262. "We make $167k. Why do we feel poor?"

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Money For Couples with Ramit Sethi 1h 52m 1 speaker 6 chapters transcribed 1 month ago
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Why do Drew and Amanda feel financially stretched despite a $167k income?

Drew 0:00
$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.
Ramit Sethi 0:19
I have a hard time saying no. Money's 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.
Drew 0:31
What do you think is going on? I know what to say to eventually get what I want. With money, we've seen how each other maneuvers with it. And so we need each other to do the bad things. 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.
Ramit Sethi 1:00
Why is it that you make good money, but you still worry about it? Today, we are gonna get into that very question that plagues millions of people. I'm gonna 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 slash money coaching. Assets, $925,000. Investments, 454,000. Savings, 13,000. Debt, 568,000. Net worth, $824,000. Now let's look at their fixed costs, 89%.
Ramit Sethi 1:59
Right there, that's the ball game. 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, life-altering negative results would happen immediately. Drew's 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'm 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.
Ramit Sethi 2:55
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 Amanda, did you also participate in the application or was it just Drew?
Drew 3:23
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. But again, it is not her job. Amanda, what's your take on this?
Amanda 3:49
I wish I was more involved and 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 because I like the idea too. And then if someone else is signing off on it, I'm like, sure, because it wasn't coming from me because 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 do it. And so like Drew is the planner for vacations. And I'm always so thankful because 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? Mm-hmm. Kids? Yeah.
Ramit Sethi 4:41
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?

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