,500 a month. So I'll be roughly back at $7,000. $7,000. And you currently make $8,000, so you're going to make about $7,000.

Okay, fine. So it's roughly the same minus $1,000 a month. Fine. Let's look at the rest of the debt. So you mentioned some credit cards here. Christine, what are these credit cards you have? The AmEx was the 47. Discover is the 7,000. And then if we scroll over a little bit so I can see, yep, the Zales is the 3,000. The other AmEx is David's AmEx. So it kind of goes a log with that explanation. What do you guys have $3,000 on a Zales card? Would you like for me to explain? Yeah, yeah. Happily, five year anniversary, five year wedding anniversary.

I said, let's upgrade your ring, $5,000 is what we saved. You got your budget, ready to go. She spent $8,300 and something. So that's the extra money on the Zales card. Correct. Okay. What do you all think about this? Seems to be a pattern I see.

Hmm. Well, I think with that one, it was 0% APR. Let's pay it off before it gets any kind of... Did you? It's still going. We still have time. How long until September so we've been paying about $600-$700 to it. All right

What interest rate is on your house your mortgage? So we're actually going to sign for it tomorrow It's a six point one two five. Wait a minute. You're signing for a house tomorrow Yes, so that's Yes, yes, so that's what we're budgeting in. Uh-huh wait. Oh Six how much is hold on? I did not know this. Okay, so you are getting a new house What's the how much you putting down and what's the mortgage? So we have a VA loan.

We don't have to put any down. We did put down a 4,000 deposit, but the mortgage is going to be, I believe, a 4,100 and something payment a month. It's for $630,000? Yes. Okay. Yeah, I can pull up my screen. Let's just do it online here. We'll just do it right here. Watch. All right. 30 year fixed. What'd you say you got 6.1? 6.125. Okay. So your payment is what? 38.28 about? Mm-hmm. How did you decide to buy this house? Like, how did you decide if you could afford it?

I plugged it into the spreadsheet, saw what the house payment was going to be, make sure that we still had the amount to put in. We're still going to be able to have the amount after like extra for anything we needed. And then that's kind of how we decided How you guys buying a house by the way? That comes in so was that 900?

What a surprise So we need to what number first and I'm bad at quick amount Yeah, that's nice and of, you're not factoring in maintenance on that. You're not factoring in the opportunity cost of, I know it's a small down payment, but investing that amount, not factoring in any of the labor in terms of going to Home Depot, et cetera, et cetera, et cetera. Oh, and of course, not the transaction costs of buying it and selling it, which will be tens of thousands of dollars.

Do you have to get this house out of curiosity? Is it too late to say no? We would lose the $4,000 escrow, but it's not too late to say no. So for savings it's... Okay, look, I'm not going to tell you to change something at the very last minute. Most people are not particularly savvy on how the financials work behind Buying and selling a house. There's a lot of hidden costs a ton Like so much that it could make up for all the money you're trying to save in other areas. I'll simply say this

You have an amount that you're going to commit To buy the house for and to spend every month. Fine. So you've locked that in. Fine. That's part of your rich life. I don't mind it. We now got to make everything else work around that. But I have a question because I'm looking at your CSP. And when you say extra, if we just skip down really quick to investments, you have zero and savings,

you're saving $175 a month. How do those numbers strike you? I want to see more in investments to be educated more on where to put those, that funding. I think neither of us were educated. It's acting off of feeling versus actually diving into the numbers. What feeling? A Disneyland trip.

The kids, us, I know we're going to come out of that feeling happy. It's a great experience. It's memories. It's things we can look back on. Having the vehicle, like a vehicle big enough to fit my kids in a safe, like with a truck, he's wanted a truck so that I know that it's going to invoke a feeling of happiness and, you know, being able to carry things in the truck that he couldn't, you know, in a smaller vehicle. The ring, you know, to me, it was the first ring that I actually

got to pick. And so... Okay, so you're happy. You bought the ring. You bought the truck. You bought the vehicles. You bought the Disneyland trip. So, so. So if all that worked, then why are we here? I think it's thinking about the future and those spending habits and whether or not we're actually making the right decisions. Like, okay, what's your rich life? What does your rich life look like? For me, it's being able to take the kids to Disneyland. It's being able to splurge a little bit on a ring, but looking at the other side of it, is that when we're moving on into the future,

is that truly going to bring us happiness down the road or is it just instant gratification? Can I be honest? I think that both of you like to make impulsive decisions. And now that it's starting to catch up with you, where you have debt and you're realizing that you're spending thousands of dollars every month paying off debt, you have essentially very little in savings and investments, especially at your income level. I think you came to me so I could be the responsible

one and you could keep doing the fun stuff. It's someone actually saying, no, this is, you cannot do that. I think why do you need a parental figure like you're a child to tell you no? I've never had someone say, no, you can't do that. Or if I ever did as a child honestly I did it anyways. Did you catch that? Christine said she'd never had someone tell her no and now she's passing that exact same money message along to her kids who will pass it on to their kids. Remember what I said a few

minutes ago about perpetuating money attitudes across generations? Well, I had to get really honest with Christine and David about my role right now. Well, I'm just going to tell you right now, I don't do the parental thing. I don't like treating adults like children. I think if you want to be treated like a child, there are other people who will do it. And I also find that when people try to enter into these dynamics, they're not actually serious about changing. You're nodding. Yeah, I mean, and I can see it in other aspects of our life.

And I'm actually really happy we get a chance to talk. I am. I genuinely want to help you. But I think you expected me to give you some razzle-dazzle Excel math and a couple of tips and it would all be fixed and that's just not what I do. David, I see you nodding. I think that that not necessarily that exactly but yes I think she kind of wanted to get some justification in a sense of like If you just change this one thing then then you'd be you'd be fine But not the one thing that you know, it's obvious to change this spending something else maybe

Let me cut in here really quick notice how David is trying to assign and delegate the problem to Christine When he himself is involved in it too and delegate the problem to Christine when he himself is involved in it too. Sure, Christine might be unable to set boundaries, but so is David. The only difference is he pretends by saying, no, we shouldn't do that until his family says, come on dad, and then he agrees. It's for me it's the consequence is what keeps me from being stricter with my money, with our money. Again, I have no problem saying no, but then it looks into what's the consequence of saying no. I tell her no and stick to it and say, no, we're not, we're not doing that. It's going to be in my mind a spiral of unhappiness. We never get to do anything.

I'm, you know, and it turns into fighting and then it turns into of unhappiness. We never get to do anything. I'm, you know, and it turns into fighting, and then it turns into just unhappiness. Here's my question. Why does it have to be this dynamic where he's, quote, putting his foot down? I don't like that dynamic. It's very present in heterosexual relationships with money. The guy has to come in and put his foot down for the frivolous woman spending. I hate that. It's so reductionist.

It's disempowering for you, Christine, because you are treated like a child. And I don't even, he doesn't even want to do it. Nobody wants to put their foot down for their intimate partner. This whole conversation has been dictated by this frame that somebody has to say no, because they're the adult. And then someone's the frivolous butterfly, just spending and doing what they want, so emotional. I don't accept that.

I think that's a story you tell yourself. And honestly, that story is setting, it's gonna set you up for a really bad time over the next few years. This is very hard to hear because what I'm really saying is that the entire way you look at the world is not serving. They both have adopted this frame that spending is bad, that one person is an adult, that

another can't be controlled, that kids need a lot of money and experiences to be happy. Just think of how hard it would be to change even one of those worldviews. Honestly, in my experience, people will not change a deeply held world view unless they absolutely, positively have to. And sometimes not even then. Even when the stakes are life and death. Let's take a quick pause for a message from our sponsors.

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Download the Viator app now and use code Viator 10 for 10% off your first booking in the app. One app, over 300,000 travel experiences you'll remember. Do more with Viator. Let's get back to our conversation. Our youngest at the time, Doodle, turns 18. He's gone and he's going to go live his life and he's gonna be gone and who's gonna be left? It's gonna be me and you and that's it. And we need to understand that it is a team. We are a team, sure as a family we're a team, but ultimately me and you only are a team.

And we need to stick to that when it comes to anything. Sure I could be, I'm already looked at as a tyrant because like I said, if I say wash the dishes, there's, can't negotiate that. You're gonna wash the dishes. So I have to, in order to not seem like the complete dictator of the house, given in other ways,

and it definitely shouldn't be the money, but that's the one that obviously I've chosen to not put my foot down and say no We're gonna if we're gonna go to Disneyland we're gonna be frugal. It's not me and sheep. It's being Just better planning was your dad. It's hiring. I didn't have a dad my my stepdad came in when I was about 12 almost 13, but yeah very much so he was He what he said goes, and in the story.

Would you say you've adopted some of those principles into your own parenting style? Very few, I really try to do, I really try, really try to not be the, because- But did you just say two seconds ago that I'm pretty much the tyrant in the house? Yeah, in a sense of like, um, I know what needs to get done and I'm not gonna, I'm not going to,

like I'm not gonna live in a dirty house. Okay. And I'm also not gonna clean up after you. I know he can probably attest to it, but I have come a long way from the beginning from when we've, we first got together, um, of telling them no. It's not always easy. Don't get me wrong. Like that is why you not, why do you not together of telling them no. It's not always easy. Don't get me wrong, like that is- Why do you not like to tell them no out of curiosity? I think it's guilt with my older two. Why?

Because, you know, me and their dad divorced. So I feel like maybe I put them in, you know, a bad situation where when they're with me, I don't want them to feel sad or I don't want them to feel hurt or I don't want them to negative feelings when they're around mom. And if you were to describe your identity today as a mom, give me a couple of words that would come to mind for you. Giving,

Faring, Faring, what else? Understanding Nice Supportive Love it. Okay. If you were to say no to Disneyland, now describe who you would be as a mom. Not caring. A bad mom. My rich life would be able to, when someone needs help in my family or anything like that that I can

Guilt freeze give them the money how much not have to feel bad if I could Get my mom the enough money that she needs to be able to be comfortable to stop working I would say Maybe a hundred thousand dollars to stop working, I would say maybe $100,000. I think it's a hard truth that I don't wanna accept at times because I'm like, no, they need me. And it's not allowing them to see those things

that they need to do to build or grow or to be and get to the levels that we are at. Can't really think of a worse thing for a mom to think of herself as when it comes to parenting, a bad mom. Okay? Right. So your mom, you mentioned,

are there others that you want to help out financially speaking? I'm my sister. I help out financially with things every once in a while I have my my best friend my goddaughter You know being able to see them be successful and not have to worry about things Wait hold on. Hold on aren't you worrying about stuff? Yes, so why are you helping them out with money when you don't have extra money? I guess I would rather see them being able to be okay,

knowing that eventually I'd pay off whatever I need to pay off and I'd be okay. It makes me sad that you would see saying no to a $7,000 trip make you a bad mom. It's from what I've heard. I don't think you're a bad mom. In fact, I've from what I've heard. There's a lot of things you do really well. But the fact that you have created an identity where in order to be a good mom, you have to what? Spend money on my kids. Spend every dollar you have and never say no. That is the trap that you have created in your own head and that's why it will be so hard

for you to change. There's even one more wrinkle. David, how do you think you play play a role in this. Very much an enabler. Yes. I, we have this conversation. It is, it is a, if not a weekly, but bi-weekly of the, you do not have to buy them stuff so that they'll love you. Like they'll love you regardless. You're an angel to them. David, does it work?

No, absolutely not. Has it worked for the last 10 plus years? Maybe if you try it for another 20 years you'll get her. What do you think? Don't you think you've tried it? Okay so that doesn't work. What do you get out of it? Frustration.

I know seeing her happy makes me obviously feel better, but that's really it. It's her. If that were the case, then you would literally just be like, I have a blanket yes to everything you ever want from me. I'm not going to snipe at you about the Disney lunches. It's all good. Yet you don't do that. Correct.

I still try to be the voice of reason. Oh! What does the voice of reason do? I mean, be reasonable? Well, she thinks she's being reasonable too. She knows she's not. She has very good reasons. She goes, I got my spreadsheet.

I'm creating memories for the kids. I don't want to be a bad mom. Those are all things she thinks are reasonable. So what do you think is reasonable to say? To say no put up a false fight and then give in is that reasonable? No, but you do it correct, I think what you get out of this is you can inject a feeling of financial inject a feeling of financial conservatism, you can be like, we really should be looking at our spending, we should be careful. And then you go, all right, I said my part, I don't need to have

any responsibility in this, I'm the responsible one, but she doesn't listen. And then you dump it on her. Sure. What do you think about that, Christine? I can agree. It's that burden of he told me, but if I make the wrong decision, then it is my fault, whatever the decision was. I think to try and convince that whatever I'm saying or the way that I think we should go is the right way. Yes. And why do you want to do that?

Why do you want to convince him? So I can keep doing what I'm doing. Yes. And so that what? And so that the kids are happy and I'm happy. And that he's happy too. Yeah. Yeah. You want him to like you. And you want the kids to like you.

Has he ever really gotten mad about the spending? Like really gotten mad? No. No. Has he ever made a household wide change because of the spending? No. Wow. That's so interesting. Okay. What are you both noticing about this conversation right now? I feel like it's more going into the thinking about it. It's changing, you know I think at the beginning where we have we're throwing out all these reasons and all these things and now it's like, okay looking deeper into it and listening What do you see? A shift

What shift? mood and What do you see? A shift. What shift? Mood and, like I know for me, it's just, it's finally finding these pinpoints of, I knew they were there, but I couldn't accept them. And now that it's looking at it and realizing where it's coming from, it's just different.

I don't know if I understand it. Can you explain to me in a different way? So, at the start, I came in here, like you said, I have my spreadsheet. I know what I'm doing, like, it's fine. And then realizing no down the line, it's not going to be fine. It was kind of like you were saying a justification as to, yeah, yeah, you're doing what you need to do. Just put some money into stocks or just do this. And it's truly a deeper fix than just on the surface spreadsheets and looking at numbers. It's like, what's the root cause? Why does this keep happening? What is the root cause as Why does this keep happening? What is the root cause?

As far as you understand right now? For me, like it's no consequence. I have no consequence. I'm going to do whatever it is that I want to do no matter what. I don't see a consequence. And if there is a consequence, I'm already like, this is how I can fix it. This is how I'm going to fix it. It's very tempting to start rerunning these stories

because they're so visceral and vivid to both of you. Do you all notice that you do this a lot? It literally just happened last week. Okay. Christine is nodding. We don't come up with the plan together. Like, what we could talk about it, yeah, but when we sit down and do the plan,

I'm the one doing the plan. Why is that? Because David just sits there and lets me put the numbers together. Why is that? He doesn't really double check it or anything. Why? Because I think ultimately I know she's going to do whatever she wants anyway. So what's the point?

I think maybe it's a lack of trust here. My part or her part? Tell me. I definitely don't trust that she'll stick to a plan if we make one. Yeah, I can see where he's feeling that way. I've definitely set a plan and gone over budget. I could go to spreadsheets, you know, all day, every day, but do I stick to it 100%? No. So why you even do it? It gives me that sense of, uh, we're okay.

Feelings. We're going to be okay. Yeah, it's the feeling. Feelings are important, but they're not the only thing. And I get the sense that you let feelings control what you do with your money. Yes. Do you think that maybe there's a different way to manage your money? Yeah, and I think it's the feelings can sometimes drive you

away from what your ultimate goal is. I think. But you don't have a goal. No, not written out, not. I think it's an idea of the goal. It's the idea of what we want but it's not written it's not put out there it's kind of just keep making money and then you know keep growing keep buying things well that's America you are like literally tens of millions of Americans you could

do it it'll be fine and then at some point one of you will get sick or you'll get laid off and it will be a panic. You'll go into more debt and then you'll just do that for the rest of your life. You know people who've done that? How is it for them? Not good. Why? Not good. I mean, I've seen, you know, even my parents, they can't retire. They're still working. You know, my mom has fibromyalgia. And so she's always in pain and she's always hurting, but she can't not work. She has to work right now to make the money. I hate that. I hate that for her.

I hate that for your family. I hate that for you. Did you see the show that I had on Netflix? I hate that. I hate that for her, I hate that for your family, I hate that for you. Did you see the show that I had on Netflix? Mm-hmm. Okay, do you remember the couple, Millie and Christian in New Jersey? Christian was the one who wanted to retire his mom. Do you remember this? Yes.

Did that connect with you? It did, yeah. I am the person that will buy stuff for people because I know that they are struggling. And he tells me that all the time, you know, we go to dinner or we go, you know, we buy food for, we're going to order food and I'm like, okay, what does everybody want? So I want to take care of everybody. I want to be able to know that I can take care of people and buying things for like my mom or like they came on the trip.

And there's some things I did pay for for like my mom. And it's like, for me, I don't, I'll let friends borrow money. And so to me, it's like taking care of others. When do you say no? If someone's hurting some it's it's very rare that I say no When was the last time you said no? I couldn't tell you You say yes to everyone except for the two of you Because yes

would mean saying no to certain other things. And Christine, if you said no to the people in your life, what would that make you? It would be hard. It would be hard because I feel like I've taken care of a lot of my family and a lot of the things for them. And so to me, it almost feels like a failure,

not being able to be there for them, not being able to help them. It would be hard. It would be hard. I would feel like I'm abandoning or not giving my 100% to help them. Do you have to help them through money? I think that's the only thing I feel like

I can help them with right now. I can be there for them. It just doesn't seem enough when I see that they're struggling or that they need something. So I'm like, okay, well, let's figure out how we can get that for you. I can understand when somebody's struggling that I can understand but I see the same

principle with taking five kids to Disneyland. Kids don't need to go to Disneyland right? No. Can I ask you something? You ever give them an amount and you say here's what this amount is for. It's up to you how you want to spend it. Have you ever done that? Sort of. Yeah, how so? School shopping. I told her we had all the kids and I said, I think it was $200 per. And that includes clothes, backpack, shoes, all this stuff. But I don't know, they either of them stuck to it.

She was just like, that's fine. And then what happened when you took them out, Christine? Yeah, it was like, oh, well, this is just a little bit more. Okay, that's fine. Okay. You know, I kind of gave into those, you know, they wanted the name brand, the more expensive, the we didn't want to shop in the sales areas.

So what lessons do you think they took away from that. That they can spend money they can spend it's okay you know we had a budget but it's okay. Right okay. Going forward. For school shopping clothes etc. How does it work Christine tell, we're gonna pick a number and put it on here for the month for conscious spending plan. So if your kids come to you and they go,

I need this, I need that, what are you gonna say to them? Well, I think we can set a limit. We can say, okay, you can have $25 and whatever you can buy with a $25 this month. Or close, then that's your limit. Damn! Okay, round of applause then that's your limit. Damn. Okay. Round of applause. That was so good. You caught that ball and you handed it very lovingly right back to them.

Are you seeing this, David? It's a beautiful skill. You can adapt this for your own style, but there's something really, you know, Christine is very talented at this. It's amazing. I think there's been a bit of a breakthrough here, Christine, that I see in you. I could see, I mean, you're skilled for sure, which is amazing. But there's also like, you're starting to develop this visible confidence. Like, yeah, I can do this and I actually like it. Am I reading this correctly? It really is.

It's filling that way. I'm taking out the idea that I'm a bad mom and I'm getting the idea that I am a good mom. The things that I'm teaching them now are going to benefit them in the future. So I'm not a bad mom. I'm a good mom. Yes, you're a good mom. Yes.

You're a good mom if sometimes you say no, you can do it lovingly, but you'll teach them a lesson along the way. They won't realize it for a while, but you are teaching them something. Okay. Fantastic. Can you imagine in an alternate reality where you had a fund, you were saving up for the Disney trip and one or both of you overspent on something and you just couldn't afford to go to Disneyland that year. And what would you have told your kids? Sorry, we overspent on Christmas lights.

Therefore, we can't go to Disneyland this year. How do you think that would have gone on? Well, they'd be all sad and upset, but it is what it is, and we have to cover what we need to pay for. Yeah, but there's never been that conversation in your family ever, right? Not at all.

No. I give it about one night. One night where you tell him we're not going to Cheesecake Factory, everybody starts crying, freaking throwing things across the room, breaking glass, and you go, fine, fine, fine, we'll go to Cheesecake Factory. It's fine. And that's the end of that.

So what do you want to do? I want to change. I want to be able to be that partner where he's not the tyrant. We, he and I are on that same page where I can also say no Partner I love that. Hey, Christine. What do you do for work by the way? Business manager. I have contract. I run different From parts of businesses. I can do operations for one business. I manage contracts for another business. Love it You got people you can count on at work who you know will always deliver Yes people you can count on at work who you know will always deliver? Yes. Love that.

How does that feel to have that person or people at work that you know you can always count on? Amazing. Because I know there's not a lot of them. So when you have one that can just deliver, it's amazing. I love that. Now, what if David was that for you and you were that for him when it comes to your finances?

It would be amazing to be able to just, you know, both be able to counter each other with those and immediately know that whatever those decisions, we've already discussed them together as a team and we're sticking to it. I love this. It's a totally different way of looking at your relationship with each other and with your kids. It's like, no, we're partners. We're gonna talk about it. We're gonna discuss it. We might disagree on certain things.

We're gonna come up with something that works for both of us. And I know 100% I can count on him and he can count on me. Yes. And I think being to beat that accountability for me, because he does, we do come with plans and it was always like, well, it's gonna be fine. But now it's, no, this is what we decided. We're a team. You're only as strong as your weakest player and right now I am the weakest player. So I need to step up and be that partner with him.

Okay. I love that. David, I know that you know what it's like to work with a team. What would it be like to have a partner when it comes to your finances? I mean, it would be almost a sense of relief. I've used that term many times to say, we need to take care of each other. Our kids are great, our kids are taken care of, our kids are living a very, very nice life, especially compared to what we grew up with. We don't have to do all this stuff.

And again, it's the putting the foot down thing, I hate that mentality of doing that. They need to understand like, look man, you guys are in a great house, you guys are, you don't want for anything. Just because you can't go to Hawaii for your graduation, like you're not being a bad mom, like that would be awesome. But not at an expense of us not having anything to show

for our own retirement and our own savings. Really good. I love everything you said. And I'm gonna give you a couple of subtle reframes because I think these will come up later. The idea that if we say no to our kids, we're bad parents. Let's reframe that into we're going to put us first, mom and dad as a unit first, and we're going to have, we're going to provide a great, safe, fun life for our kids. But as a unit, our plan comes first. Okay. How would that feel? It'd be awesome.

I know you like it, David. How about for you, Christine? Like I said, it makes sense. That's what we need to do us first. So it's better to build it and to be on that same page where I know that when I say no to my kids, David's there with me and we have each other. You can be a strong, capable person who's taken seriously and you can do it with love too. You can be like, you know what? I wish we could fly.

We're not able to do that based on our plan for this year. End of discussion. Why are you smiling, Christine? She's like, yes, yes, that's what I've been telling him. I'm like, what the hell? What are you smiling? Well, it's just like changing the tone and approach. And I know that's hard for him.

And that's the thing is like, I know that's hard for him and that's the thing is like I know that's difficult. I told us my tone all the time. Okay, that's yes, but just changing it around because then it's more understanding and even I think with me if he were to just say it that like that more so than no you cannot if it's more like hey you know in that loving kind of way I'm like you know. Okay this is incredible is incredible. Look at this, you guys. Both of you, look at the smiles, I love it. Okay, this is a way to connect. This is so amazing.

So now that we've established that the two of you are going to be a unit, can we come up with a name for this unit? Call it anything you like, team whatever, or the go-to unit, whatever, give me a name. Team Herm. Okay, David, are you on board with that? Oh, yeah. Okay.

That's what they call him. Like, that's the last, the short version of our last name. Love it. Love it. Team Herm, that's the two of you. I would recommend you come up with a little logo. Two of you can draw it out. Pick something fun that the two of you come up with together. Just the two of you.

Team Herm. Two of you can draw it out. Pick something fun that the two of you come up with together. Just the two of you. Team Herm. How would you describe Team Herm? What is Team Herm like? Number one. Love it. What else? Let's go back and forth. Cross the ball back and forth to each other.

Driven. Driven. Keep going back and forth to each other. Driven. Driven. Keep going back and forth. Successful. Cute. Um, hilarious. Together. Love it. Okay. Hold on. I got to take a round of applause. That was so good.

Watching the two of you right there, hold on, I gotta take a round of applause. And that was so good. Watching the two of you right there, watching you showed me exactly what you mean when you said, look, we spend a lot of time together and we love spending time together. I could see it right there. So that was really cool. Thank you for showing me that. Now, when you make decisions,

you also wanna ask, who's David on Team Herm? You know, you've seen those shows where it's like American Gladiator, whatever, they're like six, four from Belgium, whatever. So David in the past would have been Tyrant, what else? Straight. Straight, yeah, that's good.

What else? Rule setter. Rule setter, that's good. What else? Rule setter. Rule setter? Uh-huh. And what about when somebody said, come on, Dad, what would you have done then? The push over. Push over. Yes, that's the old David.

Okay, what's the new David in Team Herm? I mean, I'm not just a leader. I love that. Damn. Round of applause. So good. There's such an immediate vivid difference between a tyrant and a leader, right? What's the difference, David?

A leader, I think, is a little more respected over feared and a tyrant is feared over respected. Yeah, I like that. And a leader inspires you. Because ultimately, like you know at work, your leader has to get you to do what you're going to do and do it well without them being there. Just as you do, but a tyrant always has to be watching over you. I love that.

Okay, David used to be a pushover, but in Team Herm, David is a, I would say like, like a listener, like you listen, you can hear them out, but you don't have to say yes. Wow. I bet you David, you would have never thought of that one. No. So rather than being a pushover where you say yes, but you pretend it, but then

you say no, it's actually like, you know what? I'm gonna listen. Christine, do you see how much work David's gonna have to put in here? Yeah, yeah, I think both of us. Exactly. And I think that he would be willing to put that work in if you are putting in equivalent work

and you're both talking about it and sharing. Yeah, I think that's the big thing is sharing and talking about it. But like really coming together and saying, okay, this is the plan. This is what we did. This is what we're going to do. I found this conversation really difficult. The reason that I do what I do is that I went through my own process of learning about money. I know how hard it is to change the entire way

you look at the world. It's not easy, but I've also seen what happens when you can do it. When I see couples talking about money in a way that drives them apart, it doesn't bring them together. It's painful to see, especially when I know that they could live an incredibly rich life. Like, I can see their numbers. I can see that with a few changes, they could bring their family together. They could have their kids participate in paying off debt and saving and investing and, yes, going to Disneyland. But of course, it's not my journey. It's not my rich life. It's theirs. So what I can do is to have a conversation with them, hopefully bring them together and show them a path of what's possible. Today,

in the end, I was able to give them a few gentle suggestions. When I saw how deeply held their worldviews were, I realized the best thing I could do would be to allow them to build a connection between the two of them so they could see themselves as a united team. The rest would take a lot of work and also a lot of luck. I spent a lot of time demonstrating specific word for word scripts that they could use in certain situations they're going to encounter. Like how to respond to family members who want money and kids who want a trip that they can't afford. But again, changing someone's worldview is incredibly difficult and it's nearly impossible in just a few hours. The fact is they're in debt but they can still afford to have a nice house

and take some trips and cars. There's nothing right now that's going to force them to change. cars, there's nothing right now that's going to force them to change. So while I genuinely hope they make a huge change, honestly, I would be surprised if they do. Let's hear their follow-ups starting with Christine. The biggest takeout of all of it for me was that I can help others and not necessarily solve their problems, but be there to support them in other ways other than money. And also, David and I are number one always when it comes to our finances and our team, so that we always focus on each other's goals and what we wanna build versus going off and doing our own thing.

So David and I have sat down, looked at our finances and have already started setting towards our goals. So we appreciate you giving us that little kick in the butt that we needed. And we look forward to meeting those goals that you helped us to see clearer. Bye. Let's move on now to David's follow up. And we look forward to meeting those goals that you helped us to see clear fight Let's move on now to David's follow-up

one of the things that I learned that I think is going to be most impactful to me and my wife and our family is That this is not gonna be an easy track This is gonna be something that we're gonna have to put some serious effort into track. This is going to be something that we're going to have to put some serious effort into. Changing our habits is it's going to be kind of tough but I know after we've talked that this is important to us and we do intend to make it a priority. I think that was our biggest thing. We would always talk about doing it and never actually writing it down, never making it a goal. We're going to be moving forward with doing better for us,

me and her specifically. But again, thank you so much. I appreciate their follow-ups, but it is notable that I didn't get any specifics about what they're gonna change. Christine and David, I wish you the best, and I wanna thank you for coming on here and discussing your finances with me.

Thanks for listening to I Will Teach You to Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven't read I Will Teach You to Be Rich, my book, pick up a copy. You can get it at any bookstore or any library and it will show you the specific tactics for how to build the I Will Teach You to Be Rich system into your personal finances.