Reflecting on the Financial Plan

You said it, I listened. A lot of you have been asking for me to do more around single people and money It's time to do it. I am casting a new reality series about love and money. So if you are single and you live in LA, I want to talk to you Wt. com slash dating show. And if you've got friends who are single in LA, send them the link Wt. com slash dating showow. one hundred sixty seven thousand dollars. What do y'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 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's just not my thing. You have a crisis right now. You're spending more than you make every month And you only have thirteen thousand dollars in savings Yeah What do you think is going on 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 Howre 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 Today we are going to get into that very question that plagues millions of people I'm going to speak to Drew and Amanda 're married. They're in their mid thirties. they have a six year old daughter And they make a combined one hundred sixty seven thousand dollars 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 Wt. com slash money coaching Assets, nine hundred twenty five thousand dollars. Investments, four hundred fifty four thousand Savings thirteen thousand five hundred and sixty eight thousand Net worth eight hundred twenty four thousand dollars Now let's look at their fixed cost. eighty nine percent Right there, that's the ballgame That explains so much. invvestments at four percent, savings at two percent. that also is very explanatory. Guilt free spending at five percent, which re 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 alsoso the one who has the spending problem I hold resentment towards her that she never looks at our bank account 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 couple of months with our fixed costs Is that pretty accurate representation of why you are here today. Absolutely, it's a representation of why we're here today And u Amanda, did you also participate in the application or was it just Drew It was just true Oh. That's interestnteresting. 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 a 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? 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 Um I like the idea too And then if someone else is signing off on it, I'm like, sure becausecause 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 rue 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 you' been married for Thirteen years M 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 hesitancy of like, are you sure? Like this seems expensive or because I tend to get very comfortable. evenven 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 Six months where you were not on the same financial page Does something come to mind? Yeah, absolutely. I kind of like to look around the house to see what could use improvements. I had this idea that we needed more storage with our daughter and why don't we put in some cabinets in our living room We could have easily Boton, 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 a businessc call that where they would build the cabinets H. We had them come to our house, price it out I expected it to cost anywhere from two thousand to three thousand Amanda was probably shooting in the bar park of a thousand. ended up being about five thousand five hundred U 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's do it And she said Okay, sounds good. What's that mo? I'm married too. I didn't know that book 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 gott to give a little smile. That's a little difficult for me, but let me try. Hold on. I'm imagining U I want to buy u antique ceramic from Kyoto and it costs nine thousand five hundred dollars for a tiny thing in this sid of my hand and u 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. I learned something new on this podcast every day All right, Amanda, what was it like from your perspective? 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 person is coming over the vendor to give the quote, pick it up from there, Drew. Amanda, I think that these cabinets would look great might add an extra little value to the house if we ever decide to sell I think that we have a little bit of money from taxes that are coming our way. whyy don't we pull the trigger and have these put in Are you sure that we really need those? I mean, I think I've seen something like that in like Amazon or IkeEA 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 And we do have a little bit of cash on hand M. And we're not very handy So it would 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 gonna be like fifteen hundred, right? I was thinking more in the ballpark of three thousand Okay, let's pause right there. Great work really helpful to see. thank you. Would you say that was a pretty accurate as to how the conversation went. 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 level headach Okay, against s. The Snder And so it's like, oh, I did my part Sing 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 coming what I want. I think there's a really good description. I was thinking when you were talking, I was visualizing. I kind of saw it like. I'm getting pretty coming at you Hey, what about this? What about that? Try this? No we need it. It's going to raise their 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 b wolf either though. No, and I didn't mean it as like oh 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 King my wife and listening to her instincts. and kind of taking on that role where we are doing it more together then J 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 parents have a little bit of this dynamic. My dad usually is the the spender and kind of Gs what? It's what he wants as well. Amanda Yeah, 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 counter argument. 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. discuss B travel, big purchases What's different about us. versus dynamic that you have Nothing really comes to mind what differences, you in a loving relationship with your wife. You've made a conscious dec decision. to do it together Amanda, what do you see I'm wondering es Both having confidence In where you're at, where you stand, and it's like you don't have to convince the other. And're not we're not like waiting for the other person to give the green light Mm that Yes, you are totally right. 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 Iouldn't agree more. Yeah. we are suchuch a team like parenting with friendships, like we're always on the same page. So it's really just what's 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 because Money's hard to understand fully 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 Oh h Mhm 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 gonna say, you said okay too Like you didn't say no, you didn't stop me and 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, but the right person can pick up on the clue, etcetera, et cetera.. It's not written in black and white. It's very murky and gray by nature A And You've been married for a long time and you have a six year old daughter. and it seems like things are Fine So why is it a problem now as we are getting into our forties. We are getting closer to the age of retirement and it's becoming like, oh my goodness. if I keep spending like this arere we going to have enough to retire at a comfortable age and All Enjoy my wife with Amanda moving forward So I kind of think that's where where that came from Yeah. and I feel like too Maybe for the first time we realized the pattern Um, of like, oh, we get some money And then we have fun. and don't get me, I benefit from this. L I love it too, but it's just like can never just 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 basasically just allows both partners to this charade. Hey, I'm going kind of ask you what you think. You're gonna to kind of say, should we really do it? And then we're just going 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 talkk about prenus. 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. 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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 nine hundred twenty five thousand four hundred and thirty four. Investments, four hundred fifty four thousand five hundred eighty saavings, thirteen thousand fiveive hundred and sixty eight thousand, two hundred and eighty five for a total net worth of eight hundred twenty four thousand seven hundred and twenty nine dollars What do you think about those numbers? I am very and privilegeed that we've had jobs where our companies have matched our four hundred one K and we have taken advantage of that. So extremely happy with our total net worth The only thing that makes me a little Taking it back 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 G based on the limited knowledge that I have, 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. A Overall, I think Pretty good What do these numbers mean to both of you I feel like we worked really hard to get where we are getting jobs right out of college in the corporate world and kind of working working up the ladder and putting away Our money in our four hundred and one Ks, the only number that really jumps out to me is that savings being so so low Um think that would be a month's worth of fixed costs so that number really jumps out at me. What about you, Amanda? was it mean to you? I think the biggest piece is like, oh, we might be able to retire A reasonable age, that's kind of where my mind goes. I'm guessing you have not run the numbers carefully on your retirement, compounding, that kind of thing. Would that be fair to say I've looked at like a projection Okay. And seeing where it's headed, 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 I hate it I don't like it. I really I'll give you an example. So 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 know, Amanda. Tell me what do you do sometimes when you're in a group photo? And say like turn to the side Yeah. and the sorority squat The squat down, right M It infuriates me I never allow I always say no squatting Stand up tall. and Very, very commonly someone will say, Well what about the people behind me 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 I was with my team And we were taking a beautiful group photo And what do you know? people start to squat down stand up We have room for everybody. St up, take up space So Amanda, I'm gonna ask you on today's conversation. Tw Take up space. I think you might be a lot more knowledgeable than you're letting on. If that's if not, that's okay. tellell me. I never, never come down on anyone for not knowing something But if you know, like you're like, o, I happen to run a compound interest projection for both nominal and real returns for the next forty five years So y' allall have a net worth of eight hundred twenty four thousand dollars. You're in your early thirties, correct? Mid thirtiesid. Mid thirties. All right We're going to look at what it means But first we need to understand more about income and expenses. So this time I'm gonna to ask Amanda Amanda, can you read off the Bind gross monthly income number for your household Gross monthly income combined is thirteen thousand nine hundred and eleven for a household income, annual income of one hundred and sixty six thousand nine hundred and thirty two dollars. What do y'all think of that income proud of the work that we've put in and our careers and to be more proud of Amanda Who's the one who makes u eighty five twenty oneents per month. That's Drew. and fifty three ninety, is gross is Amanda And that's with the new business Yes. and I think the part that has been hard for us is we used to be more 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 Let's see here. I'm looking at the fixed cost number. Whoa, What's that number you see, Drew I just called eighty nine percent. eighty nine percent, That's the ballgame right there. That means that you are Not having much money afterwards. Yeah, exactly. It means you're spending more than you make every month because fixed cost is just one component of expenses. So we will drill down into fixed cost in a minute, but first let's look at investments four percent and noting that you are making a monthly contribution of one fif five hundred dollars a month total to your four hundred one K And then we go down to post tax investments And we have four percent or three hundred and fifty dollars. Let's go down to savings at two percent. that's two hundred bucks a month. And then finally, guilt free spending at five percent, but I don't believe that 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 thirteen thousand dollars in savings This is a real problem So what do you think is going on We have gotten comfortable with Going to events, going out to eat U I've also gotten comfortable with telling Amanda that good We don't need to cook dinner tonight and 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 It sounds like an excuse overall, but I do work from home twenty four seven, five days a week. where I feel like I want to go out after work and I'm the one that kind of pushes to going to events and goinging out to eat to feel some resemblance of being outgoing and talking to people and I created that issue on a monthly basis. 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 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 participating in the fininances, I agree. That's probably a problem Is there a vision of like your family fininances should be I money rules or policies phhilosophies in your family. do you have those? I'd say no. Okay. Do you have them for parenting? I would say yees. ye. ye. abolutely. Yeah. It's very common. Every parent of parents has some sort of philosophy, you know U 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 The problem here is that there's no philosoph It's just like, hey, what do I want? And when you live in America You are the downstream recipient of bllions of dollars worth of Marketing dollars being spent to get you to spend more money very little shot of Brute force your way against these companies unless you have a Philosophy What if each of you do for a living I'm a marriage and family therapist associate working towards Leicensure. Great. And Drew I'm a senior onboarding analyst for an insurance company. Amanda as a soon to be licensed therapist. Do you bring any of that skills set to bear when it comes to money and your relationship probablyrobably more so the relationship Hm not bring it to the money aspect think you could bring those skills when it comes to money? Yeah I bet you could. Why haven't you? if you had Guess why haven't you I think it's maybe a confidence peace Yeah. I feel way more confident with relationships. Money's just not my thing Money is just not my thing I like when people say that It's like, u, it's like, you never hear someone saying like, Food, just not my thing Oxygen just not my thing. Like money is what allows you to have that plant And that doorknob behind you, it's what allows your daughter have a roof 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 Cain concept, but when I think about money, I think about You'all taken 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. 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 withithout stress. So maybe there is something here about the way that we envision ourselves Drew, who says, I work from home and I need relief I need some semblance of being 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 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 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. I'm glad you are. I like being told You need to get good at this. 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 If we go forward in today's conversation with that in mind, would the two of you be okay with it Yeah. Yeah. I think it's needed G. 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 eighty nine percent. 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. So we're looking at your Rnt or mortgage. Is it a mortgage? It's a mortgage. Okay.. three thousand two hundred and thirty five dollars or twenty three percent of gross That's not bad. We like to see that number you know, at twenty eight percent or lower, even though in High cost of living areas, that's difficult. So the fact that you're at twenty three 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 eighty nine percent of a very high income? Your utilities are five hundred eighty, insurance four hundred, car payment is nine hundred fourteen dollars A on 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 six hundred bucks for a student loan Groceries eight hundred. That's retty reasonable Cothing and kids activities four hundred bucks a month And then we have this big chunk here, your phone which is thirty bucks, but you're fifteen percent miscellaneous including kids' birthday parties, Amazon purchases, and random items Mhm That's a lot. for eleven hundred and twenty dollars a month. And then finally, subscriptions for three hundred and twelve dollars a month. What do you notice about all these expenses? Besides the miscellaneous seem like they are actual fixed cost Can't go away? Yeah, maybe. someome of it can go away suubbscriptions at three hundred and twelve. We could knock that out right now Okay What else? What do you notice Amanda? I don't notothing is like jumping out at me. What about the cars? One car is a lease. You're leasing, what are you leasing Tesla mododel three Are you doing it because it was 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 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, I really could not care less. That has very little material effect That's asking a three dollar question. That's why if people want to have coffee, I get the coffee. I am extremely protective of fixed costs. becausecause once something becomes a fixed cost It is nearly impossible to get rid of Like there is no real easy out for these cars Thereory just isn't A house is the ultimate. It's very, very difficult to get out from. 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 costs below sixty percent You didn't do that? M don't And yeah. That is how most end up with really high fixed costs. Okay. Yeah. I'm not here to beat you up. I just want to explain How we gone here Absolutely. Makes sense. All right down to your guilt free spending What else are you spending money on? Mostly dining out. I would say eighty percent of that is dining out of then. Three times No, bump that up. I was gonna say six. Keep going. It's probably nine if I don't know, there's some magic number. If we factor in buying a coffee, that counts as eating out because sometimes you buy a coffee in a pastry. If we factor in lunch out or breakfast ocasionally, bl, blah, blah, blah, blah. Yeah Yeah I'm talking what maybe more times a week? What do you think? Yeah, six to eight times a week, abbsolutely. Yeah, that's a lot That's a lot. Vacation. We just got back from vacation two days ago. Oh, wow. Where'd you go? we went to Boston Okay. Let's talk about how you planned the financial part of that. We had a free place to stay for the weekend So We did have a little bit of extra money from Amanda's taxes as she puts away a certain amount and she had leftover So we were able to purchase 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 but the tickets were twelve hundred dollars And the money I put aside was one thousand dollars. So the bonus money gets gets spent pretty quickly. Would you say that happens regularly? It seems like it 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 Th go Snd 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 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 Kving Do you know any other way I think so because I think a lot of it comes down to like We worked really hard, like we deserve a treat or we deserve like something with this because this bonus is like You worked really hard all year. You work hard so you deserve a tree. Who taught you that I might have learned that from Drew becausecause 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 good authority, I would believe that they came from his yearly bonus that he probably I'm falling and 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 So she has a better understanding of money and savings. So when she's old enough, I will explain to her. patterns that me in a Me, mostly in Amanda Had and I think we can explain to her what we changed and the tools that we learned and how we Mo forward after this You talk to her about money today or no? We do a little bit. Yeah, we do. What do you tell her? Save as much as possible I think trying to Well, I need to put this CSP back up on screen. Let's just Yeah. 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 This is a big old thirteen thousand. thirteen thousand on a one hundred sixty six thousand nine hundred and thirty two dollars Inome, God, I love my job Mhhm Does she see mom ive with the money No. Yeah, that one home a little bit becausecause I don't want her to follow what I'm doing. Yeah And I don't want her to be wishy wasashy. Yes Yes, I love that you said that I want her confidence. which can only come from your confidence and the two of you being confident 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 eat mom and dad talalking 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 dad are going to go over here. We're going to talk about money for fifteen 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 now She should see that These are kind of things that let her know. and 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 Whenever I talk to parents on this show 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. What are you talking about? I spend on stuff I have money in my saving. I don't know, 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 iss 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 pererfectly calm 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 twenty 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 two seconds of searching. Now, if you want all that information out there Most people do not which is why I pay for and use a tool called Delete me. 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Cick the link in the description I want to understand a couple more things, the debt So we have five hundred sixty eight thousand dollars of debt. How much of that is the mortgage? How much of that is student debt Yeah. four seventy on the mortgage. sixty eight thousand on the student loan And then twenty eight thousand on the All that sounds reasonable to me I notice there's no childcare. How are you managing that elementary school public school system. Which amazing. Have you thought about what expenses might from now until later. I do see that you're putting money aside I believe it's a five twenty nine Yeah What about between now and college? Are there any big expenses that you're thinking? Me and Amanda did discuss private school, so that would be 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 Can we just fast forward like F years How would you handle it I think Amanda and I would pay for it too 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 gave me an amazing Childhood Nike police store shoes, vacations and So overall I am not used to hearing no Do you ever tell yourself no today Not often Not often How would your family? Do not tell them no There are no ns in your life What has the result been? the result been reaching out for help because couldouldn't do it on 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 Do you think about that? Yeah, it's something I think about often. 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, thousandousands of dollars. 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 We try to go out and go to events and materialistic items just to kind of feel good in the moment It feels like that's something that I should do is take them out even though putting money away is Prob showing more love to my family What do you think? Amanda It makes me feel like What is missing that we're just trying to still either stuff for food or I know we are very bad at being bored very bad. And so like the weekends, it's like We can't just sit here We got to go take Our daughter too golf or something like We got to get out of the house. That's quite interesting. What else We are both terrible cooks. Yeah the first say it. So what's the conclusion you go out to eat Okay, being with each other out and about. it gives us Joy to go out Drew you mentioned You grew up privileged. and I'm curious if you can takeake me back in time What do you remember your family saying about money donon't recall My parents ever talking about money in front of my sister and myself. I just remember asking for an item. And that answer was usually yes What you ask for Jordananss U. Almost every month, my parents were out would always get me the new Jordans. snowboards all that timeod It's like none of my hobbies. cheap. They were always expensive. What else do you remember your family saying about money They just didn't talk about it. We just Dad stuff We just went on vacation We just 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 How are they doing with money? My dad is sixty nine and he does still work like a couple days a week. I don't feel like they're maybe as well off as tears around the same age. Um, how do you know becausecause my dad always tells me to save Now because he doesn't want me to be in the same situation Your dad tells you to say which he didn't You tell your daughter to save, which you don't definitely pattern I would love to break here and now. I think that one of the joys One of the responsibilities that we get, especially if we grow up educated, 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, mayaybe it comes from a different culture, Maybe it's from a religion. Wh whatever There's something I want to do differently and it's going to be hard. 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 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 Amanda, would you be on board with changing that pattern that has happenedbsolutely Drew, anything else you want to highlight about how you were brought up? Yeah, I think the biggest thing that I've taken from them is the yearly vacations, which I don't know how expensive they were Back then, but I've been tending to do the same thing with Oh wow, we need a yearly vacation. Because what you work all your 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 or anything like that. It doesn't need to be ten thousand dollars 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 upbringing with my parents who immigrated from India, you know, we we grew up with a lot of Indian friends And a lot of the parents have 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. 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 abnormal to not take an annual vacation, but for millions of Americans that's totally normal. Now let's go to your upbringing Amanda take us back in time. What do you remember your family saying about money when you were a kid? Money was always Let's dress always talking about bills and how we're going to make it and Reinancing the house several times, needing grandma and grandpa to bail out Um So there was just a lot of unease I did get a lot of stuff and you know, I didn't feel like I was going without I did hear a lot of like that 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 because it was just kind of like you're just lying to me Um, My dad was a spender and really be allowed to have like a gbtit 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 But my grandparents Well off So it was kind of confusing Becauseuse 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 saave us, you know, like, oh we're gonna pay off all of our debts and we're going to start over And then so it kindind of mirrors a little bit. we don't like do that, but like if we get a chunk of money, it's like, okay, we're good now we can You do the right thing, but then you kind of fall back in the old pattern Yeah When you took me on that journey If you just notice how you're feeling right now, how do you feel describing your childob Uncomfortable Um Anxious Yeah. You feel that way today about money as well Yes. Yeah Are they still alive? Are they still together What's our financial status now? Great. not great Yeah, it was kind of like always a struggle and I think it's still a struggle. and it makes me sad. U, 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 was 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. But how do you think that that affects you, Amanda, and the two of you in your relationship with money. And I'm scared. And I approach it with that Um, and then also I didn't The luxuries Duded And so when I have now I have an opportunity to go on vacation, I'm like, I want to go a vacation because we didn't we did one vacation like my whole childhood And so to me, I'm like, oh, this is Possible I can do these things. and so I think there's that novelty. Do you ever say no to myself to your daughter I do. 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 prompt like have a It's like a sentence. It's not just no 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 Id probably say, o, no, we're not buying that today So there's maybe hope for hope You ever had like a hit on you. and their life trying to get you to go out on a date or whatever And then You know, like sometimes somebody will say like Oh, I'm not really looking for somebody right now. And the only thing that that guy hears is like, are you trying about me again? You telling about me Yeah. But like sometimes it actually just pays to just be like definitive. No No, I'm not interested It is about bothoth of you and your relationship with money and the ability actually close certain doors 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. No becausecause right now at the level you're at where you are spending more than you make every month and you are winowing 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 lines that say yes or no Like there's no question, no equivocation, no negotiation whatsoever And when you do that, which I'll help you do It flows. to your conversations. somethingomething as simple as shouldould 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. Mm The only people who can decide that 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 appropriate belief about money 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. doesnn't excuse it helps me understand a little bit Drew's parents did not do him any favors by not talking about money definitely did not do him any favors by giving him everything he asked for What happens when you go ten years, twenty years, thirty 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. er 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's doing. That might work if you're twelve years old. It does not work when you are a mother and a wife have to engage with money. you have to turn and walk straight into the fire and learn how money works can cause anxiety right now. That's okay It also is a source of your rich life. That is why I'm pushing her to stand up take up space to acknowledge. She actually knows some of this stuff.'s pretty impressive what she's doing but she needs to go into it full force not depend on her husband Money messages Do each of you bring from your upbringing to this relationship I think the money message is that brought to this relationship is You only live once, just do it And I mean, I've he like my grandfather would say it's only money guess that is easy to say when you are a grandpa and you're retired and you have money to spend. You can't take that when you're thirty five, it's only money. Really good insight. Amanda that money is scary 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 get everything you want And that's not life No I think you actually get whatever you want And you don't look at the numbers at all You also don't have a vision 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. Aion. Aion. She's got to see it And she's even got to see mom and dad not getting everything they want. but More importantly haaving a powerful vision that they are getting 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 wouldd 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 Being with you. U no matter what evenven though I know we just talked about vacations, but if we could limit those And me and you or together on vacation, providing our daughter u the life that I know that we would love for her, which is to grow up as a confident woman. who doesn't necessarily depend on money would be amazing My rich life also includes being able to do 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 to eat with you Thank you very much. Amanda, what's your rich life For me 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, o, 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 without it wrecking us How do you both feel? expxpressing what your rich life is for the first time does feel a little weird. like expressing what you want in life, 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 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 What I noticed is without this type of discussion. What is our rich life? What's our philosophy on kids activities or eating out, etcer. Without any of that, you simply look down at the day to day. and the day to day is stressful and busy and often filled with materialistic escapes that are not even part of your rich life Somebody's sitting here buying five hundred dollars worth of freaking crackers. I go, Are crackers 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 lie I just eat them because 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 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 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 that 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? Haven't heard the word golf before, haaven't heard the word concerts, haaven't heard any of these words. What is this? eighty nine percent 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. That's it. It's over. What I really want to get to is I like your rich live vision. I think it's a good first step But when I am hearing somebody describe in Div personersal rich life vision Guts. like a knife It is sharp Sometimes it's a little abras 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 wna say, we are going to take our daughter to art classes Three times a month Great But right now, what I'm hearing really general 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 know? Definitely activities for our daughter S. Definitely on there to get my nails done. He's absolutely correct that I do do not need to do golf that much, it is very expensive hobby, but for my rich life is with working from home five days a week. I would like to at least go out once a week with You and our daughter is a family. I like that I want to go out once a week with the two of you. to do some sort of activity we can make that work. So then Can I extrapolate that vacations are not part of your rich life feeling I feel like the are because The experience with our daughter Oh wow Okay, then if that's the case, u What if I were to say, I feel like You have to double your income Could you put a hold on vacations until you do that Yes. I think that it makes complete sense. Yeah. 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 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 actually I find for high achievers is very, very motivational And I actually think that the two of you can can do that. I can 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 whichich is incredible. I still set financial milestones for myself It motivates me. And then when it happens feels like incredible because I know how many years of work I had to put to get that All right, so we have a rich li 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. communication I M 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 cabin. So We will, we will set up twoo 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 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 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 you going to do that You've never done it in your entire life I don't know how people just turn around, like turn that switch I need to do a better job of investigating tools to turn off that switch. I don't like the word tools. Would 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 Eth, 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 way that you are, although ue candidly I don't think're that knowledgeable by money eith You get eighty nine percent fixed costs. You're not doing a great job In your relationship, you are, quote, the knowledgeable person in charge of money And you basically, as you put it, can maneuver to get a mana to agree with whatever you want. How are you going to change that haveave a collaborative conversation with your spouse. U and come to an agreement I need to learn to hear the word no Um And Let that sink in I need to say no to myself and I Overall, I just needed do a better job and this self reflection has Really helped. That's good The most important thing you just said right now was You need to say no to yourself The best way 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 I was asked to go to a basketball game that would cost a couple hundred dollars for tickets and I will say no to that I will not be going. How are you going to say that Should we practice M happy to admire 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 Would you like to go theseese tickets are great and they're pretty cheap how cheap are they U They're two hundred bucks. Wh are the seats? Five B Those are really good seats. I'll have to We'll off have to take a look, but u So that's how it would usually go. I would usually say, okay, sounds good But for this conversation Sorry, R me. I don't have the funds to do that at the moment. If you would like to come over and watch the game, I'd be more than happy to have you here Noow Okay, first of all, round of applause. That was really good I love That was great. And I love the the offer Hey, come on over anyway. likeike we can do it here. I thought that was really good Would you actually say that I can text them right now and say no Really? Okay, do it wherear. Tech. Let's take a second. I don't mind. Take a second. That's fine I like this. I can you. Take your time.d I'm very proud. What do you see? Amanda, as Drew is typing, tellell us what you're seeing? What are you noticing? He said no to himself And because I know we talked about it earlier and I was like Oh boy. Hold on. Was that what you said? Oh boy. H. Okay, we're gonna get to you in a minute, okay H't tat on that Yeah fun. way. Did you say they have I did it Okay, Okay hold it up tight to the camera What are we looking at U Can you read it out loud U I can't make it to the playoff game, sorry, Omes We should still try and watch it together Nice. Round of applause. Really good. Okaykay, great, great great How'd 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 two hundred dollars H. that guilt that sticks with you after you make a purchase Nice That's the first time I've heard you mention that guilt. 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 feel awesome I want you to feel like that. The only way your daughter can learn healthy relelationships 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 gott 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 it 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 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 in a healthy way. and your kids, your loved ones, they pick up on that Okay, thank you, Drew. That was awesome Amanda Mhm to you Same question I'm going change saying no And being confident in like, no, that's not part of our plan or that doesn't align with our Philosophy being able to I guess say why I'm saying no without like getting in the nitty gritty, but more of like, hey, we're getting off course The way you build confidence is competence M 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. Start with my book Men 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 mrses No. That's not your role. That's actually not fair to you Neither of you are the no person because if you are the no person, then the other person iss 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 reevaluate every six months sixix to twelve Yeah We are sticking with our plan and we're going to gently remind one another if one of us goes off plan 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 You're 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? Craig, St do it Are you surprised that They have never about what their rich life is I'm not Most couples do not talk about Philosophy 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 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 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 three 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 forty five or sixty, 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 ten out of ten magical life And now can we start Our money. to be able to get there It is an incredibly powerful, counterint intuitive way to live It also gets you a rich life like nobody else lookingooking out at the CSP Y Fixed costs are eighty nine almost ninety percent Your job is to get this number down to sixty percent Your job is to also changed 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. backack 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 bigig bad wolf, but you actually need to give Amanda the space to rise up and take some space. Amanda, go ahead. U suubbscriptions G. What's the current number here? three hundred and twelve. What do you want to take it to? Definitely can cancel Netflix. That one's. Okay, fifteen bucks a month I know. Can I point something out? So you're doing what everybody does the first time they do this jump right into the weeds. And they try to fill and It's rational. That's what I would do myself But I'm gonna ask you thinkink 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 moment. Yes, we are Building savings. That's good. That's a great philosophy. every month and what else What would you say is important to you for spending aligns Yeah. what specific things do you want to spend money on O daughter's 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, etcetera. You wantan to learn how Yes What What was that the way you said it just tells me everything I need to know Yes, I want to learn how to cook. lookook at my head Yeah, I want to that's no If we're not eating out That's something that's not gonna to be part of that 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 You gotta do this. What's our other choice? Yes Decisive. Okaykay Now you've told me what's important to spend and what's not. 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 Fix cost? what do you want to do subscriptions What do you w to take it to? half. Half of thatal. So from three hundred twelve to let's just say one hundred sixty. Okay? Look at the number, what changed here on the fixed cost? It went down one. It went down from eighty nine percent to eighty eight percent. 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. And I think This is probably points to the issue is I don't know what falls in there. Okay, actuallyually it's Drew's turn anyway, so why' we kick it over to Drew Perfect I know Amanda had talked about healthier meals with groceries. I do feel like Chat GTP has the ability to make us six days a week meal plan. So I think that we would have the ability to groceries from E hundred to five hundred to six hundred. 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 am going to cut the groceries. Can I just point out, y'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 twenty five percent of your vegetables are gonna to go rotten for the first month. It's just gonna 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 gonna set you up with a plan where I expect you to be perfect, especially the first time you're doing this So let me suggest, I'm going to take the groceries down 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 eight hundred to seven hundred fifty. That's it, okay How often you're eating out like Let's just say nine times a week. okay? seven to nine, whatever How often you going gonna 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 Oh, I lik that last line, Drew. goodood job. Yeah Okay, so what's the number we're putting down for eating out? How much per week Uh, if we're only going once a week F forty, forty five dollars for going out. Amanda, where are you, onest? Speak up I think we would enjoy it and it's a break too from having to make stuff at home U So I think One a week at the fififty, fifty. Yeah. So fifty bucks a week on eating out. That's two twenty five dollars meals. I wish I could see the face of all the immigrants listening to this they'. People who are especially the people in other countries And they're just like, what the What is this couple talking about right now? at fifty dollars? Meanwhile I'm remembering like when we ate out I can't believe that You Six of us in my family, right? We go out, we get two cokes, two And then we like share them That I know, I'm sorry to all the pizza places that we defrauded. That was not good That's what we did. We only ate out with a coupon and we would under order And like We're not getting full Like that's his 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? The kids get their own freakaking adult size meal. and I'm looking at them like That could feed four kids Yeah. I'm trying to stretch the possibility the imagination of what is possible for you If you want to start at fifty bucks, fine In her mind But I want you to start thinking there are other ways. Let's like look at other people's dishes. Where are they eating? Let's talk to our friends. Where they go? Do they not go? How do they save money? Okay. greatreat right two hundred bucks stom up, put that up on screen and show you because guess what? That needs to go down here Yuilt free spending. that's where it goes So that's included right there. We're not going to change anything on your fixed costs. Okaykay. All right, so we're going back up here. Can somebody just tackle the big expense here, please? Yeah Yeah. one thousand one hundred twenty dollars for kids birthday parties, Amazon purchases and random items? No, fix this U I would say six hundred fifty. no I'll show you why. Becauseuse watch. I'm dropping it from one thousand one hundred and twenty dollars to six hundred and fifty dollars. Look at this number up here, your fix cost number, ready What the number dropped to eighty two percent. Not enough at all. How are you gonna to spend six hundred and fifty dollars a month on random Kids Amazon purchases, No, we're not doing that You allall can't afford it. You realize you're going broke every month, right Yeah 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 You 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 one hundred. Honestly, it's gonna 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. No It's not happening Guys, I'm gonna 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 Yeah. All right, I'm taking this to one hundred, look at the fixed cost number Wow Nice. That dropped to seventy six percent. We're going in the right direction. I really like this. Okay. What else we got? Clothes and kids activities four hundred bucks a month Yeah that needs to be cut in half class that she does it with after school is, I would say it was like two hundred. twenty That's her activity Because if so great, two twenty a month I'm like, do we pay for anything else She's in soccer but we were it was like sixixty bucks but it's like one time. but it's like she keeps doing stuff. So Um, cheer is coming up Let's call it two hundred fifty. Yes I think that because things will fall off and things get yeah Let's call two hundred fifty. watchatch the number. We're down to seventy five percent Subbscriptions, de I'm just going to start making changes because you guys are not. one sixty 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 Apple subscription at forty five dollars. All right, watchatch the number. I'm changing it from one hundred sixty to fifty. Fixed cost down to seventy three percent, notot bad We're Chugging along now. Do you have investments Uh two hundred dollars a month in addition to your four hundred one K. and then you have a five hundred twenty nine at one hundred fifty a month Maybe we need to hold off a little bit on the five twenty nine because this is our future currently. I know we want the best for our daughter but we need to kind of take care of ourselves at the moment and I think if we are able to kind of that for the time being I'd could help out So let's take a look We're going to fiveive twenty nine Totally agree Y daughter needs you to be financially stable more than she needs money twenty 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 hand me downs? We keep 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, star. What do you want to do for this number? It's two hundred fifty right now. probablyroably bump it to three hundred. Okay. hundred 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 both so mindful about her spending spending on her, but not for yourselves. You're like Yeah, she's fine. She's se. She didnn't wear those. we need to go Gig golf. We need it All right Speaking of that, where is the golf expense in here? It was in the miscellaneous. It got wiped out It's really quite peculiar that there's no word stayinglf here. Anybody notice that It was I took what was there.. Yeah, sure All right, by. Oh, and then I think that's a good question is are my nails in miscellaneous? 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 Y'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 overfus on feelings and your feelings have actually led you astray. Your feelings are why the 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 makeake the math imary , Youre going to keep moving A hundred dollars a month for vacations Those need to be wiped out. Amanda, if you feel the same way and transferred to emergency or long term Svings. You good? Yeah Aman, are you sure Yes, because we agreed that the vacation should wait Mhm So we're at two hundred a month, which is two percent, which is low. Oh. Well, guess what We have margin to play with becausecause look at your guilt free spell.ee all those cuts you made at the bot at the top they flow to the bottom automatically. so you have y two percent play with That's two thousand fifty two dollars a month. Why don't you say we put that money to work? Yeah Where do you want to put that money? Definitely the emergency fund. How much That's four hundred. If we put four hundred more here, okay, watch what happens to the numbers So six hundred bucks This turns into six percent. This number, I typically like to see it at five to ten percent. 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 M four hundred one K, 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 U yeah, you have a high income and you've had it for a while and you don't have great savings. And you have veryer high fixed cost. if something goes wrong For one of you, you're in trouble So that is why I'm like, guess her sixix percent, you're kind of like near the bottom. I'd like to see that number at like teen, fifteen percent. So let me let me actually try to like pump that number up a bit. Watch this. I'm going to go to eight hundred We're now at nine percent. And look how much you still have down here. fififteen percent guilt free spending. 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 more. I'm just gonna to go a little faster. twelve hundred do. Yeah thirteen percent savings That's one thousand two hundred dollars a month The Guilfree spending is at one thousand fifty two, 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 spepend less. every month and build up savings One last thing I wantna talk about which is investments Have you run a compound interest calculation? Yes, we have. What do you find at the end How much you going to have? I think mine was like onene point two five million. And for you, Drew one point four, one point four. Okay. Well, we calculated if you continue on the current path you're on, no raises, which I suspect you will Both get that When Andrew is sixty five years old, that's twenty nine years from now, you will have not million like the two of you said combine no. M five point five eight million dollars That's a safe withdrawal. four percent of two hundred twenty three thousand dollars per year That's a lot of money. Yeah. Does that surprise you? Yeah. 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 months investment Yeah I think I looked at one paycheck and I grabbed since I paid by weekly, I think I accidentally grabbed Oh only oneaychck. 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 two million dollars two point five million dollars wrong. Yeah. Like I'm looking at my Charles Schwab with what what's in there because nothing's getting added to that because I'm not at job anym U it says by the age of so by the year twenty sixty. be one point nine One point nine, almost two million dollars Mhm That's pretty impressive. That's good And remember, that's if you don't add anything else Yeah. You're goodhead of course, you're going to 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 four one K this whole time. and company was matching it And so I was worried that like, o Ohh my gosh, I don't have that anymore. when we look at the like projection 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?. With that said, we're still at seventy four percent Yeah.'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 eleven percent, 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 You're Guilt free spending number will probably have to be something in the zone of like percent And what that really means is there are no more ad hoc last minute decisions about spending in. 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 going to 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 C. Savings, you have putut more towards it, twelve hundred bucks a month, which I think is a good start Investments, you're at your Roth IRA for two hundred do. personersonally, that's twenty thousand four hundred dollars a year I might just redirect that to savings, boost that savings up. And then finally, if we look at your four hundred one K, I just want to point this out. An option you should calculate is Do you need to be putting fourteen hundred dollars a month into a four hundred one K. I'm not so sure That's a lot. Yeah. That's a lot, especially if there's, you know, an additional match and Bah, blah, blah. off course That's a Best place to make a lot of money twenty thirty 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'd probably take some of that money and I would redirect it to savings and quickly aggressively as possible build up that savings account to at least six months of fixed costs Do you know how much that is forty two thousand dollars. So you're partially there. But you can see that even an extra one hundred dollars a month twelve hundred dollars a year So link. When you put it in that perspective, like finding three hundred bucks a month actually really adds up It does. Where do you think that the biggest opportunity that this plan falls apart might be. biggest opportunity would be having a rough day at work and You're like, we're going out We deserve this. I was gonna to say stress. Yeah. Good. I agree What's the antidote to that? I think it's me and you sitting in backyard with Uh, with a drink and watching our daughter play and Um You know, instead of an eight dollar, twelve dollars drink at a place, it's You know, one that we got at the grocery store. That's two dollars, 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 home 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 tellilling us. . C' cool for the phase of life that we're in. sameame for you What can each of you commit to in terms of your rich life vision, to make sure that your plan stays on track. Amanda, wrriting 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.ice. And so yeah, I think like We're saying no because Love it. Beautiful. Get your daughter involved too. Yeah. tellell her. Yeah., Hey, this is what we're doing. We want to build a person. We need your help getet her involved in the way that is appropriate for her Drew, what about for you? Yeah I think making that commitment to T talkalk as a family. Listen. write out those goals. stick to it be each other's partners throughout this whole process Um, Leon one one another Um I think as long as I'm with Amanda and my daughter Knowing what we talked about today I think our rich life will grow and we'll have that opportunity. 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 A level results. pllus 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 developed 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 Double So that's going to shorten the time from six years to fill it up to Tw years. If the salary increases by this much, we're going to increase our guilt free spending by an extra one hundred and fifty dollars a month. That's going allow us to go out to a nice meal with drinks. And we are going to start putting aside, you know hundred bucks a month for a vacation 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 off the next extra money we get fifty percent iss going to go to savings twenty percent, et cetera, et cetera. And that's how you always have a place Okay surprised you in today's conversation. I think what surprised me the most was how dire our situation was Um didn't know that we were out on the Titanic with like without a floatie or a door in secondary was that retirement number that you had thrown out. Nice. Amanda I definitely agree with like Crisis Um, because I think we've always just kind of told ourselves that We're doing pretty good I you know? and U I think too how we were bringing each other into the pattern and using each other. I think that was a big piece for me and I like the new I it This is what we really want to do. So there's other stuff it' What are we really gettinget out of it. Yes Yes A rich life is unique personersonal 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. on our vision And how are you both feeling now as opposed to when we started talking Amanda. Fe hopeful and actually excited to actually to ion And be like, actually this isn't 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 truth that we were told today. 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. and continue to Strive for our rich life that Yeah. And to have our daughter actually see us save, not just say we're saving. Yes. Yeah. That is going to change everything. I think that Amanda and Andrew 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 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 get something even bigger and more meaningful. And I think for Amanda, Her biggest challenge will be becoming a true partner stpping up into her own knowledge and power Beoming 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. 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. withithin twenty four hours, you will have your vision on the way being developed. You can join at Wt. com slash money coaching. And now let's take a look at their follow ups. Buddy So one of the biggest surprises from our conversation was realizing that we were stuck in a patternom we generally thought was the right thing to do Hearing that we were actually in disparate need of a larger emergency fund was really eye opening It shifted the way we see our dating routes 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 restricted It gives us a sense of direction and something that can kind of keep calling us back and see like, oh, if we follow this philosophy or tonight, we're going to actually be able to do the things that are important to us that give us our rge lights. So we've already made several changes, We've cancellled 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 And we're starting at daily meeting twice a month to make sure we stay aligned and keep checking in on goals are progress. So overall