“We spend 98% of what we make & refuse to change”

Рет қаралды 306,901

Күн бұрын

Ramit Sethi of I Will Teach You To Be Rich talks to Kristine, 32 and Thomas, 35. They’re raising three children in the Midwest. They love their jobs, are happy with their incomes, and just upgraded to a third, much larger, home. Everything is good-except that they’re going broke. With astronomical fixed costs, something’s got to give.
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Can’t-miss moments:
00:00:00 - 1: Opening
00:02:07 - 2: Kristine explains her stressful daily money routine
00:09:09 - 3: Thomas doesn't want to talk about money. Ever.
00:13:55 - 4: Ramit notices some obvious clues
00:19:54 - 5: Ramit breaks down their numbers
00:21:19 - 6: They're spending 98% of what they make
00:27:49 - 7: What to look out for when buying a car
00:33:11 - 8: What money lessons did they learn growing up?
00:37:53 - 9: Ramit points out the elephant in the room
00:44:59 - 10: Should they give up the Jeep?
00:49:58 - 11: Ramit tells them, "I would be scared"
00:51:39 - 12: Ramit just discovered they're being robbed
00:56:15 - 13: The wrong way to look at "managing money"
01:03:32 - 14: How much will they have at retirement if they keep going on like this?
01:10:46 - 15: How will they get their fixed costs down?
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If you and your partner have a money issue and you want my help, I occasionally select a couple to work with, free of charge. Apply for my help here: forms.gle/pjYMaLeThJM3z9uN6
Produced by Crate Media.

Пікірлер: 690

@ramitsethi Жыл бұрын

0:00 Please remember: These are real people who had the courage to come on my podcast and ask for help. Would you be willing to come on this podcast and share every detail of your financial life? Feel free to leave comments based on what you think, but remember that we are here to help in a supportive way, not to demean and criticize.

@daliacarrillo8588 Жыл бұрын

I would be willing what do I have to do?

@sandyfisbeck9488 Жыл бұрын

Check into Traveli ng nurses

@isa-9271 Жыл бұрын

⅔

@ludwigvonsowell5347 9 ай бұрын

How does one get on the show?

@shandadee4077 9 ай бұрын

This is very sad and sickening

@stregalilith Жыл бұрын

Ramit is so wonderful and gentle in his approach, no judgment , no shaming. People feel enough shame they don’t need more but many financial counselors hurt the people they say their trying to help.

@bobbyheath2474 Жыл бұрын

The truth hurts sometimes and most of the times that sting will be the only thing they remember

@DonBrownII Жыл бұрын

@@bobbyheath2474 exactly. most ppl won't change without some sort of sting. They haven't changed this entire time because there hasn't been any sting. Doesn't mean that you automatically be rude, but there has to be some sort of wakeup call.

@deirdrekiely6187 11 ай бұрын

* *they're* trying to help

@feliciawilliams5720 8 ай бұрын

Agreed he is gentle but effective

@Hewrin88 5 ай бұрын

Gently stern!

@jerrystauffer2351 5 ай бұрын

They're quoting Dave Ramsey but Dave would say they're house poor. Dave would not approve of anything they've done.

@taylamayde 3 ай бұрын

Exactly that car note, credit card, more than 25 % mortgage is just a few no where near the plan and he say he went to financial peace but failed

@lowlowseesee 2 ай бұрын

just like most folks. they can repeat phrases that they have misinterpreted or actually understood but was repurposed. like watching couples run the numbers but they only run them to justify a purchase instead of doing it with diligence

@angelwings1 Ай бұрын

He’d also tell them to pay off their credit card TODAY with their savings.

@lindsay3995 5 ай бұрын

I soooo appreciate Ramit being patient and kind with people, but sometimes I just want to hear, “Please face reality here. Grow up, and move to a smaller home.” You decided to have three children instead of two, so if you want them each to have their own space, you might need to have a foldout couch instead of an entire spare guest room. Or just give one of them a bunk and have two of them share when family visit a small sacrifice to possibly fix every problem you have here.

@lesliepressley8452 Жыл бұрын

He's giving "I work and bring home the money, what more do you want from me?!?" And he seems to have a hard time Adulting.😢

@Arggggggggg 5 ай бұрын

Well, the woman is kind of a shitty wife.All she cares about is perceived status and keeping up with what all of her friends have.

@IMBLESSED-oe6dl 2 ай бұрын

How abt not make kids u cannot afford

@bilaladoui5866 10 ай бұрын

I am 33 years old and I moved from Algeria to Europe with only 100 euros in my pocket. Currently, I work as a developer and I am fighting to build a good life for myself. I want to express my gratitude to Ramit for his advice because it has had a big impact on my life.

@haha-cm6pg 9 ай бұрын

Good for you frero.

@antman7673 3 ай бұрын

Judging from your profile picture, it is Estonia. awesome. I know as a digitalisation forerunner in Europe. From an exchange program, I still have a small Estonia flag, that an Estonian girl gifted to me. It is placed on my desk lamp.

@bilaladoui5866 17 күн бұрын

@@antman7673 Exactly Tallinn, it's a small country but provides many opportunities for digital nomad and online businesses owners, maybe one day I will be one of them 🤔

@miriamm809 Жыл бұрын

I loved this episode but found that there was a cognitive dissonance between what the couple claimed were the "important things" and where their money decisions were leading them. For example, she values the kids having the opportunity to do extra curriculars but one of the first things out the budget was Gymnastics and Swimming (?) lessons. They both claim to love their children as a #1 but would not change the house or their jobs for them. A sad (but needed) example of when we feel we "deserve" the things we own, but in reality the things we own own us. Hoping to see a (good) update on them.

@JenniferBrooks-eq3rn 10 ай бұрын

We used to be in this position with three kids under five. With three , they will eventually have to make choices about their extra activities based on time as well. It helps to have them all doing the same things. And develop friendships and community around those things. From what I’ve seen, some of the most expensive activities are gymnastics, dance, and cheerleading. Swim can be to a certain extent, but only as they get more advanced competitively. Our three have been swimming since toddlers. Competitively since a young age as well. It’s a safe sport and a life skill that builds endurance and that’s why we like it for our kids. When they were preschool age they did classes through the parks department learning about nature and biology. It was basically free. Once a month. Plus free literacy classes for little children at the library. All of that was plenty for them. Our public elementary offers chess club, av club, choir, orchestra and a robotics team all for free. I just donate snacks and buy a tshirt. We’ve taken advantage of all of this. They have very busy schedules, make excellent grades, and we pay for one or two activities for each of them. But they’re each in three or more activities.It’s doable. If you’re looking for an inexpensive sport, I suggest basketball or soccer, but you don’t need special shoes to start basketball, so that’s probably the cheapest.

@cletusthemysterious 8 ай бұрын

Because they valued the house over everything else

@feliciawilliams5720 8 ай бұрын

@@cletusthemysteriousfancy house 🙄

@tianah203 3 ай бұрын

This house is about them,not the girls

@sherei9530 2 күн бұрын

Excellent response@@JenniferBrooks-eq3rn

@CherylWickham 5 ай бұрын

He did a good job of trying to get them to see they need to sell their house without screaming it at them. Their largest fixed expenses is their house, which they clearly can't afford. But they don't seem to want to accept that. They are the perfect example of house rich, cash poor.

@o0usf0o 3 ай бұрын

They’re one job loss away from foreclosure

@deepdive1338 2 ай бұрын

@@o0usf0o yeah pretty much anything will get them over. A new child, a medical emergency, less hours at work, car emergency, etc.

@pitpride1220 8 ай бұрын

His parents were exactly like mine financially. I grew up in the Midwest too. We took vacations every year and went camping pretty often. They were very frugal. My dad could fix anything, they bought their cars cash, kept them mint. Then drove them for 10-12 years. They sent me to private school. They had a financial planner as well. We rarely went out to eat unless it was on vacation. Money was a secret in my house. They wouldn't tell me anything. My father died in '19. Helping my mother was the first time I got a look at their finances. I'm 47 now. I don't think my parents ever made 100k together. Maybe the last few years. But they were very good at keeping things like new so they never really had to buy large things. My mom didn't get new furniture for the house or new kitchen counters until I was 35. My father's ability to build, fix or remodel anything was also of great use.

@Aquaria2291 4 ай бұрын

This is why it's such a crime that schools stopped teaching functional skills like home economics and woodshop. Those practical skills are so essential to living well but frugally and large swaths of the population no longer have them.

@lowlowseesee 2 ай бұрын

that planner got them on AUM fees probably

@jeniffervarela6066 8 ай бұрын

This was absolutely agonizing, but Ramit you're a gem for how you handled it.

@michelledemarsh 4 ай бұрын

Hubby is frustrating me. Grow up, we need to take care of business brah

@hanibee22 7 ай бұрын

The thought of frugal, minimalist and downsizing makes me giddy and excited, and I love it! 🤭

@acissej821 Жыл бұрын

It fascinating to watch then reduce all their quality of life type expenses to keep the house! Also wild to me they would prioritize direct TV over their kids activities

@AmmyC88 Жыл бұрын

The kids are little right now those events will matter later. My kids don’t remember that they did tap in karate when they were that young. Also he could get sling or KZfaq tv for a lot less money. she said that the five-year-old goes to private school that’s just dumb. This man has the patience of a saint.

@anchalavasthi4881 Жыл бұрын

Omg, Ramit has been sooo patient 😢 I was getting mad for him. This couple doesn’t want to wake up and smell the coffee, unfortunately. 🤷‍♀️

@feliciawilliams5720 8 ай бұрын

It’s hard I guess…when you have a vision of what you think 🤔 it should look like 🥲🤷🏾‍♀️

@lowlowseesee 5 ай бұрын

Childhood trauma is tough

@tyerrascott6596 2 ай бұрын

They do not want to let go of that house

@steffimendoza3470 Жыл бұрын

Towards the end of the session, they mention having done Dave Ramsey steps and it didn’t work. The reason it didn’t work was because they weren’t willing to make changes to their money behaviors and lifestyle, as evidenced by this session. It really is sad to see that people get stuck in their ways and can’t even see it. I hope they get to the point of being so sick and tired that they finally make the changes they need to make to actually make progress in their finances.

@user-cr1iz8fw6h 6 ай бұрын

They really don’t need and can’t afford that house. Apart from the mortgage and maintenance, he said “yeah our utilities are really high”.. well of course it is! It’s a 3000 sq ft house!

@jerrystauffer2351 5 ай бұрын

Agree. Dave would tell them to sell the house and sell the Jeep

@mmp495 Жыл бұрын

It’s so profound how psychology and finances go hand in hand. How we perceive money and our experiences growing up around it. Great insights and information here.

@aliabdaal 7 ай бұрын

Man I’m thinking too small with my finances, loved this episode ❤❤

@c.i.j.5457 7 ай бұрын

Just finished reading your book the day before yesterday , decided to take action and read Ramits book, finished last night and set up a budget. Now at a coffee break watching this video and was about to comment when I saw your comment 🤯 Guess I am now on the path of feel good productive and feel good finances 🥳 Thanks Ali!!

@pdxwino 5 ай бұрын

It’s telling that after all was said and done, her first take away was that they need to prioritize their investments. Strange that they can’t see they have NOTHING to invest!! Blind to the fact they live in a house they can’t afford. Another couple with children that can’t see they’re broke and a couple paychecks away from being bankrupt.

@aaront936 Жыл бұрын

The biggest problem is even if they downsize their house their mortgage payment will probably stay the same with the current interest rates.

@jelemil Жыл бұрын

Thats a good point actually

@aaront936 Жыл бұрын

@Katie H not to mention rentals in the Midwest are absolute trash.

@sylviebedard4648 Жыл бұрын

And there are all the phantom costs associated with buying a house and selling the current one

@rileygiordano2380 Жыл бұрын

Maybe. It also depends on how much equity they have currently, and difference in property taxes. Rates do make the math more difficult for them, though.

@vgmijpn8ball Жыл бұрын

Some mortgages let you transfer them.

@everybooking2691 Жыл бұрын

Call a spade a spade... This couple is naive and a bit stubborn. They have a problem yet insistent on keeping some of the problems. Makes no sense.

@HRD92 Жыл бұрын

Loved this episode. Especially appreciated the restraint Ramit showed to not jump into his opinion and waiting on the couple to make the realizations themselves. As a young couple listening in, my wife and I can relate with the choices this couple made and the mindset they might have had while justifying them. Thank you to both of them for sharing their story with us ❤️

@nhraijordan6459 7 ай бұрын

AMEN, that is such a hard skill to master. Ramit is EXCELLENT at it and active listening while warm demanding. Excellent work.

@firefalcoln 6 ай бұрын

Ramit was so restrained in not calling out their lifestyle creep quickly and blatantly. That so much of their problem. 3 kids is a lot. But their income is a lot as well. Especially for the vast majority of the midwest. It’s the giant home, expensive private schooling, new car and probably some other expenses that are responsible for them having 98% of their money going to fixed costs. They could probably cutback on everything but the home and make it work. 25% of income going to the home and utility costs is a bargain for a lot of places. Not that 3,200 square feet isn’t enormous and probably expensive to maintain. The home honestly might not be a good thing to sell now for a replacement because they’d very likely be trading a good interest rate for an awful one. They could sell and rent for a while, cut back a bunch on everything else, or somehow make a lot more money without spending more of that increased income. And that last option seems like the least likely. Especially given that they said that they like their current jobs.

@christinejunk8184 4 ай бұрын

This was a fantastic episode. My husband overheard bits and pieces of it and like Thomas, he hates to talk about finances, and it really opened him up to the point where he was able to sit down with me together to identify what our fixed cost percentages are overall. We were pleasantly surprised as we honestly have never calculated it in percentages format. I have always been into frugality in terms of spending and not always looking at the big picture in that manner which is crazy to realize. Fortunately, we are not living beyond our means which this exercise demonstrated well. I too was guilty of getting suckered into an RESP fund for my son when he was a baby that involved rather high percentage in advisor fees overall so that really struck a chord for me as one of my big financial mistakes. The conversation we had as a couple left us feeling like we could more easily talk about finances together. Thank you Kristine and Thomas for your openness and transparency.

@barborabratova4346 Жыл бұрын

It would have been interesting to see the calculation of current mortgage vs a mortgage for a smaller house vs rent in that area and how that would impact the fixed costs.

@emailsusan Жыл бұрын

And length of mortgage

@staceyswanson3918 Жыл бұрын

I was thinking they could possibly rent out the house and go rent something smaller, plus put more towards the mortgage as they would charge more in rent. Then move back in 5 years

@Stevia_Dunn 8 ай бұрын

And taxes. The nicer houses in the nicer areas come with that hidden cost that no one seems to account for. A decent house in a lower tax area can save a lot of money year by year.

@Stevia_Dunn 8 ай бұрын

I just heard them mention too that they had their house built. That's like driving a brand new car off the lot. They still need to build fences, landscaping, and all the extra things that an older home comes with for less money.

@taylamayde 3 ай бұрын

⁠and what not have money for the repairs have her even more stressed about cover expenses as they barely make more over the cost of the mortgage I don't think it be worth the anxiosity for her

@eileenwatt8283 Жыл бұрын

People who grew up in small houses always wants a big house. If only they knew how high maintenance a big house is. The house takes your money, time and privacy if you hire people to clean it. Those who grew up in big houses dreams of a smaller house and often purchase smaller home.

@emclaire18 3 ай бұрын

Literalllly! Grew up in a 4000+ sq ft house and now in a 700 sq ft apartment and it’s a dream. So cozy, easy to clean, I know where everything is. Blessed

@o0usf0o 3 ай бұрын

Grew up in a big house and now own a 900sf condo… I love it! No spending an entire Sunday doing yard work!

@Julie-so5kr 3 ай бұрын

‘I just want someone like you to break it down for me’… HE IS! You aren’t listening because Ramit is not saying what you want to hear

@katet.3543 Жыл бұрын

I have listened to nearly every one of your podcasts, and always wonder whether these couples followed through on initial ideas -- was that woman able to manifest another $5K for their wedding? Did the doctor go to a new practice to increase her income? Did that guy stop worrying about the cost of organic strawberries and take his wife on a trip? In this one, the fact they followed up *twice* and gave us a second update on their ACTIONS after the first post-podcast update on INTENTIONS was fantastic. Look forward to the next episode and would love to hear "one year later" follow ups from past couples

@vulpixelful Жыл бұрын

Besides "the dream" I think they are under the impression that kids need their own room. It's not a big deal for two girls/boys to share a room for a while. Plus, if they get a house with a basement, a kid can get a basement room. They usually like that because it makes them feel grown up.

@boricua_in_wa 10 ай бұрын

A modern day fallacy that everyone needs their own room. Never used to be the case.

@DataTranslator 6 ай бұрын

The judge had to explain my ex-wife that our 5 and 6 year old were okay sleeping in the same room when they are with me. 😆

@Mama2CDHsurvivor 4 ай бұрын

When they get older, they will need private rooms, at least the boys together, girls together. If they are over a certain age, the opposite genders cannot legally share rooms.

@AddyOkay Ай бұрын

@@Mama2CDHsurvivor What??? Yes they can 😭😭 Stop spreading misinformation. Siblings, regardless of gender, can share rooms together. A boy and girl sibling would be fine. I used to always share beds with my brothers growing up. It's not weird and 100% legal

@AddyOkay Ай бұрын

@@Mama2CDHsurvivor If you're in a country where it's illegal for boys and girls to share a room, I fear for your freedoms. My guess is that you're from the United States, Canada, UK, Australia, etc based on the fact that you're speaking English, and in the US, there are 0 laws against them sharing a room (google it please). I didn't check the other countries, but im 99% sure there aren't any there either, and you can check as well

@ameliahorton2001 5 ай бұрын

In 2021 my husband and I realized we were living above our means and we would never save for a house. We broke our lease and moved into a fifth wheel. Two years later we make twice what we did in 2021, we are debt free and moving into a townhome guilt free and excited knowing money is not a stressor and soon we will be able to buy a house once rates go down. The sacrifices are worth it.

@itsjanedoe 6 ай бұрын

They missed every chance that Ramit gave them to admit that they need to give up their house. They MUST drastically change their lifestyle to make investments! And that msg kept going right over their heads. Ramit was so gentle and patient, I was screaming at the screen 😡

@Jonnaberg 2 ай бұрын

I looooove how patient and empathetic and kind Ramit is in his videos

@nanettenielson3060 Жыл бұрын

Thank you so much for not taking a shame-based approach! Thank you for respecting the backgrounds people come from and helping guide through a mindset shift. And staying in the awkwardness until they connect to the answer folks dont want to say out loud.

@yasmeantamoor-snyder5615 Жыл бұрын

I think everyone needs to decide before they have kids how many kids they can comfortably support. Children are expensive, money isn’t going to appear out of thin air to pay for them. Instead of three, maybe have one? Two? 😅

@emclaire18 3 ай бұрын

They CAN comfortably afford 3 children if they actually prioritized them. Right now they’d rather have a big house.

@barbaratozzano6364 Жыл бұрын

I don't want to be mean, but this is painful to watch. These people make soooo much more money than I ever have. No one can have everything all the time. Everyone has to make hard choices.

@firefalcoln 6 ай бұрын

A 3,200 square foot home is giant. Especially with a 3 car garage and a basement. I have a 4 bedroom house with 1,580 square feet. No garage. No basement. It’s not as if you have a have a gigantic home in order to have a room for each of your 3 kids.

@jenniferhao8902 Жыл бұрын

Wow what an episode, I had a knot in my throat towards the end when Ramit showed them the change once they got rid of the mortgage, I was hoping they would realize how much it would help but I can understand them not wanting to let go of their dream home. I wish them the best. Thank you for these videos Ramit!

@Playingwithproxies 9 ай бұрын

I felt like they both spent an hour not bringing up selling the house as a good idea.

@Workit908 Жыл бұрын

This a good one. It speaks to society these days as a whole. How it has caused us to have these visions and dreams of what our life will (and should) be and what our hard work should get us. And it's so hard to not let that lifestyle creep take us over, resulting in living above our means instead of not looking the rich part but actually being financially very well off and having the freedom that invested and saved money gives us.

@Arggggggggg 5 ай бұрын

Yup, the actual wealthiest person I know, you wouldn't know he had money. He buys all of his clothes at Goodwill and drives a 20-year-old car. The only clue is that he does eat all of his meals out, but not at fancy restaurants or anything.

@edgardosantana Жыл бұрын

Hey Ramit, just passing by to say that I really appreciated this episode. I found a ton of value and it's a good wake up call as well as a great call to action. Looking forward to joining the Money Coaching program soon. And I sincerely thank you for taking the time to prepare this podcast and share it. I think the format is great in order to extract the lessons from every other segment. Also found especially helpful the pauses to clarify common misconceptions (i.e. such as the fact that 401k is also an investment since I may or may not have been in that group that often forgot to include that in the investments category 😅). Thank you sincerely! 🙏

@alexpetrakieva Жыл бұрын

He probably has PTSD from buying 3 houses so now that’s the ONE thing he doesn’t want to change. I don’t even think it’s about the actual house. It’s more so he doesn’t want to deal with selling and buying a house again. 😅

@theChef1337 Жыл бұрын

I was hoping this couple would realize that if this couple was able to move into a smaller house that one decision would allow them to keep all those other items in their life, but if the house is truly that important to them they should at least recognize the true cost. Having a big house vs direct tv, gymnastics, extra groceries, etc whats more important only they can answer that.

@factorfitness3713 Жыл бұрын

The term "forever home" is just extremely bizarre to me. Statistics say that a young family - almost guaranteed - will not stay in the house that they're in. And the sentimental attachment to one's residence has always seemed so trivial. Yet here we see a family unwilling to give up on this one single expense in any way to the detriment of every other facet of their life. The "American Dream" of home ownership can be so toxic sometimes.

@theChef1337 Жыл бұрын

@@factorfitness3713 not sure if I would call it toxic. As we see in a lot of these sessions with Ramit, a lot of these feelings of attachments comes from peoples past and how they grew up which is of no fault of their own. Everyone’s story is different and at the end of the day they are the only ones that can save themselves. Ramit can only provide different perspectives but he can’t make change years of emotional and psychological build up in a two hour session.

@factorfitness3713 Жыл бұрын

@@theChef1337 Fair. "Toxic" is a loaded term. But I think of anything that leads you to do things that are not in your best interest as at least a little toxic. Everyone has their stuff about money and we see a lot of those biases play out in unhealthy behavior on the podcast. My SO watches a lot of HGTV so I see it there, too, just not cast in as financially focused of a context.

@Walkinfaaaast Жыл бұрын

@@factorfitness3713 I think they are calling it their forever home only because they don’t want to move anymore.

@MissGirl1450 Жыл бұрын

It really wouldn't. They bought when interest rates were at the lowest so let's say 2021. That means their house has probably lost value. Plus there are tax implications for selling too soon, not to mention the costs of selling a home. Then they'd either have to rent or buy a new house. If they buy, they're in for super high interest rates. They'd probably end up in a smaller house at the same monthly mortgage. Should they have bought a larger home? Maybe not, but they're stuck now.

@kemikunle9360 Жыл бұрын

Ramit: These are real people who had the courage to come on. Me: I have to comment that if this was my husband, I would scream

@Arggggggggg 5 ай бұрын

Hey I'm a woman and I can see that the husband probably feels bad that he doesn't make more because his wife isn't content with the very good salary that he actually makes because she is too concerned with her perceived status and keeping up with the Jones's. She's too concerned with what all her friends have. I'm surprised I haven't found any other comments yet let's talk about this.

@slowslug3247 Жыл бұрын

If you find yourself in a similar situation an option would be to rent out a few rooms if your set on keeeping your house. We rent out our master bedroom, made a lock on its back door so it has its own entrance. It was a better sacrifice for me than buying a different house that I didn’t like.

@rawilliams5881 Жыл бұрын

Find the right tenant and they could barter rent for child care, or have the room and board be part of the nanny payment.

@sfab5039 10 ай бұрын

I rent a room from a family for years. It was the best! More people should do it

@bestlifeever4548 9 ай бұрын

I think most people today are to scared to have someone live with them especially with kids. Both security reasons and also personal like noise and not feeling like changing lifestyle around someone else. But maybe if they know the person or find right one to move in.

@hanibee22 7 ай бұрын

Totally agreed, they did it themselves they need to make more money. Do monthly rental or daily rental, I love that idea !

@theopark4861 Жыл бұрын

it would be cool to see the numbers in a visual (maybe a pie chart) like the CNBC money episodes

@amde8554 Жыл бұрын

The focus on cnbc is the money the focus of this is the psychology

@Bob-yh7ir Жыл бұрын

They are all about image and looking good to others. Typical really. They need to stop worrying about what anyone thinks about their life. Lose that anchor. Do whatever you need to make those numbers work. It will feel like sacrifice, but in the end, it is not.

@Financialdemics Жыл бұрын

I’m late in watching this episode but I keep seeing a lot of people mention that 25% of gross income for housing costs is not a lot. I think you are forgetting that your gross income doesn’t hit your bank account, your net does. They still have 401k, insurance and taxes coming out of their checks before they receive their money to pay bills and live. They don’t have room for error, all they need is for 1 small thing to happen and they are completely in the hole especially with young kids. I hope they really evaluate and make some changes.

@karenholloway3940 Жыл бұрын

In what world does a Kindergarter need to be in a private kindergarten? For what reason? I don’t understand this. That in and of itself means you could keep the house.

@euenfheiejrj 3 ай бұрын

Idk if it’s the same but the only time I was in private school was kindergarten because mine was half day and my mom worked full time. A lot of towns moved to full day kindergarten but some are half day.

@jquigley06 Ай бұрын

I never, nor did my kids go to kindergarten, yet I became a physician and they are both well paid masters degreed ( not on my dime) professionals

@euenfheiejrj 18 күн бұрын

@@jquigley06some parents have to or want to work.

@szablicka 7 ай бұрын

Kristina and Thomas, thank you for your courage!

@trumpetdude510 Жыл бұрын

@Ramit, I love the podcast. I’ve read your book and listened to every single episode and I love the content. Here’s a thought I had on this episode. I'd like to see you approach it instead of cutting 98% down to 60%, starting from the ground up. Zero out absolutely everything in the fixed costs and BUILD a rich life with them by bringing in components of their fixed costs based on their priorities. They would start with the house, groceries, childcare, cars, etc, and build from there based on what is most important to them. Once they hit 60%, stop. Then they can look at all the things that are left out and ask themselves the question, "can I live without all of these things?" Then you hit them with the increased investments they'd be able to make with 60% fixed costs and what kind of money they'd have in retirement, the money they'd have for Guilt Free Spending, etc. This way it focuses on their priorities, makes them question what they can REALISTICALLY fit in their life, and most importantly, BUILDS their rich life with them.

@allisonmcconnell33 Жыл бұрын

I love this suggestion.

@daves_medialife9677 Жыл бұрын

This is a terrible idea. It was very clear in this episode that they were trying to have all the things people work towards.. at the very beginning of their journey and then hope it works out later. It was also clear without ramit stating it that they needed to sell the house. They never should have bought it in the first place. The kids are young enough they won’t even remember their time in the house at that age. They need to sell , get a new house that has just what they need, then in 5 years when their oldest is 10 and their youngest is 5, they will no longer have daycare expenses, their income will be higher and then they will be in a better position to afford their dream house. Keeping the house guarantees for next 5-10 years they can’t do anything, no vacations, no kids activities, no shopping, no retirement, no streaming, and still stressed and depressed about money . It will cause more tension and the kids will grow up in that while missing out on all the things other kids get to experience so mom and dad can have their dream home. This was a sad episode and I’ve listened to so many of these and people want change but are never willing to do what it takes to see it happen.

@trumpetdude510 Жыл бұрын

@@daves_medialife9677 Thank you for your critique, I’m just not sure about something you’ve taken away from the episode. What about their situation makes it clear that their house is too much? I don’t think it is. In the episode their mortgage payment was 28% of their TAKE HOME income. That means that their mortgage is likely closer to 20-22% of their GROSS income, which is well under Ramit’s recommended 28% of Gross for housing expenses. Yes there’s utilities and phantom costs, but I don’t think 28% of take home pay is too much for a mortgage. The real question is what is taking up the other 70% of their take home income that isn’t their mortgage? $400/mo for the Jeep sure isn’t it. 70% of their take home is somewhere in the ballpark of $5000 per month. Where is all that going if it isn’t housing or a car, which is typically a household’s biggest expense? That’s what I wish was addressed, and I still stand by my original approach. Even if the house truly is too much, in my approach they could have a discussion about “what if you lived in a home where your mortgage/rent was only 18% of your take home income? Are there places in your area that would cost that much? What would you do with that extra 10% you just freed up in your fixed costs?” And it gets them a lot more onboard with the whole process. It’s an easier pill to swallow for them and can get people who are resistant to change to really see the value in doing so.

@rory644 Жыл бұрын

@@trumpetdude510I’m sure they said they’re spending 2k a month on childcare and have one child in private childcare at 5 years old come on you just can’t have it all.

@frenchellew2857 Жыл бұрын

Wow!! Great input. I’d also love for Ramit to use this approach!

@martingainty9623 Жыл бұрын

This is a great outcome Hearty Congrats to Thomas and Kristine for making these necessary financial improvements in their lives!

@bauttiet.h.u.g.5900 9 ай бұрын

This sort of financial pressure typically sours many relationships. So encouraging to see couples work it out together as a family

@leahmanderson298 Жыл бұрын

I’m glad you addressed the burden of childcare expenses! They are outrageous and unavoidable to maintain the parents’ earning power (if you want children, that is). I’d love to hear how more couples dealing with this cost.

@robertmcgregor9 Жыл бұрын

And western societies wonder why their childbirth rates are so low . . .

@rawilliams5881 Жыл бұрын

Most of the couples I know either make sure they have access to an elder who has retired, or dial back their schedules to divide the childcare by doing it (and often home schooling) themselves.

@sarahb8073 Жыл бұрын

I also want to know. Honestly having our first kid in a HCOL area pushed me out of the workforce for a while, and us into poverty. I took that time to get a higher paying job and move somewhere cheaper. Now that she can go to public school, we had our second and will try to divert the cost of infant care by watching her ourselves and occasionally relying on a grandparent. We could not do this without wfh jobs and are terrified that our companies will reverse their policies. We are able to save for the future now, but it would destroy that ability for the next 5 or so years

@JenniferBrooks-eq3rn 10 ай бұрын

We moved into a neighborhood adjacent to a million dollar neighborhood. Bought a 160k “starter home “ and made it our home home. It will be paid off in a few years. Remember that the wealthy get lots of deals and free stuff, so living here we have an elementary school that we can walk to in the neighborhood with the highest rating. That’s the first thing that gave us and the kids a leg up. The second thing is I chose to stay home and be the family caregiver. I didn’t start out dreaming of either of these things. We were going to build a dream house too etc. etc. But this ended being our smartest move. The kids are thriving, the family is thriving, and our finances are stable. We live a good, happy middle class life and I’ll never have to worry about an emergency or a job loss or the death of my partner taking our home because we’ve been able to build a cushion that’s substantial while giving our kids a lot of wonderful experiences and an excellent education. My opinion is that child care is done best by the parents when they’re very young. I know this isn’t possible for everyone, but in this economy, it’s also an option that might make more financial sense. Before you do anything, decide how important it is to you to have a child. If it means everything, then something will always have to give no matter what. You’ll be making those types of decisions for the rest of your life with kids.

@andrewsnyder9262 6 ай бұрын

It was rough until the kids hit school age. We were paying around $1500 per month for daycare. Now we only pay around $600 per month for ymca after care.

@nicolewhite3276 6 ай бұрын

All adults need to look at and manage their money. Like adults need to take care of their kids. Work, and eat. Thank you for talking about this!

@jotjotzzz5357 6 ай бұрын

Love the resolution of this video. So glad they worked it out!

@aslamiyamohamed2526 Жыл бұрын

I needed this episode. I’ve been struggling with the fact I need to downsize my living situation.

@TH-eb5ro 11 ай бұрын

I just want to share that I have moved many times as an adult, even between countries and moving to a smaller space and having less stuff has always been good memories. It is freeing in terms of time and material items. I will always choose a smaller space because of these experiences.

@feliciawilliams5720 8 ай бұрын

Me too…I think it’s why it’s my fav 🥲

@noura20 7 ай бұрын

This was a great episode! Very relatable and full of helpful insights from Ramit

@Istpmom Жыл бұрын

Dude, my dream too. It’s taken month after month of financial chats to get my boyfriend to relax into talking about money and understand that when we talk about it we’re working on having more freedom.(this was before I ever heard your podcast)

@Daniellephllps38 Жыл бұрын

This episode touched home for me. I completely related to this couple. Thank you for sharing Ramit 😊

@mamalovesthebeach437 Жыл бұрын

This was eye opening...I handle ALL of our finances and my husband just wants me to "report" to him once a month. He responds somewhat harshly if he isn't clear or doesn't agree with the numbers. I've expressed this so things have gotten better. It's best if we're not at home when we do our meetings. I'm 68 and bought my first new car at age 63. My last car, a Volvo station wagon, was purchased used. I had for 22 years. They are house poor...living 'the American dream". My first home was 850 square feet and I had it for 9 years. After a divorce I had to sell the home we built (we ACTUALLY spent 4 years building it ourselves while living in a tailer on the property and both working and commuting full time). I kept the house chipping away at the equity to keep a stable environment for our son for 6 years. I then had to take a hard look at the future and finances. So, at 50 I sold my home and for the first time in 28 years rented. You can continue lying to yourself and suffer the consequences or get real. It's interesting how young people view "sacrifice". TOPIC: I would LOVE to know the brand of your sweater Ramit - very sharp! I admire all of your clothing and would love a link added if you would consider posting. 💜

@MARIARODRIGUEZ-xb5cb Жыл бұрын

This video is so eye opening for me! It’s really good! Thank you to both of these people for opening up and sharing their money lives! So good! So very helpful to us all watching THANK YOU THANK YOU!💚💚💚 god bless your money journey!💚

@conradsurowka6755 Жыл бұрын

This one was hard to listen to. They talk about this lifestyle, only to cut back on everything that actually provided an experience they claim to want. Just so they can have an extra bedroom and a three garage. They’re missing the forest for the trees big time on this one! Wish them lots of luck and all the best.

@lisahinkofer2085 Жыл бұрын

I check my account every morning but not to put out fires but to make sure no fires are starting.

@batemanlife Ай бұрын

Just discovered your channel and I am loving it. I have consumed a lot of personal finance information over the last couple of years, probably too much as I am a bit wrapped up in the small details. I like how you see the bigger picture and I will look to automate more of finances and not sweat the small stuff. Thanks for being a positive influence. I should buy your book right? 😊

@EllieofAzeroth 6 ай бұрын

1:10:00 is the reason why I love Ramit's style so much more than Dave Ramsey's. He's always calling people stupid and tells them they're just not committed if they don't want to sell everything they own and move into their mom's basement for 3 years to pay off debt. I love that you don't do that. You give realistic solutions

@tianah203 3 ай бұрын

I like his style too. Dave is tough love and there is a time and place for that too

@cynthiaivers1708 3 ай бұрын

I think tough love is very necessary sometimes.

@nicolewhite3276 6 ай бұрын

Life changes all the time, and unexpected thing happen. You cant have the mindset of we are all set now, we will be all set like this forever. Good luck to them and thank you for this conversation.

@TheGrouchDnD Жыл бұрын

Am I the only one thinking keeping private school is insane?

@hannahmickey6712 Жыл бұрын

That’s all I kept thinking about. I just want to know how much that was! 😂

@suzanneemerson9787 Жыл бұрын

I’m guessing it’s a religious school and that’s why any discussion of its cost is off the table.

@emilyzahand8609 Жыл бұрын

$2000 for 3 kids is great. I don’t think the private preschool is the problem

@JustAGrl007 Жыл бұрын

I thought about that too, but their kid is in preschool. In preschool, all of the schools are private because our country does not allow free childcare at that age until they’re in kindergarten and sometimes pre-kindergarten. But honestly, I don’t think education matters as much at that age than if the kid was older.

@7346908 Жыл бұрын

You not alone. Private school overpaid nonesense. They just need to move to council that has good public school, peaceful people.

@ProfessorMiles 7 ай бұрын

45:02 is a game changer. Wow! Spoke straight to my heart

@lyndagabriel6539 9 ай бұрын

It says something (really good) about you that you preface the comments with the reminder that these are real, brave people. My own worst instincts sometimes kick in and I might silently judge, but when I think about it, I also get it. I grew up in a tiny house, am in a small condo now, but in between I owned/lived in some lush houses (the pinnacle had 5 bathrooms, was on 7 levels)... and that change upward in circumstances, at first, became a big part of my self-image. Now I'm at my happiest in my modest space, but at the time if I'd been told to lose the fancy house(s), it would have been a body blow.

@ClaxtonBay123 Жыл бұрын

Something to help the viewing audience would be to give basic information about their finances at the beginning. Some of these early conversations don't add up without understanding what they make and their debt...for example

@ze_ep Жыл бұрын

Income, expenses, assets (equity), debts (edu, auto, cards, mortgage), expected inheritance. Some of this comes out during the session, sometimes - usually in fragments. Just state it clearly so we've got the broad strokes.

@ManyMannyMan 2 ай бұрын

Good to know it wasn't just me. I get they want to talk about their situation before the numbers, but it provides no context

@roxannedesvergnes8080 Жыл бұрын

This kills me to say this and I’m not trying to be mean but this is the second episode that I have watched where the couple REFUSES to admit that the “BIG” house has to go - you ppl say that you will do anything for your children and it sickens me to watch that this is what AMERICA has become let’s keep up with the JONESES even tho we will probably go bankrupt. I don’t know how he keeps his composure with these couples - I think he needs to be more direct that they will LOSE EVERYTHING. I appreciate that these couples come on but what I don’t understand is why come on if you aren’t going to do the work? It reminds me of a couple that wants to go to therapy but doesn’t actually want to do the work. I wish they would come to realize that you are not putting your children’s needs “FIRST” your putting your “ luxuries” first. America is stuck on this idea of bigger house better car and then you go to these “big” houses and all it’s filled with is a bunch of SHIT that they barely even know about. It’s very sad 😞 like Biggie said “More money more problems”

@unknownt5391 Жыл бұрын

I wish the couple well and hopefully this experience helps them on their journey to find financial peace. Thank you for sharing your story =)

@maimaivaj91 Жыл бұрын

Wow I love this! Thank you so much for your work Ramit!

@LarisaC. 4 ай бұрын

Ramit congratulations! What an impact you’ve had. Great steps they’ve taken, took all of you a lot of work to get there

@lowlowseesee 5 ай бұрын

Ramit master of analogy. I love these

@rafaelbryan9863 Жыл бұрын

I have watched all your KZfaq videos and recently bought your book 2nd addition! I love how up front you are and I thank you for all your great advice. I’m currently applying your strategies in my life and it feels great! So thank you for all you do!

@crissydv1 Жыл бұрын

I’ve been binging your show and it’s so great. Can’t wait for the show

@rushinsm Жыл бұрын

Your kids don't all need their own rooms. Especially when you're broke.

@LaJulieOrtega Жыл бұрын

Facts. Mine don’t even sleep in their room 😂

@rileygiordano2380 Жыл бұрын

This is our main big dollar debate. We have a paid off house, but 2 daughters that share a room (9 and 3). We could build onto our house and add 6 figures of debt, which would improve their comfort, but what's the value as opposed to investments, etc. Does the extra space really improve our life enough to offset the stress of debt.

@aaront936 Жыл бұрын

@@rileygiordano2380 here in 5 years that investment might be worth the peace and quiet not hearing teenagers fight over a shared room.

@leelowe1 Жыл бұрын

Agreed, especially when they are young . If more space is needed, a better option is to plan it out and do what you have to in order to pay for the cost instead of taking out more debt to do it .

@kimsousa6420 Жыл бұрын

OMG - 53 min. in. I was avoiding looking at my advisors 1% fee for "managing" our Traditional IRA & Roth IRA. For the last 2 years, I paid $19k in fees on my investments. I call Charles Schwab and unlinked him on our accounts, then switched the accounts over to Vanguard. I'm concerned if they do sell their large home - with a great rate, for a smaller home at today's rates. Might end up with the same payment in a smaller home.

@mithicash1444 Жыл бұрын

One of the few good things about working in the government is the TSP retirement account, the lowest(almost non existent) management fees. My advice on general investments is to use a directed account and do it yourself, just in safer asseets.

@queen.mama.slots.5977 9 ай бұрын

Wow ! That was amazing. I’m a new subscriber who’s learning from you and these wonderful couples. I’ve taken in every word and I’m applying it to my own life. I’ll be sharing with our children and purchasing your book. Thank You.

@manilamartin1001 9 ай бұрын

I'm glad he talks to them as adult human beings and not hitting them with a whip. I know I wouldn't be as gentle. Great interview.

@jennifercrosdale5391 11 ай бұрын

I'm really shocked that these 2 people didn't sit down and have a discussion and ask themselves "where are we going to get the money for childcare, a house, a Jeep, private school, retirement, etc". They probably let their realtor tell them what size house they can afford. I have an idea for them though, start renting out rooms in that big ass house of yours so you can get someone to help pay the mortgage.

@michelejohnson6459 6 ай бұрын

Need to be very careful about that when you have kids. You can't let everyone around your children.

@lbslott Жыл бұрын

I can resonate with this episode a lot, however we have very little fixed costs- no mortgage, minimal children’s education (we homeschool), and I can relate to her so much. Every month is so stressful just trying to figure out how we’re going to pay our bills. I’m trying to grow a business, but that is going very slow and often adds a lot of stress and takes away from my “rich life.” Anyway, thank you for the podcast! Trying to learn how to do this better!

@dippingmyfoot 11 ай бұрын

What about opportunity cost? You haven't factored in what you might be earning outside the home, if you were to enroll your kids in public school. There is a cost associated with that decision (and I am not going into any religious discussion with anyone).

@jasonstarnes351 6 ай бұрын

I just found you tonight, I really enjoy your content so far. Hearing these couples really has made me look at myself.

@tirzah-marielewis3447 Жыл бұрын

This was hard to watch I feel their issues so hard… we left private school 16,000 back on the table I went back to work full time and am buying back my pension. But honestly we were about to make a similar mistake with our housing. This is eye opening and humbling and we will be using the CSP as a guide during our search next year.

@michelleoneill2940 11 ай бұрын

Why did I not find @Ramit years ago???😢 I have been needing put on all the podcasts and just bought your book. My husband and I both grew up without any financial guidance other than start a savings account. Probably would be considered lower middle class to middle class in general. I feel we have been successful in life so far but I think what could we have done to live a rich life if we had had this advice earlier in our lives?

@ramitsethi 11 ай бұрын

Glad you found me now - don't focus on "what ifs" of the past. Strat living your Rich Life today!

@letsgrosh 2 ай бұрын

These are incredibly enlightening. Thank you, Ramit. Also got a chuckle out of me when y’all decided not to bleep the colorful language at 27:04 😂

@4thand133 Жыл бұрын

One obvious thing that would help them is to give up the idea of retiring in their mid 50s, as they seem to be aiming for. I mean sure we'd all like to retire early, but if the choice is between leaving the home they love and working until a more standard retirement age, the choice seems obvious. Also he left a job that paid more so obviously has skills to earn more than he is currently. They are not moving no matter what, that much seems obvious... so those steps make a bigger difference than cancelling gymnastics lessons imo. Not judging at all, an emotional attachment to a home you love is perfectly reasonable so they need to look at other things... more income and working longer are 2 obvious ones.

@BrendaKnoll 7 ай бұрын

This is so fascinating

@nhraijordan6459 7 ай бұрын

LORD... 1:17:00 minutes in we GOT it! Shout out to Ramit for staying quiet and letting this couple work toward their own realization.

@isaacmaue-tg7kl 2 ай бұрын

One thing to keep in mind is that many daily purchases add up to one of those bit ticket monthly line items. I think that this is where Caleb hammer shines. He lists out every single transaction people make over a month and it adds up to hundreds and hundreds of dollars a month.

@TheThinkingBar Жыл бұрын

The thing that still surprises me about money is how many times we under appraise the value of our time or over appraise the real value of the $15 here and there Ramit mentions, (blows my mind when I think of my past experiences examples of this tendency) really enjoying the podcast. Keep it up!

@Galworld761 5 ай бұрын

I go thru recurring expenses ONCE per year. Subscriptions, cable, insurance and cell, etc. That is it. Once per month I log my expenses AND how much I have contributed to investment accounts. $15 here and there is not impactful but obsessing over it is detrimental to your health. I am frugal. I pack my lunch and coffee every day. My car is not financed and I wait 24 hours before any purchase above $50. I don’t have mental bandwidth for what this woman does.

@sarahuber8567 8 ай бұрын

Her dream involves vacations with him. His dream is to be a season ticket holder 🙄

@JC-sw7dv 9 ай бұрын

My heart goes out to this couple. They are so brave to share their story but their fairytale will turn into a nightmare if they don’t wake up! They can’t sell their home because they have a great rate and will not be able to find anything even remotely comparable in terms of space for their family!

@snackman2005 2 ай бұрын

They are living a lifestyle they cannot afford. Denial isn’t just a river in Egypt.

@dennisshea9540 Жыл бұрын

I don’t know why they don’t prioritize their spending and then when they hit the 65-70% mark then they just have to cut everything else out of the budget. It forces you to make hard choices. Don’t cut from 98% down to 65%. Build your budget by most important to least important and when you hit 65% that’s it. The money is gone.

@dennisshea9540 Жыл бұрын

And yes I would 100% come on the show to talk about my situation

@Walkinfaaaast Жыл бұрын

Great episode. I was hoping that when 98% of your budget is fixed costs that you’d be willing to consider putting it all on the table to get it down. It seems they literally think the best answer was “all we have to do is make more money and everything will fix itself”. Unfortunately I think even if they made more money they would find more fixed costs to add. What I think is a bit obvious is they don’t seem to plan out anything and think of how their decisions will affect their fixed costs. Buying a home, having kids, private school, etc, etc…it all adds up very quickly. Hopefully they get to where they need to be so they can relax a bit. It will take some sacrifice now, but in the long term it will pay off. I would be interested in seeing how some of these are doing down the line, say a year from now to see what (if any) progress has been made.

@plywood7894 6 ай бұрын

14:40 I definitely say that about food. It will be a dream to not think about food or cooking again. I hate it. And I dread meal prepping and cooking so much

@angies7906 7 ай бұрын

Great episode!

@Holdeenio 8 ай бұрын

This was another interesting episode, thanks Ramit & co. 98% on fixed costs is a scary proposition. I 'm glad they sold the Jeep! As they both seemed super set on keeping their house, I definitely believe they should make that their priority. Cutting those smaller costs is a good start, but I think all of their urgent problems would go away if they focused on increasing their income first and foremost. 80% on fixed costs is still a bit too tight for my peace of mind - but good on them, 18% reduction in costs in such a short time is a great start. 🌟 If they could reduce that 80% to 55%, purely by changing their jobs, going for promotions, bonuses etc. they'd have so much wiggle room to save, invest and achieve their long term goals without sacrificing their dream home. 🏡

@enhinkmedsand 5 ай бұрын

How can they possibly say their main priority is family, yet they put their three month old baby in childcare?

@a.miller8316 3 ай бұрын

3200 sq ft!!?!??!! Holy cow. More important than making memories... Wouldn't give up direct TV. Wtf

@maril1379 9 ай бұрын

Spend below your means.I am watching from NYC. thumbs up. Parents are not obligated to pay for college. Bottom line they are in a house they cannot afford. We all make mistakes. I grew up in an apt and was okay and still okay.I wish them well.