Debt-Free but Still at Risk: Ramit Sethi Rebuilds Mason and Becca's Spending Plan

Overview

Mason and Becca, 34 and 32, spent three years digging themselves out of debt. They sold their house, moved to Florida, and now have about $100,000 from the sale sitting in a high-yield savings account. Their question for Ramit Sethi was what comes next. In Mason's application, the challenge had "shifted from paying off the past to protecting the future." Neither of them trusts that the habits that caused the debt are really gone.

28 min read

Ramit's view, built up over the conversation, is that on paper they are in much better shape than they realize, but their day-to-day behavior hasn't caught up with their net worth. He thinks that if the behavior doesn't change, sliding back into debt is a realistic possibility. His goal is to make sure they don't simply lean on a windfall and instead change how they treat money.

How a successful-looking couple ended up with $50,000 of credit card debt

The two have been together since they were about 20. Becca said they had "really, really bad money habits" from the start. Both grew up without spare money, and once their careers took off, they treated income as a reward to spend. That gave them what she called unreasonable expectations of what they should have. From the outside they looked successful. They owned a home and had cars and the lifestyle they wanted. Their bank accounts didn't reflect it, and Becca believes their avoidance came from pretending they were doing fine.

The turning point came about three years ago, when they wanted to move out of state and assumed they couldn't afford it. That made them ask why. Their salaries seemed comfortable, so why didn't they have money? When they laid everything out together, each of them had credit card debt, close to $50,000 combined. They called the conversation "brutal" but factual, with no arguments. Becca said she was disappointed in them both for working hard and growing their careers without setting themselves up for success.

Their next move made Ramit wince: they took out a 401(k) loan. They put the credit cards away completely and paid aggressively. The loan was scheduled for 18 months, and they paid it off in 12. When they applied, the credit card debt was down to about $5,000. Ramit said repaying a 401(k) loan is rare. The industry warns against these loans because borrowers often keep their bad habits and never pay them back, which hurts them now and later. He called their repayment "very impressive" and told them not to do it again.

The relief came with nervousness. Becca explained that both of their families treated being in debt as normal, and they had never learned how to avoid "that creep of just swiping the card and moving on with our day."

The $100,000 they won't touch

They bought their house for $169,000 and sold it for $289,000. After fees they cleared about $113,000. The roughly $100,000 left sits in a SoFi high-yield savings account. Becca said having it there feels "very intimidating." She never activated the debit card for that account so they wouldn't be tempted. Both of them have access, and both say they aren't touching it.

Ramit said he didn't mind this. He described it as building behaviors "to shield yourself from yourself." He also said the long-term goal is for them to trust themselves, and for now they are "a little wary" of themselves. Speaking to the audience, he argued that $100,000 in cash is a reasonable eventual outcome for a household earning around $160,000. He added that people who follow his system will eventually have more money than they expected, and will probably feel about it the way they feel about money now unless they deal with that.

The original plan for the money was a down payment. They held off after realizing it would leave them with no savings, even though their realtor pushed them to buy right away. Ramit's comment was that realtors may be pleasant, but they are there to earn a commission. Neither Mason nor Becca ever expected to have $100,000 in the bank before they were 20 or 30 years into paying off a house.

"We just swipe the card"

All of their income goes into one joint account. When Ramit asked how they decided what to spend on over the whole relationship, they said they just swipe: no budget, no discussion. Becca said they had never been unable to pay their "bills," and Ramit pointed out that they had carried credit card debt. The debt was never for bills, she said, only for mindless spending. Mason put it this way: "We made debt normal." Vacations, small purchases, odds and ends all went on the cards, and they paid the minimums, which felt like paying it off.

This led to one of Ramit's recurring points. Becca thinks of bills as the mortgage, car payment, and utilities. Ramit counts everything as a bill: "mortgage, Fritos, any of it... Disneyland, it's all bills." Some are fixed and some vary, but by the end of the month they all need paying.

Their habits differ a little. Becca clips coupons and hunts for deals at the grocery store, while Mason buys without much thought. Asked for her "money dial," Becca named clothing, beauty products, and jewelry, which Ramit called self-care. Mason's is getting out of the house. They both work from home, so eating out and outings with their son matter to him. The family has Disney World annual passes, about $3,000 a year for the three of them, and they go often and for short visits, so they can enjoy it without wearing themselves out.

They described the mindless spending they're afraid of returning to: mall trips, walking into Target "for no reason" and leaving $200–$300 poorer, date nights with a five-to-six-hour babysitter, a $200–$250 dinner, then bar hopping or meeting friends, which gets more expensive. Becca's example of an expensive, fairly mindless purchase was Botox, about $200 every three months. Ramit said he had never seen Botox in a Conscious Spending Plan but was fine with it. When he asked whether one of them ever slows the other down, they said the opposite happens: they "egg each other on."

Their one clear disagreement is when to buy a house. Becca wants one within five years. Mason prefers to rent and explore the area and says the timing depends on their finances. Ramit welcomed Mason's caution, since a house is the biggest purchase of their lives.

Passive income and other warning signs

Mason's application mentioned a business idea. He had pitched their apartment complex, with a letter of intent, on renting an underused 800–900 square foot building for a staffless arcade with tap-to-pay video games in a busy vacation area. Becca supported it as a way to earn passive income, but admitted there was no real plan behind it.

Ramit said this was when he started to worry. He called "passive income" a possible sign of a dreamer. The online pitch, where you drop a quarter into a machine and it prints money forever, is not how it works in his view: passive income takes a lot of work and time and often fails, and making it the goal looks to him like a get-rich-quick mindset. He said these clues made him think the couple's fear of slipping back into debt might be realistic.

The numbers: better than they thought, but out of balance

Doing the Conscious Spending Plan together was "eye-opening," they said, because they had never really looked at their numbers. Becca had to push back when Mason wanted to leave out the Disney pass. He said later that he'd seen it as already paid because the money was in the account, and admitted that wasn't a healthy way to look at it. Ramit called these "mental contortions" and said he wasn't criticizing them. He encouraged them to treat such beliefs with curiosity ("isn't that interesting?") rather than as proof that someone is stupid, and predicted they would find hundreds more.

Their snapshot showed assets of $11,000, investments of $204,000, savings of $124,300, and debt of $13,600, for a net worth of $326,567. Mason's first reaction was to get the debt to zero and keep it there. Becca said she felt much better than a year earlier. She hadn't been checking their 401(k), pension, and Roth, and had guessed there was about $60,000 in them. Ramit enjoyed the contrast: coupon-clipping to save $1.29 on green beans while having more than triple the investments she thought.

Of the $124,000 in savings, about $100,000 is from the house. The rest comes from Becca moving $500 out of each paycheck ($1,000 a month) into a high-yield account for two years. She picked the amount by comparing income to bills and deciding she could live without it. Ramit called this very healthy and said he tells people on tight budgets to try automating even $20 a month because they won't miss it.

Their gross monthly income is $13,256, about $159,000 a year. The spending breakdown was lopsided: fixed costs at 71% (Ramit wants 50–60%), investments at 2% ($200 a month), savings at 13% ($1,000), guilt-free spending at 14% ($1,442), plus $380 a month into an HSA. Becca had been waiting to ask Ramit how to invest the HSA money, since it now had enough to invest.

Inside the 71%

Rent is $2,550 for a fully furnished apartment, which Ramit liked. The car payment is $765 for a Honda Pilot, but it didn't include gas. They estimated gas at about $100 because they work from home, and Ramit raised it to $125 to cover maintenance. He treated the missing gas as a tip-off: if gas was left out, what else was? Becca had assumed it fell under "miscellaneous." Ramit said people treat that line like a junk drawer, when it's meant for things you couldn't have predicted after trying to count everything else.

Groceries were $800. Clothing was $250, which Ramit doubted given how well dressed they were. Becca said she doesn't buy often and resells clothes to fund new ones, and Ramit noted that resale brings "pennies on the dollar." Subscriptions were $605, covering the Disney pass, their son's extracurricular activities, a $100 meal service, Amazon Prime, Audible, Spotify, and other small items. Miscellaneous was around $1,000, and they guessed it held haircuts and self-care like hair, massages, nails, and a trainer. Ramit suspected it was higher.

Then he asked whether they track spending. They don't, and they didn't while paying off debt either. They just stopped doing things. Since the payoff and the move, spending has crept back up. Becca said it's better than before but still includes mindless spending. Ramit said he doesn't mind spending going up. He minds when it's mindless.

Mason's day-trading account

A note in the plan said "day trading pre-market." Mason explained that he has a small brokerage account he trades from, started with $1,000 about a year ago, and is now at $600. Becca knew and was open to it if he could learn to do it well. Asked what happens if the account hits zero, Mason said he would stop trading for that January-to-December period and reassess. He admitted that losing it all would suggest his skill wasn't great and he should maybe stop.

Speaking to the camera, Ramit said the numbers looked fine but small phrases were raising his "antenna." Mason says he doesn't buy much, and when he does it's on sale. Becca says they swipe without thinking. He wanted to know where these behaviors came from.

Becca's upbringing: necessities, deflection, and "everybody's poor"

Becca's parents were separated. The family had necessities but not many wants. When she asked her dad for something, he said he gave her mom enough each month. Her mom said that money went to bills. Becca's takeaway was that neither of them wanted responsibility. Debt was normal in the people around her: you work hard, sometimes it isn't enough, so it goes on a credit card.

At 16 she got a job and saved half of every paycheck until 18. That paid for her own car and two years of college. She doesn't know where the habit came from, possibly the woman at the bank where she opened her account. Her parents never talked about saving, investing, or debt. At 18 she "went wild," spending on parties and apartments to avoid living at home. She got credit cards around 21, didn't finish college, and went to work full-time without saving, figuring she had plenty of time.

What changed things was in her late twenties, when friends her age were clearly good with money. They talked openly about saving, how they split bills with their spouses, and avoiding mindless spending. Ramit then asked about religion, and it turned out to matter. Becca and Mason met at church. Becca left religion around 26, and Mason a little earlier. Becca described it as a deep re-examination: she realized she was copying her mother, who worked hard, took no big chances, and expected to work 40 hours a week and do nothing else. She stopped caring about the judgment of her mother and people from church and decided to live the life she wanted, which included money. Ramit said it was unusual for a couple who met at church to go through that together, and he had suspected something like it, because changing your relationship with money in your twenties by asking friends usually means something bigger is happening.

The message Becca still carries is that she would never be rich: "everybody's poor cause everybody around me is poor." Ramit said this shows in the plan as untracked spending typical of someone who assumes they won't be wealthy, when she very well could be. To viewers he compared a child to a sponge absorbing stress and scarcity without explanation, and asked parents to stop "protecting" kids by staying silent about money.

Mason's upbringing: money as struggle

Mason's parents divorced when he was 12. Nobody discussed money openly, but he noticed the car changes, the furniture disappearing, garage sales, and frequent moves. He watched his father struggle through the divorce and come close to canceled cards, bankruptcy, and losing a house. At 12 he wondered whether he'd need to help his sisters or drop sports and activities. The clearest memory is his mother going through pages and pages of bills. His lesson was that bills are something you struggle and stress over every month.

His mother also went back to school with three kids and improved their situation, while his father "slid different directions." Mason took from that the work ethic that you can work your way out. He said he had no good money habits until his serious relationship with Becca made him want to change, and he never wants his son to see what he saw.

When Ramit asked whether they had role models for money, parenting, or relationships, both went quiet, and Becca said she didn't think she had one. Ramit said this explained a lot and suggested they look at it as how far they had come with no guide. Their next step, he said, is to find a couple they respect and learn from them. He added that people who grow up with scarcity tend to either become more anxious and protective or spend everything once they finally have money, you can't predict which, and early in their relationship both chose spending.

Their son and what "a rich life" means

They want their six-year-old to handle money well from the start of adulthood and not live paycheck to paycheck like they did. Asked what he'd do with $100,000 at 18, they said they'd want him to invest it rather than spend it. Ramit pointed out that they are in that situation now.

Becca's rich life includes a dream home, several vacations a year (family trips and trips as a couple), frequent date nights, a social life and shopping without feeling stretched, and above all an end to the anxiety she still feels "every single day." Mason wants a home with a pool and to stop worrying about spending on nicer things. They estimated this would take $250,000–$300,000 a year. Ramit put it at $300,000–$350,000 in their area, about double their current income. When he asked whether they wanted to put in the work for that, both said yes without hesitation, which Ramit said he hears less often than people might expect. Becca is an HR manager, and Mason works in customer service for an energy company.

Rebuilding the plan: debt, emergency fund, miscellaneous

The first move was the remaining $13,600 of debt, which cost $588 a month. Ramit told them to pay it off from savings. That dropped fixed costs from about 73% to 66%. With $124,000 liquid, they have more than a year of expenses, so the emergency fund is done and the $1,000 a month going into it can be redirected. Ramit described this as a puzzle where the pieces fit: paying off the debt and stopping emergency-fund contributions free up money together.

Next was miscellaneous. They agreed it had to be controlled by tracking. Ramit used hair to show the scale: Mason and their son get haircuts about every two weeks at about $65, and Becca spends about $300 every six weeks, adding up to thousands of dollars a year while Becca tracks bell pepper prices. He said hair every six weeks might be worth it, but then something else, like the number of date nights, has to give.

Mason asked whether they needed separate accounts for each category. Ramit said he doesn't use a grocery account. Paychecks go into checking, spending goes on credit cards that checking pays off, and they work backward from expected monthly spending to keep checking funded. He wants their categories to be specific enough to act as a "fingerprint." At the moment their fixed costs look generic, when their priorities are obvious: clothing and self-care should be named and set deliberately, and that's nothing to apologize for.

They set miscellaneous (then at $917) to $500, which brought fixed costs to 63%. They cut groceries to $600, counting on the meal service, and got to 61%. With Ramit's nudge, they trimmed subscriptions, starting with Audible, while keeping Disney, and reached about 60%. Ramit said the numbers impressed him less than the teamwork. The hype they used to encourage spending was now going the other direction.

Redirecting money into investing

That left $2,634 a month, 25% of take-home pay, for guilt-free spending. Ramit usually recommends 20–35% but pushed them toward the lower end. He argued they had shown a rare ability to change course, were young with rising incomes, and were in a "golden age" before heavier responsibilities, so it was time to "double down."

They moved $1,000 a month into stocks. Investments rose from 2% to 11% of post-tax income, and guilt-free spending settled around 15%. Ramit framed the limits as their own choices: if they wonder why they can't have four date nights a month, the answer is that they chose Disney instead, and they can revisit that at the end of the year.

The HSA has about $3,000 after seven or eight years. Becca only learned in the last six months to a year that it could be invested. She doesn't expect to spend much of it now and wants a tax-advantaged pool for higher health costs later, separate from retirement and Social Security, and plans to max it out. Ramit praised the "triple tax advantage" and moved the $380 into the investment category. By his count, including $845 a month already going into retirement accounts, they would be investing around $2,400 a month.

For savings, they named a real upcoming expense: the Honda is leased, they want to buy it out, and the buyout will be about $25,000. Ramit suggested a dedicated "lease buyout" account and the same approach for every big purchase. Using Becca's dream trip to Bali, estimated at $10,000, he walked through the options: save for 18 months, cut spending elsewhere, shrink the trip to $5,000, or wait longer. The one thing they don't do anymore is swipe now and deal with it later.

The $800,000 house

Ramit pointed out that the house wasn't in the plan at all. Their options were saving, a large loan (which still requires tens of thousands down), saving for years to buy outright, or not buying. Speaking to the audience, he said that with a dreamer involved, the vision had to be tied to concrete trade-offs. On their current income they can't have the vacations, Disney, clothing, eating out, and a house all at once. Some things happen now, some get delayed, and some get dropped. Without that, he said, they'd leave and go back to their old ways.

Mason said the fully realized version would be about an $800,000 house. Right now the money would have to come from draining savings, a loan, or retirement, and he doesn't want to touch retirement or be "house poor." Ramit shared that when he and his wife were in their mid-thirties and didn't plan to buy for five or ten years, they invested their down payment money so it could grow. Mason was comfortable with that and set five years as the minimum. They moved $500 a month from guilt-free spending into an invested house fund. Ramit estimated that $6,000 a year for five years is $30,000 in contributions, possibly growing to around $50,000, though he said he couldn't do the math in his head. They agreed it wasn't enough.

Mason then asked about an account for their son. Asked to pick between the house and their son's account, they leaned toward their son, and Mason suggested splitting it $800 and $200. Ramit asked how they knew they could afford to save for him. He described the panicked DMs he gets from new parents asking about 529s who, when asked about their own finances, admit they started late. He read that as saying: I've lost the money game myself, but my child won't. His view was that their son already lives differently from how they grew up, and if they bring him into money conversations, like paying a bill together or doing a grocery run on $10, he'll grow up far better informed. Ramit said his own parents couldn't give him a check but taught him investing, helped him open a custodial account, and encouraged him to work, which was worth more than money. Mason agreed that few 18-year-olds could handle a $50,000 check. They settled on putting money toward the house for now. Their son has time and could take a loan, and they can't borrow for retirement.

Income, dreamer tendencies, and day trading

With the spending mostly allocated, Ramit said there was little left to cut, and roughly $1,000 of guilt-free spending wasn't realistic for them long term. The one remaining lever was income. Becca wants to advance in her career and is considering going back to school. She estimated she could eventually reach $245,000 as a VP of HR at her company, where a degree isn't strictly required but would help at other employers. Mason said his company gives standard 3% annual raises, supervisor roles open up occasionally, and he'd consider moving into sales. He passed on one recent supervisor opening because the hours and timing didn't work, and said next time he'd take it and tell management he's interested.

Asked what could derail the plan, they named falling back into swiping without tracking, and a job loss, which Ramit said their savings could absorb for a long time. His main warnings were the miscellaneous category, which each of them should own specific numbers for and report on at a formal monthly money meeting, and Mason's dreamer tendencies. Mason agreed. He had read Ramit's book Money for Couples on the flight while Becca called him a dreamer. Becca said he thinks about business ideas for months without acting. Ramit mentioned the arcade, a solar business idea from the application, and the day trading as all fitting the pattern. He called Mason "dreamer-adjacent" because Mason has actually changed his behavior, but said a couple aiming for this kind of life needs both people rowing in the same direction.

When Mason mentioned seeing people make his salary in a day trading, Ramit called it survivorship bias, since the losers disappear. He cited the claim from chapter six of his book that almost all day traders lose money, "in the 98 plus percent range." He compared copying them to watching Michael Jordan and wanting to be him, called day trading basically gambling, and said a contained few hundred dollars for fun is fine. The danger is when it escalates, and he said losing it all is "a matter of time." His advice was to set the dreamer projects aside and push their careers as far as they can go. If they later have plenty of money and free time, they can try a business then.

Retirement projections and a ten-year house timeline

Mason had estimated about $1.5 million for retirement, not counting a pension he said could be worth around $800,000 if he stays with his employer. Ramit's team projected, leaving the pension out, about $3.1 million when Mason turns 65, or roughly $126,000 a year in safe withdrawals. Becca found that more reassuring than she expected. Under the new plan with less spending and more investing, the projection rose to $4.7 million, or about $188,000 a year, more than they earn now. Ramit called it a big difference from a few small changes. They both said they'd probably want a higher lifestyle by then, and Ramit agreed they should aim to move up, which again points to income.

Ramit then modeled a raise. If Becca's monthly take-home roughly doubled to $10,000 in five years, fixed costs would fall to 43% with about $5,000 a month left over. Adding Mason's estimate of going from $4,800 to $6,500 a month brought fixed costs to 39%. Ramit called that "ridiculous." He doesn't think they need to stay that lean and said their rent would reasonably rise. His suggested sequence: after a big raise, build savings for a few months, hit milestones, then raise rent a little and put the rest toward a house, "living for today and for a bigger tomorrow."

By the end, the house timeline had shifted. They now thought a ten-year timeline for a dream home was more realistic, which would put them in their early forties. Ramit, who rents, said he wouldn't feel he'd missed anything, but they need to start saving now.

Becoming debt-free

Asked how to build a healthier mindset, Becca said she needs the confidence that she doesn't have to live the way she grew up, and that she can be rich. Ramit replied that she is going to be, and pointed out that by the end of the day they would be debt-free. They had debated paying it off before the show and decided to wait until they talked to him. Becca said they hadn't been debt-free since she was a teenager.

During the recording a text arrived saying the student loan was paid in full, with zero left. Ramit asked them to celebrate in a way that means something to them and described the next step as bringing their son in and building family values. Afterward he said he thinks of them as a high-performing couple who never had anyone teach them about money. He expects them to invest and save more, though he thinks they'll keep considering buying a house and hopes they keep making clear trade-offs.

In their follow-up videos, recorded three weeks later, they said they had left the studio and paid off the debt right away. Each opened and maxed out a Roth IRA, and Mason also set up automated monthly deposits into a brokerage account. They switched from monthly to weekly money meetings to build confidence, keep track of where the miscellaneous spending goes, and make their guilt-free spending "mindful versus mindless." Mason said the idea that stuck most was Ramit calling his home a "no debt household," and he wants theirs to be one now. Becca said they now see themselves as already living a version of a rich life, and that talking about money has become exciting instead of stressful. The open questions they left with are whether their incomes will actually rise enough to pay for the house and lifestyle they described.

Vacation, debt. Little purchases, odds and ends, things, debt. We've made debt normal.

We should not be living this way.

How do you decide what you spend money on?

Just buying things that we see that we want. Going to Target, coming out spending $200, $300. Extravagant dinners. When we're done with that, let's go bar hopping and just running up bills.

You ended up with 100K in your bank account. Is that just sitting there right now?

Yes.

What does that feel like?

Very intimidating. I don't want to be tempted to spend it.

You're creating these behaviors to shield yourself from yourself.

Yes.

Yes. From the start, we had really bad money habits. We came from very similar upbringings.

Mom or dad ever tell you to save?

Wasn't a lot of open discussion about finance.

No advice at all. We don't know the right steps to not get back into that creep of just swiping the card.

To change your entire relationship with money, you would need to trust yourselves. Right now, you're a little wary of yourselves.

Imagine you woke up tomorrow morning and you had $100,000 extra in your bank account. How would you feel? Would you be happy? Or might you feel scared, even anxious, because you don't know what to do with the money?

Mason and Becca, 34 and 32 years old, used to be in debt. They have diligently paid it off. They even sold their house. And now they have $100,000. But what are they supposed to do with it? Mason applied to be here on the podcast and he said, "We've spent the last three years buckling up and fixing past mistakes. Now that we've relocated to Florida and have $100,000 from our home sale, the challenge has shifted from paying off the past to protecting the future."

Let me take a look at their numbers. I'm going to pull up their Conscious Spending Plan. Assets, $11,000. Investments, $204,000. Savings, $124,000. Debt, $13,600. Total net worth, $326,567. Fixed costs, 71%. That's too high. Investments, 2%, savings, 13%, and guilt-free spending, 14%.

I have questions. This is actually quite interesting because you can tell that the day-to-day spending, the fixed costs, the savings, the investment is out of alignment with their net worth. And so we need to fix this so that they don't simply depend on a windfall, but they fundamentally change the way they treat money. That's what I'm going to try to do, speaking with Mason and Becca.

Let's take a look at the application. So you wrote, "For a long time, we lacked a unified plan which led to significant debt." Tell me more about that.

We've had a few years of debt that we've been working hard to pay off, and we're now toward the end of that. So it's not something that we ever want to go back to, since we're so close to the end of it being completely green, and we don't know the other side of that.

Do you feel the same, Becca?

Yes. I think we've been together for a very long time, since 20 years old. From the start, we had really, really bad money habits. We came from very similar upbringings of not having a surplus of money growing up. So I think when we started working and getting our careers started, that money in our head was a reward for us to spend and to get into really unreasonable expectations of what we should be having, which is what led to a lot of debt that we got into.

It wasn't until about three years ago that we, I guess, got a little bit more critical thinking on, you know what, we should not be living this way and we need to get a handle on how we're spending our money.

Take me back to that decision three years ago.

Sure.

Where were you? What happened at that very moment?

The conversation really came up because we wanted to move out of state, and we didn't think it was possible because we're like, we don't have enough money in the bank to be able to move. But then we started to question why. Why don't we have enough money? Our salaries look comfortable enough to be able to do something like that. Why are we not feeling that way? And that's when I think we really uncovered I had credit card debt. He had credit card debt. And so when we looked at it together, we're like, we have to do something about this. If we don't want to be in the same place that we are now in five years, we have to make a change.

So it was really starting to go, we need to hold ourselves more accountable and find a better discipline for ourselves than just spending a ton of money and not having any plan, any budget for it.

Wow. How did that conversation and series of conversations feel?

It was honest. It was very brutal.

Yeah, very revealing. You took the lead, and it was a brutal conversation. It was a good conversation. There were no arguments. It was just very factual. In hindsight, it was very much a sit-down that you recommend.

Yeah. It was just our first one, so we didn't know the guidance, but it was very eye-opening with what we had, what we both owed.

We put that together. We sat down, hashed out a plan, and it came through.

I think I felt a little bit of disappointment in ourselves because we have worked really hard, and we grew a lot in our careers over time, and then realizing that we did not set ourselves up for success. And I think that was part of our avoidance for a long time, pretending like we are doing okay. We are setting ourselves up for success, because I think on the outside looking in, we did look successful. We owned a home. We had our cars. We were living the lifestyle that we wanted, but in our bank accounts, it wasn't reflecting that way.

Wow. I wish more people talked like this. It's quite amazing.

We've become very self-aware within the past few years about this.

I like what you said about the fact that you had progressed in your careers. And you had the nice accoutrements of things. You had the cars and the house, but when you look in the bank, when you literally say, what do we have? What do we have? It wasn't matching up to what your expectations were. I think that's really powerful. Okay, so you had this conversation. What did you do next?

We took out a 401(k) loan.

Huh.

Yeah, I know.

Okay. I had found my book by then. Okay, fine.

We did, just to be honest, we took out a 401(k) loan. We basically put our credit cards away. We're like, we're not using them at all. And we very aggressively decided to pay it off. We had probably close to $50,000 in credit card debt. We are down to $5,000 now.

Wow. Amazing. How's that feel?

Great.

Feels good. That's what I'm saying. It feels really good to be so close to green.

Yeah.

And nervous at the same time.

Nervous because what?

We have never had the education or the tools to know how to not put ourselves there. I think both of our families very much normalized not having money. Being in debt is very normal, and everybody is. So we don't know the right steps to not get back into that creep of just swiping the card and moving on with our day.

Okay, this is very helpful to know. Now, you took the hard look in the mirror and you said, "We got to change the way that we do." So you took the 401(k) loan, you started paying off the debt.

Yes.

Did you know when the debt was going to be paid off? Did you calculate that?

Yes. Yes, we had a plan. I think initially the 401(k) loan was for 18 months. We paid it off in 12.

You paid off the loan?

Yes. The loan is gone.

This is quite rare, by the way. So one of the reasons that nobody in the financial industry recommends people take a 401(k) loan is that people who take 401(k) loans often, sometimes, usually have bad financial habits. So they take the loan, they don't change their habits, and then they never pay the loan back. So they've basically screwed themselves today and tomorrow. So the fact that you paid it off is rare, very impressive. Don't do it again.

We don't want to. We did not want to.

I completely agree. It was a good option at the time. I'm glad we got a chance to pay it off early.

If that is one of the top five financial mistakes you make, okay, you fixed it. It's behind you.

Yes.

Are you married?

Yes.

Any kids?

One kid.

How old?

Six years old.

Six years old. Okay, got it. So you also sold your house, I understand.

Yes.

Okay. How much did you buy it for? How much did you sell it for?

We initially bought it for 169. We sold it for 289. Is that correct?

289. Yep, 289.

And then did you subtract out all the fees and transaction costs and stuff like that?

Yes. So we ended up making about $113,000 off the house.

Got it. Okay. All right. So you ended up with 100K in your bank account.

Yes.

Is that just sitting there right now?

Yes. In a HYSA.

Whoa. What does that feel like?

Very intimidating. I never even activated the card for that account because I don't want to be tempted to spend it.

So you're kind of creating these behaviors to shield yourself from yourself.

Correct.

Both of you?

Yes.

Yes. We both have access to that SoFi account. I'm not touching it.

Yep, we're just not touching it.

Okay. I don't mind that. I don't mind it. I would like you to get to the point where you trust yourselves.

Sure.

But I understand that right now you're a little wary of yourselves.

Yes.

Look, if you're sitting here saying, "Boohoo, what am I going to do with an extra $100,000?" I get that. But consider this. They make $150,000 or $160,000 a year. It is very reasonable for a couple making that much to eventually have $100,000 liquid, just as it is going to be for you to have more money in a savings account and an investment account than you ever thought possible when you're following my system.

So I want you to pay attention to this and not dismiss it, because whether it's today, tomorrow, next year, or 10 years from now, you are going to have more money than you ever thought possible. And you may not realize it, but you are probably going to feel the same way about money then that you do now. So pay attention, because this is your future and you can apply what you learn today.

I want to understand a little bit more about how money works in your relationship. Take me through how the money flows. Do you both work? Where does the money go? What happens?

Sure. So we do both work. We've always just put our money together in one account historically, and all of our money just goes to all of our bills.

And how do you decide on what you spend money on? And I'm talking about for the entirety of your relationship, not just the last three years.

We just swipe the card.

Okay. So groceries, eating out, trips.

No budget. Yep. We don't talk about it. We just swipe.

It's in there. We get it. We get it.

And then what happens once the bills come?

Well, I think luckily we've never been in a position where we don't have the money to pay our bills.

Well, you were in credit card debt.

But it was never for bills.

Oh, what was it for?

Very mindless spending.

Yeah.

What? That's bills.

We made it bills. We made debt normal. So vacation, debt. Little purchases, odds and ends, things, debt.

Okay. And it added up to—

And I guess our habit was just paying the minimum payment. So in our head, we are paying it off.

Got it. And just so I understand, do you see trips or groceries or whatever not as bills?

I guess I don't.

Yeah. It's interesting.

In my head, I think it's more mortgage, car payment, utilities.

Okay. Interesting. I would say I see all of it as bills. Mortgage, Fritos, any of it, right? Disneyland, it's all bills. Some of them are static, they're automatic. Some of them are variable because we're charging different amounts, but at the end of the month, they all transform like a fairy tale. They all end up being bills.

Sure.

And then I got to find a way to pay them off. Okay. So you essentially didn't track most of your spending except for the big ones. And was there ever disagreements about spending?

I would say on a very minor level. For me, when we go grocery shopping, I'm a huge, let's find the best deals. I'm going to coupon cut everything, where he will just go without any thought to it and just buy whatever it is.

So in general, when we look at your entire relationship with money, would you say you are frugal, extravagant? What do you focus on? What's your thing? For example, I tend to spend money on convenience. That's my thing. What is it for you?

For me, it would be clothing and beauty products and jewelry.

Got it. Self-care.

Yes.

Okay, cool. That's your money dial. Okay, Mason, what about for you?

I do like to get out of the house. We work from home, so getting out and being able to go eat somewhere at some of the restaurants we have in our area. I like to do that. It's something that we can do all together. It's something specifically for my son, something specifically for her.

What would be an example? Because it's like going to the park or going to Disney World for seven days.

We definitely do Disney World. So definitely a big fan of—

How many times a year?

We have annual passes.

We go all the time.

How much is that these days?

About $3,000.

About $3,000 for all three of us to go.

Oh, total. All the time.

Total.

Okay. $3,000. That is just the park passes.

Correct.

Okay. Do you do the thing where, because you have annual passes, you go for two hours and you're just like, "All right"?

Absolutely. I'll get off work, do a ride, go. We get to fully enjoy it and not have to be exhausted at the end of the day.

Wow. Okay. You mentioned that you are afraid of going back to mindless spending. Tell me a little bit more about that.

We have really bad habits. Just going to the mall, mini shopping spree, just buying things that we see that we want. Just going to Target, going in there for no reason and coming out spending $200, $300. Extravagant dinners for a date night, and then, well, when we're done with that, let's go bar hopping and just running up bills.

What's an example of something you buy that's kind of expensive and kind of mindless?

Botox.

Okay. How much does that cost, anyway?

I don't get a ton. So maybe $200.

200 per what?

Three months.

For three months. Okay. All right. Well, look, I never saw a line of Botox in a CSP, but I love it. Why not? All right. You spend on the mall, spend on eating out, and just to give me a sense of a date night, walk me through that.

Sure. So, have to hire a babysitter. So that's the first. Usually it's going to be for a good five, six hours. We'll make a dinner reservation. Dinner is going to cost $200, $250. We're not ready to go home yet, so let's go somewhere else. Let's go try out this bar that we've been looking into. So we'll go there, get a few drinks. Maybe we'll go to another one, or we'll go out with friends and meet up with them. And then that just gets way more expensive because we stay out later with them.

And then in your own relationship, the two of you, is one of you like, "Hey, we maybe shouldn't do that"? Or are you the opposite where you're both like, "Yeah, I get it. Let's get that. You should get that"? Are you hyping each other up?

We egg each other on a lot when it comes to purchases.

Just get it. You like it, you should get it.

I would agree with that. Yeah.

You look good in it. We should.

Both of us.

Got it. Can you think of a time where you were not on the same page about money?

I think our timelines of maybe buying a house are different.

We have sold a house, so now we have money from that. Do we want to buy a house immediately? Do we want to continue to rent to explore the area? We don't know. I'm on the

Latter side of that. I want to wait and explore. You also want a house because that's part of your rich life. And that's fine.

Okay. I like that.

Have you had a discussion about exact timelines?

Initially, we were thinking when we moved to Florida, it was going to be within a year. I think now that we're almost close to the year, we've set that expectation that it's not the right idea. I personally would like to do it within the next five years. He's more open-minded to it, just based off of how our finances look.

Oh, good.

Mhm.

Yeah. Biggest purchase of your life. Finances should be—

Yes.

Probably the number one, maybe the number two decision. Okay. Good to know. What's the plan for the 100K?

Initially, it was to buy a house, and then I think we realized that if we just put that down as a down payment, we'd be back to not having any savings.

What? I thought that you're always supposed to buy a house immediately.

Well, that's what our realtor was trying to get us to do.

The realtor.

I know they're not our friends.

They're not your friend. Your realtor, they might be nice. They might buy you a nice lunch, but they are there to make a commission. I take a real—

That's how far I trust them.

They're there to do a job. You work for me. I'm going to be polite to you, but that's about it. We're not going to go watch a play together. All right. So, you realize that.

So, now it's just sitting there, and we really want to find out what we should do with it.

Okay. Did you ever think you'd have $100,000 just sitting in your account?

No. Never. Not until way later, after the house is paid off.

And way down the road. That's going to be much further down.

Like 20, 30 years from now, for sure. Now that we're out, we just don't know what the next step is for that because I agree. I think I want you to—I'd like to get you another house and into a backyard by the pool and all the things. But also it could be a good starting point for different financial aspects, different brokerage accounts or different avenues.

You mentioned something in the application about a business. Can you tell me about that?

Yeah, I had an idea about starting an arcade. There was a small 800, 900-foot underutilized building at the complex that we're actually staying in. And so I pitched them and sent them a letter of intent to rent the space and introduce an arcade.

Is this like an arcade with video games?

Yeah, just video games with the tap pass.

Got it. What do you think of this?

I think it was a good idea to help make some passive income because the way that the idea was set up was to make it staffless in a very high-volume vacation area. So, I was on board for the idea, but I think it was just throwing out the idea, man, I would love to get some passive capital with—

So, no plan. Got it.

I'm picking up a lot of clues that their relationship with money is not really that healthy. I'm hearing phrases like passive income, which can be a big sign of a dreamer. I don't like the phrase passive income because I know the truth about what it takes. This idea that's peddled online of you can just plop a quarter into some machine and it will just print out money passively for the rest of your life. Guys, that's not how it works. In order to generate passive income, it takes a lot of work and a lot of time. And much of the time, it doesn't even work. If your goal is passive income, to me, it's an immediate red flag because it means you're trying to effectively get rich quick.

So, as I'm getting these clues, I'm starting to wonder, are they actually in a healthy position or not? I'm actually really glad that we get a chance to talk because, if you remember, they were worried they were going to slip back into debt. And based on what I'm hearing, I think that might actually be a realistic possibility unless they make a change. We're going to look at the numbers right after this.

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I want to take a look at your numbers.

Sure.

What was it like to do the Conscious Spending Plan together?

It was eye-opening. I don't think we ever really sat down and looked at our numbers like that before.

Did you have any disagreements with each other?

When we were talking about it, I did see him going, "Oh, well, that doesn't matter." And I had to remind him that, "No, that is a monthly cost."

Oh, really? What's an example?

Some of the subscriptions. So, for example, the annual pass we have to Disney, he's like, "I mean, that doesn't have to go on there." And I had to remind him that that is a monthly cost that we pay on every month.

It makes sense now that you mentioned it. I was overlooking it, and it's a 12-month interest purchase, and that makes it a cost.

Yes.

Your instinctive reaction was, "That doesn't matter." Why was that your first reaction? Why wouldn't it matter?

Because maybe I knew that it was going to be paid off. The money is there in the account. So, in my mind, it's paid. And that's probably not the healthy way of looking at that.

Still being—

Yeah, that's not the right way to look at it, but I like how honest you're both being because you have these very interesting mental contortions that you use. And I'm not coming down on you at all. I think it's interesting to learn more about ourselves. So, for example, Becca, originally you go, "Eating out is not a bill," right? It's a bill. And our $3,000-a-year Disney payment doesn't count because we have the money. It counts.

So, I want you to start to shine a light, almost like you're putting on one of those headlamps, right? And you're just looking at our own beliefs. And sometimes you might interrogate your own beliefs. Often you interrogate your partner's beliefs because it's easier to see someone else's. But what I want to model for you is that it doesn't have to be like, "You're stupid," or, "You're a bad person." It's just like, "Whoa, isn't that interesting? What do you mean by that? Oh, how come you think about it like that?"

Mhm.

You're going to discover hundreds of these little contortions that you do as you start to embrace a new chapter of your money.

Sure.

Okay, let's take a look at the numbers. Mason, can you read off the word in bold and then the number next to it?

Assets at $11,000. We have investments of $204,867. We have savings at $124,300. Debt, $13,600, for a total net worth of $326,567.

Okay. What do you think about those numbers?

I know we've had debt holding or staying, but it's now such a low number.

Mhm.

I want to make it zero.

Okay. And keep it zero.

We could definitely make it zero. If you just look at the savings versus the debt, you could do that while we're sitting here if you want.

That's what we were talking, if we should just wipe it out at this point.

We can talk about that for sure. You will walk out of here having a clear decision on that. I promise you. Okay. And Becca, what do you think about these numbers?

I feel a lot better about it than what I did this time last year.

Ooh. Why is that?

Because we actually have a real savings at this point. Seeing our investments, so the 401(k) and the pension, the Roth that we have, makes me feel a lot more comfortable than where I thought we were because I wasn't looking at it. I didn't know how much we had in those accounts.

What did you think was in there?

Probably about $60,000 is what I thought.

And it's $204,000.

Yes.

We are so funny when it comes to money. We go most of our lives agonizing. You mentioned that you cut coupons at the grocery store. And I'm just imagining sitting there looking on your app, going to the grocery store like, "Oh, I saved $1.29 on green beans." And meanwhile you have more than triple the amount you thought in investments.

Right.

So this is good to know. It's good for you to see almost the hilarity of how we behave because that will help you change the way you behave. Your savings at $124,000, is that 100K from the house?

The 100K is from the house, and then we've been consistently saving each month as well.

How long you been doing that?

I started actually putting away savings into an HYSA two years ago.

Wow.

And I'll do $1,000 a month.

How did you decide on that amount?

When we started paying off our debt and getting really into making sure we're not just overspending on mindless stuff, I looked at how much I was making compared to the bills we had at the time and went, "Okay, I can take $500 from each paycheck, and if it's just going out and not in my spending account, I know I can live without that money." So, I've continued that. I would like to eventually do more than that.

Good. That's a very healthy way to do it. It's like, "I'm putting the money away."

Yes.

I'm not even going to see it, and then, believe it or not, you live.

I don't need it.

You don't need it. It is crazy. Very common when people are really tight. Maybe they have a lower income or their bills are high. They go, "Ramit, this stuff is impractical. I can't even save $50 a month." I go, "Try it. Try it with 20. Just have it automatically set aside. You will not miss it."

Right.

Great work. After two years, you have $24,000 saved. That's great. All right, let's keep going. Becca, can you read off your gross combined monthly income, please?

Sure. $13,256.

Okay. For a household annual income of $159,000. Let's look at the rest of the numbers here. Fixed costs, what's that percentage?

71%.

What do you think about that?

It needs to go lower.

Agreed. It's high. We'll go down to investments. What's the number?

$200.

$200 or 2%.

2%. Savings, what number?

13%.

That's pretty good. That's that $1,000.

Yes.

And then you have an HSA.

Yes.

Good. And you're putting $380 away. Out of curiosity, are you investing that money?

I wanted to wait to come on the show and ask you what to do because anything over $1,000 can be invested. I'm there now.

Okay. We'll talk about that. Good. Health savings accounts are awesome accounts. I'm glad you have one. And then finally, guilt-free spending at 14% or $1,442. Is this accurate?

Yes.

It's just about. There's also a miscellaneous line that I think will take a lot of things out too.

Yeah.

I think combined between those two, I think that is very high.

And your Disney stuff, where did you count that?

In the subscriptions is where I put it. That looks really high, but that's part of where I put that.

Good. That's exactly where it should go. Okay. Totally. It must be important because you made it a fixed cost. So, I'm assuming you're going to do Disney every year.

Ideally.

Okay. Cool. Shall we dive into the fixed costs? So, we're at 71%. We like to see this number between 50 to 60%. Let's look at your rent, which is $2,550.

Yes.

That's pretty good.

That's good. It is. We found a good spot when we moved. It was also fully furnished, so we got to just move right in. It was a really good dream. It was.

Listen up, America. We need more furnished apartments. People don't want to have to buy a bunch of furniture now. I love a furnished apartment. All right. Car payment, $765. One car payment.

That's one car payment.

It's a—

It's a Honda Pilot.

Good car. Good. $765 includes gas?

No.

I would say it doesn't include gas. We also work from home, so we're traveling.

Our gas costs are very low. I would say maybe $100 a month.

All right. I'm going to add it here. Okay.

Okay.

Wait. So, what else are you missing if you didn't include gas here? Because this is a big tip-off. If you didn't include gas, what else did you not include?

Maintenance.

The maintenance on it.

I'll make it $125. Besides the car, what else are you not including in this Conscious Spending Plan?

Honestly, I think I was thinking gas was under miscellaneous in my car.

Yeah, see, this is what people do. They see the miscellaneous and they treat it like a junk drawer. "Ah, it's covered in there." No, miscellaneous is for the stuff you did not count even though you tried to count everything else. Another mindset shift I want you to have. Right. So, let's just quickly run through this here. Groceries at $800. Is that accurate?

It is.

Okay. Clothes at $250. Y'all, you got some nice clothes on. You're telling me 200 bucks, $250 a month gets that? I don't know if I believe that.

I don't buy often. I sell my clothes, and I sell this stuff.

Money to buy more clothes.

Come on. I know how much you get when you sell your clothes. It's like pennies on the dollar.

It's not a ton.

All right.

But—

That doesn't—

I kind of help myself with that.

Yeah. All right. Let me ask a question. When you had that conversation three years

Ago and you took a hard look in the mirror, what spending changes did you make?

During that time where we were aggressively paying off the debt? We were not buying clothes. We were not going out on date nights.

When we paid that off and we moved, we started creeping back up on some spending there because we felt a little bit more comfortable in doing that.

Okay. I don't mind a little bit of increased spending. I do mind it if it is mindless.

Sure.

Where is it today?

Better than it was, but there's still mindless spending. 100%.

Cool. Subscriptions are at 605. So, we have the Disneyland. What else do we have?

I also put in my son's extracurricular activities there. And then there's a meal service. Amazon, Prime, Audible, Spotify, some little odds and ends.

How much is the meal delivery?

$100.

$100 a month.

Okay. And then miscellaneous, which is $1,05. So that's your catch-all.

Yes.

What do you think falls under that?

The haircuts.

Right. I agree. I think any self-care is probably in here. And I think that would be hair, massage, nails, trainer, whatever it may be. There's a lot of stuff that I think falls in here. I suspect it's probably higher than $1,000. What do you think?

Depends on the month. I think it can be.

I don't know. We were trying really hard to pick out what else that could include.

Do you track your spending?

No.

No. Okay. Did you track it when you were paying the debt down?

We still weren't tracking it very well.

Wow.

We were just not doing stuff.

I think I understand your numbers now. I have some other questions I want to ask you. There was a note in your Conscious Spending Plan next to the investments that said day trading pre-market. What does that mean?

So, that is me. I do have a brokerage account. I do trade out of it. I do trade a small account. It's under $1,000. While I don't want to lose it or day trade it away, it's all I will have to use for this account.

1,000.

I started with $1,000. Yeah.

What is it now?

600. So, not doing hot.

Okay.

But it's also learning out. This is all a year into the plan or the strategy.

Got it. Did the two of you talk about this?

Yes. I was aware. I was open to him trying it out. I think in my head was, if it's something he could learn and be able to be successful at it, I don't see the issue in it.

Got it. And what if it went to zero? What would you do?

If it went to zero, I would no longer be able to trade for that time frame. I'd try to keep it from January to December.

And after that, what would you do?

I guess reassess. How was my skill? Well, if I took it to zero, not great. So, maybe I should stop.

It's pretty honest. All right. Okay. Got it.

You have to pay attention to what people say and how they say it because when I'm looking at the numbers, they look okay. Couple, I'm talking to them. They seem great. But then I start hearing little phrases that are making my antenna go up. Like Mason goes, "Yeah, I don't buy much, but when I do, it's on sale." Filing that away. Becca goes, "I like to go shopping. I sort of swipe. We don't really think about it at all." Filing that away. My question is, where did this money behavior come from? Right after this, we're going to find out.

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Let me understand how you both built your relationship with money. Becca, what do you remember your family saying about money when you were young?

I had separated parents and they didn't talk a lot about money, but I could tell even as a kid, we didn't have a ton of money. We got our necessities, not a lot of our wants. And I remember, we'd go to our dad to say, "Hey, I want this." He goes, "I give your mom enough money each month. She can get that." So we asked my mom and she goes, "That money went to bills. I don't have money for that." So I knew we didn't have money, but there was really no discussion outside of that about money.

What do you take away from dad tossing the ball to mom, mom telling you that the bill? What do you make of that?

That neither one of them wanted to take responsibility for it.

And you mentioned that everybody in your life has normalized having debt.

Yes.

Tell me about that.

Yeah, I did not grow up in an environment that was wealthy by any means. I think everyone normalized that because that's how they got by.

What did they say?

That we work hard, but sometimes we don't have enough money to make ends meet. So, we put it on a credit card. So, it was very normalized in my environment to not have a lot of money.

Got it. Okay. So, let's fast forward to you getting a little bit older. You're a teenager. Did your relationship with money change at all?

When I was 16, I got a job and I think that was the first time in my life I was ever actually able to get things that I wanted because I was able to start buying them. But I was fairly responsible with it back then. I saved half of my paycheck up until I was 18. So, I bought my own car. I was able to pay for two years of my college with it. I think the issue was I turned 18 and went wild and didn't try to uphold what I was doing with saving money.

So, you were saving from 16 to 18. Where'd you learn that?

I don't know. Actually, I went and opened up a bank account and maybe the lady there told me that was a good idea. I have no idea.

That's interesting. Mom or dad ever tell you to save?

No.

Did you ever talk about investing, debt, any of that?

No. No advice at all.

You said at 18 you started spending your money. You called it going wild.

Yeah.

What'd you spend it on?

Parties. Trying not to live at home. So, apartments. Just utilized everything I could just to not go back home.

Got it. Credit cards?

I did start those when I was probably about 21.

Okay. Did you finish college?

I did not.

Okay. So, what happened after you left college?

I started working full-time and I got an apartment and just started paying my bills.

Did you save anything?

No.

How'd you go from 16 saving to not saving?

I think in my head I had time. I was, I can spend this money now because I have so much time.

So, I'm young. I'm going out. I'll deal with the saving stuff later.

Right.

Okay. Did you have anybody in your group of friends that was financially savvy?

I don't think we did until our late 20s. And I think that actually was what got my mind started going, "Oh, these people are my age. They're doing well with money. They know what they're doing. Why am I not doing that?"

How did you know that they were doing well?

We would talk about it.

Really?

Yeah.

This is both of you. Okay. These are friends. What'd you say to them?

Well, I ask them advice. We would get into conversations and ask what they were doing or how they did it. And they'd talk about saving money. They'd talk about how they would split up their bills with their spouse, and talk about not doing the mindless spending that we do.

It's quite interesting hearing your journey. Did you grow up religious?

I did.

Still religious?

No.

I see. At what age did you maybe step out of religion?

About 26.

What was going on then?

I just started going on a deep dive of really looking into what I grew up thinking and realizing I don't agree with that anymore.

I see. And as part of that journey, what other parts of your life did you reexamine?

I became a whole different person. I feel like in that time frame, I just started realizing the person I was was not who I wanted to be.

Wow.

And I think this financial piece kind of came with it too, because it really made me realize who do I want to be and where do I want to go, and not living a life that other people told me I had to live.

Tell me more. I'm very fascinated.

Sure. I think growing up religious, and then I think just kind of the environment I grew up in too, with my mom, you work really hard but you really have nothing to pay off for it. She doesn't take big chances on anything. In her mind, I'm supposed to work 40 hours a week, go home, not do anything else. And I realized I was missing something in my life and it's because I was mirroring the way that she lived her life and that's not how I wanted to live it.

I think there was a lot of judgment from her or even people that we grew up with in a religious standpoint, in church and everything. And I really started to realize their opinions did not matter of me. And to make me happy, I need to start living the life that I truly want to live instead.

And you were married at this point.

We were. Yeah.

I'm going to come to you, Mason, but were you religious as well? Did you grow up religious?

We met at church.

Grew up religious. Yeah.

And are you still religious?

I'm not.

Same time period where you had this realization?

Maybe a little bit earlier, but generally.

Wow. This is very rare. It's not rare for people to change their views on religion, but in a married couple that met at church, to go through the journey together. And it's no surprise. That's why I kind of got a clue that there may have been something going on with religion, because to change your entire relationship with money in your 20s by asking friends and listening suggests there's something else going on.

Wow.

What money messages that you grew up with do you think you are still bringing to this relationship today?

I think I for so long just thought I wasn't going to be rich. I thought that was just reality. I thought everybody's poor because everybody around me is poor. So I think I haven't found that confidence yet to know that I don't have to be that way.

Wow. It's interesting. It kind of shows up in your Conscious Spending Plan. The spending on certain things without tracking it carefully, that is indicative of somebody who's like, "Yeah, I'm not going to be wealthy."

Yeah.

Like little old me. But actually, you very well could be.

Yes.

When I think about how Becca grew up with money, I think about a sponge. Just someone absorbing the lessons learned but not really knowing how to make sense of what's going on. When you're a child, you don't understand how money works. And for so many guests, including Becca, their parents don't tell them anything about money. Oh, sure, they might leak out stress and anxiety, but they're rarely talking about savings and investing and different tax vehicles. No, it's just like we don't have money. So, what are we to make of that as children?

Many of us are consumed with scarcity. Many of us might save a little bit of money and then spend it all in a single night or in a month. Becca did something interesting. She became pretty responsible with her savings. She saved half of her money. And when I ask her, "Where'd you get that idea from?" "I don't know. Maybe the lady at the bank." And then she goes on just a couple years later to spend all of it.

I am begging all the parents who watch this show, stop trying to protect your children with money. You are not protecting them by not talking about money. Money is not something that is an evil monster. It's actually something you need to engage with and discuss, even if you have made mistakes in your own life. I wish Becca had been better trained with money. It would have put her in a completely different place, but to her credit, she has found that place pretty much on her own.

Tell me about how you grew up with money. What do you remember your family saying, Mason, about money?

Good question. I also came from a family of divorced parents, so money was always tight on both sides. I don't remember openly having money discussions about this. But as a kid, you just notice things. So, you notice the car changes or the furniture going away or garage sales and moving all the time, and you realize these things.

So, money messages and things from how I grew up, it was all self-taught. And it wasn't great. I didn't have great habits in saving or spending until I got into a serious relationship with her. And that made me want to change all of that.

Furniture going away. What's that about?

Yeah. I got to see my dad struggle through the divorce. There was a lot of changes to the house and selling that, and what we would come over and visit and sleep on and stay on. Almost being on the verge of cards being cancelled or bankruptcy or losing a house and things that you will see. That was all normalized to me and I don't think I ever want to be in that position or show that I'm in that position to our son.

So, if I can read between the lines, tell me if this is accurate. Your parents separated. What age were you?

12.

Okay. That's a tough age. And sounds like your dad had to downsize. You go to his place. It's probably smaller. Not as much furniture.

Sure.

Not as comfortable.

100%.

What did you feel at that moment as a 12-year-old? You're pretty smart at 12.

You get to grow up fast, which you learn to try to do the next steps of, do I have to start helping my sisters? Do I have to start dropping extracurriculars and sports and things? Yeah, it was a big drawback.

Right. And did you start hearing more about money at that point? Because presumably money's got to be tighter for both parents.

Again, it wasn't a lot of open

Discussion about finance. One thing I do distinctly notice or remember is my mother constantly checking the books and having pages and pages of bills and scrolling through them and filling out all these things. That to me was how bills were handled.

You struggle over them and you stress over them and then the next month you do it again.

Yeah, that's pretty clear. I think a lot of people believe that you struggle. And who struggles? Mom struggles.

Sure. She struggled. She also went back to school and put herself through school with three kids and got in better spots. So I learned that you can get out of those certain scenarios.

Wow.

I also watched my dad not do that and slide different directions.

Really, what was your takeaway from that differential?

My takeaway was you can work hard and get out of where you are, and that's what my mother did. So that was the work ethic I learned.

Okay. Do the two of you as a couple have role models? Folks that you look to, you get inspired by when it comes to money, when it comes to parenting, when it comes to relationships. I'm seeing a quiet realization on both of your faces right now.

I don't think I have one.

Wow. That's honest.

I actually think that it explains a lot. And if anything, if I were in your position, I'm thinking, wow, I'm proud of how far we have come, the transition we've made as a couple, because we don't really have anybody who's guiding us. We had to figure this stuff out on our own.

So I think that's quite powerful. You could turn that narrative into, oh my God, this sucks. We don't have anybody around us. Or, wow, look how far we've come despite it. And now that we realize it, our next goal is to find a couple who we really respect and want to learn from.

Sure.

Take that mindset you've already got, make it bigger and more explicit.

Okay.

Mason and Becca both grew up with money scarcity. And interestingly, when people grow up with scarcity, I find that they can go one of two directions. One, they can become even more scarce about money: protective, worried, anxious. Or the other direction, they basically spend it all because they go, "Finally, I have some money and I'm going to spend it." The key is you cannot predict which direction they are going to go. And with Mason and Becca, when they met, especially for the early part of their relationship, they both decided to go the spending route.

What kind of financial future do you want for your son?

I want him to be able to be successful in money management from day one when he becomes an adult, but I don't want him to have to go through what we did, which was living very paycheck to paycheck. I would like to be able to set him up and be comfortable.

What if he turned 18 and he opens up his checking account, there's $100,000 in it? What would you teach him to do?

Well, my hope would be to invest it, to be able to really think about how he could really utilize that money for his future instead of just mindlessly spending it.

Well, we have a great opportunity because his parents happen to have $100,000.

Yes.

And to your credit, you are not immediately spending it, right? I really respect that you have put it aside while you learn so that you use it thoughtfully.

Sure.

I want to talk about what you want to do with your money. Yes, the 100K, that too, but just in general, what kind of life do you want to live?

Dream home. Several vacations a year, have family vacations and then one-on-one vacations. Date nights often. Being able to maintain our social life without feeling stretched thin for that. Being able to go shopping and not feel like we're overspending in that amount. But overall too, just not have the anxiety that I have every single day.

You still have it?

I do.

Okay.

Mhm.

Mason, how about you?

Definitely owning a home and with some of your requests, a pool. I think that's got to be there. Not worrying about the spending because it's something that I can afford. Maybe not the nicest things that are out there, but definitely nicer. I want to set up my son to mirror how we are with our money once we get in a good spot. And so far, we're really close to that good spot.

Okay, nice. I don't know the exact number here, but for the type of lifestyle that the two of you talked about, what kind of income do you think you would need to comfortably be able to do that?

$250,000 at least.

$250,000, maybe $300,000. I think that'd be a great goal.

Yeah. The type of lifestyle you're talking about is probably $300,000, $350,000 a year in your area.

Okay.

So, at $350,000, you're making 160K right now. What does it tell you?

We need to make more.

If you want to live that life, you would need to increase your income. I agree. Do you need to do that tomorrow?

No.

No. So, you got time. Plenty. Think of how much you've changed in the last five years. Oh my God. If you continue that stretch, you have time. Then the question becomes, hey, if we want to live a lifestyle that's going to take X years, it's going to require us, one, doubling, tripling, whatever our salary, which is obviously a lot of work and good luck. Do we want all of those things? What do you think?

I would.

Okay.

If we had the means, of course, I would love to.

But I'm saying it takes a lot of work.

I'm fine with that.

Okay.

I think we're great hard workers. I think it's just not always knowing where to go from here.

Nice.

We'll work very hard to get to what we want. We always have.

I believe that. I love that. That's a very interesting answer. I don't hear that as often as you would think. "Yes, I do. I want that."

Yeah. And I'm willing to work. I already have plans to up my career, so I know I can get to those goals that I want to do.

Great. What do you do for a living?

I'm an HR manager.

Great. And Mason?

I work customer service for an energy company.

Great. Okay. I want to help you position yourselves with your money for building real wealth, right? So that you can live the type of rich life that you envision. And part of this is going to be changing your mindset, but we actually have to do the numbers as well. So I would like to try to get these fixed costs down. If we can get them down, then we can redirect more of that money towards investments, savings, etc.

Definitely.

Sure.

That's why we thought about knocking out that debt because we're aggressively paying it. So it's $588 a month.

Should we just assume you're going to pay it off today? Okay. So if you paid it off with money from your savings, that would be $13,600, which is negligible because you have $124,000 in savings. You paid it off. That makes this monthly debt payment what?

Zero.

Zero. Watch what happens to the CSP. Whoa. It just went from 73 to 66%.

Yeah.

Big jump.

Love that.

So, pay it off.

Yeah.

Fine. Great. I'm jokingly being a bit flippant about it, but let me tell you why, so you know why. You have $124,000 in savings, liquid savings. That means you have more than 12 months. You're done. Your emergency fund is filled up. You're good.

So, yes, I would like for you to save for more stuff because you like to spend money on trips and stuff like that. So we'll do that. But y'all do not need to be putting more money in your emergency fund, which is $1,000, $1,000 a month.

So, look at how it's cascading. You paid off the debt. You paid off the debt because you have enough in your emergency fund. Now you don't have to pay any debt. Now you don't have to put money toward your emergency fund. It starts to really work together like a puzzle.

Sure.

Okay. What else should we do here?

The miscellaneous.

Yeah.

Needs to go.

Yeah. It can't go all the way.

Sure.

But it probably needs to get under control. How would you get it under control?

One, I think we need to actually look at what we're spending.

Yes.

And really finding those hidden costs that we probably didn't think about.

Yes.

And then looking at certain things that we're doing, and do we actually need it?

So, let's pick an example. What is a very likely sizable cost that you're not thinking of here?

Like the hair, hair cost.

How much? Let's approximate. How many times a month or year do you get a haircut?

I will go get my hair done about every six weeks.

Every six weeks. And that's whatever relating to hair, cut, color, style, all that.

Yeah.

Okay. Every six weeks. How about for you, Mason?

If I can, every two weeks, me and my son, it's about $65. So we can call it $120.

$128. Okay. Got it. And how about for you?

About $300 every six weeks.

Got it. Okay. So we're talking thousands of dollars per year, right? It's a lot.

Yep.

Knowing that, worth it.

Yeah.

Knowing how much you spend on bell peppers.

Yeah.

Whatever, it rolls into the grocery. Okay. So, yeah, I can tell you have thousands and thousands of unaccounted-for dollars.

Yes. Get that tracking.

Okay. So you might be like, "Hey, hair is important to me every six weeks." Cool. But then what are we not doing? Maybe it means we're not doing as frequent of a date night.

Sure.

It's up to you.

Mhm.

What is the actual function of that? Do you set aside from a paycheck, you deposit $100 into a separate account, and then that's now groceries account, and $100 in something else and now that's clothes?

Good question. So the automation part and the CSP work really nicely together. Here's the way I do it. So we know how much we have set aside for groceries every month. Okay, let's just say for easy math it's 500 bucks. We don't need a grocery account. We just have the money in our paycheck, which goes to our checking, which then the money is automatically disbursed. We know that when we go to the grocery store, we're swiping on our credit card and that credit card gets paid off by the checking. So we make sure that we have enough money in that checking account to cover the groceries and other bills. Okay?

So you work backwards. How much are we going to be spending every month? Those things are mostly coming out of checking. Let's make sure that we have enough in checking.

Bringing focus to it would help a lot.

Yeah. I think right now what I'm hearing, it's better than it used to be for the two of you.

Yes.

You used to just swipe, but now to get to the next level you have to first identify all the major categories, and then second you have to actually put numbers around them. And those numbers are your fingerprint. It tells me what's important to you.

So right now when I look at this, your fixed costs look a bit generic. They look like everybody else. But actually, when I see you all walk in here and you look very nice, I go, "Oh, they like clothes." Clothes should be dialed in. Self-care should be dialed in. That's actually nothing to apologize for. If you saw ours, you could instantly tell what kind of people we are. We love traveling. We don't care about a car. You would instantly be able to tell. I want that level of bespoke nature for your CSP.

I want that.

Okay. All right. You said you want to bring the number down. Let's approximate it. So right now your miscellaneous is $917 a month. I feel that's pretty high. What would you like to bring that number down to?

I'll say $500.

Okay, we're going to just eliminate this. You're at $523. You're down to 63%.

Nice.

Closer.

I think we could get the groceries down.

Mhm. Shall we bring it down $100? I don't want to be too crazy.

I think $100 would be a good start.

All right. And you can always adjust that down.

Agree.

Because we have a meal service too. So I really think we could bring it down to $600.

Yeah. Let's cut our lunch.

Yes.

Okay. I love the aggression. This is the energy I like to see. Okay, let's look. Whoa! We're at 61%.

We're close.

Honestly amazing. Do you want to just get to 60?

Yes.

I'll make a couple suggestions from what you told me. Okay. You told me about your subscriptions. You have the Disney thing. It sounds like that's important to you. Let's keep it. But you mentioned Audible, Amazon D. Could there be one where you just go, "Hey, we got plenty of others. Not for us"?

I think so.

I totally think so. I think Audible can definitely go out.

I think we can easily cut down 40 bucks, 50 bucks on that.

Okay, let's take it to $125.

Okay.

There we go. All right, round of applause. This is actually amazing. What's most amazing to me is not just the numbers. It is the approach that you're both taking. You know how you told me you hype each other up to spend? I'm actually seeing you do the same thing, but in the opposite direction. You're aligned. This is the energy you bring that a wealthy couple brings together. It's not you against me. It's this is what we want for our life. Let's figure it out together. You are a true team.

That's what we always strive to be.

I love it. Okay. So according to this, you have $2,634 a month, or 25% of take-home pay, that you could currently spend on guilt-free spending. Now, I typically recommend 20 to 35%. I'm going to tell you why I think you should be somewhat towards the lower end of that.

I think that in the last five years, you have displayed a very rare ability to completely change the trajectory of your lives, money and otherwise. And to me, when someone has that skill, I'm like, let's go. Let's double down. Let's triple down because you can clearly do it. You clearly want a big rich life. And the age you are now, young, upwardly mobile with your income, I'm like, take advantage of it.

Later in life, you may have heavier burdens, expenses, things may come up, family, etc. But right now, it's like a golden age. So for me, whenever I see the golden age, I double down. Yes, I still go out and I have a nice time, but I take my money and I invest it. So you have $2,634 extra per month. And we know that it's a bit high right now to just be getting spent on stuff. So where would you reallocate this money for your rich life goals?

Investments.

Mhm. Let's pick an amount and see what happens.

$1,000.

Okay. $1,000 a month. I'm going to put it right here under stocks. $1,000 takes your number from 2% investments to 11%. This is post-tax. And let's go down and look at your guilt-free spending. You're now at what number?

15.

15%. That's pretty healthy. I'll tell you why, especially because you like nice things. Well, y'all are spending $3,000 a year on Disney. So we can call that guilt-free spending. That's pretty nice.

Sure.

So if I'm in your position, I'm going, I sure would like to be able to do, let's just say, four date nights a month. How come we can't? Why? Because we decided as a couple, we're going to cut down the amount of date nights and instead be able to go to Disney all the time. That's how we think about it. Nobody's chopping my arm off. Nobody's forcing me to not have date nights. We chose.

Yeah.

And this is what we decided as a couple.

Sure.

And if at the end of the year you go, we want to change our decision, there you go. Don't get the Disney pass. Cool.

Makes total sense.

Okay. I like seeing people take ownership of their decisions. I like that. And I can tell that you two are into that.

Yes.

Can we talk about your health savings account for a second? How much do you have in that account?

Just about $3,000.

$3,000. And how long have you had the HSA?

Oh man, probably seven or eight years. But the thing is I've always used it as just literally health money. So I didn't let it invest. I didn't let it grow. I didn't learn about those options until six months to a year ago.

It's a bit obscure, but it is an amazing account. Do you think that you will use the money in that health savings account for health-related expenses?

Occasionally. I don't think that amount.

Yeah, I now don't want to because our

Our health and costs are only going to be more expensive later in life.

Okay.

So, if I actually have an after-tax or tax-advantaged account to pull from, separate from retirement, separate from Social Security, I'd like to do that.

I love it. You could invest that money in typical low-cost index funds. It's quite amazing. You get a triple tax advantage and then you can use that later in life. You can cash it out if you want to use it in a year. Whatever you want. It's incredible.

I kind of want to up that to the maximum.

Very good. That's what I would do. So, let's do this. Let's take the 380. I'm just going to zero this out here. And I'm going to add 380 here because that HSA, we're going to consider it an investment.

Sure. Okay.

Okay. You're now investing $1,580 a month plus $845 a month. So, you're in the $2,700, $2,800 range per month. That's pretty good. We have $1,000 a month going to an emergency fund. We don't need that. But I do think you need savings to be built up for certain things.

Sure.

What are the big expenses that you foresee coming up?

The car payment is actually a lease. So we like the Honda, though. We like the car, so we kind of want to keep it.

Do you want to buy out the lease?

Yes, probably.

How much?

I think at the end of that it's going to be about 25,000.

I would create a savings account called lease buyout.

Okay.

And if you decide to buy it, you go right into that account and there you go.

Nice. I like it.

I do like that.

That's how you do it for all major purchases. And this is where you get to take control. What's a dream vacation spot you want to go to?

Bali.

Beautiful. Bali. So, you do the calculation. You go, all right, we want to take this trip. It's going to be like $10,000. Right now, we can afford to put X hundred a month. So, it's going to take us a year and a half. And they go, I don't want to wait a year and a half. So, what are our options? We could cut spending elsewhere and redirect to here. We could shrink the trip down so instead of 10,000, it's 5,000. Or we can just extend the time period and settle for 18 months, 24 months. What we don't do is just swipe it and then deal with it later.

Right.

We as a couple, we never do that. That's the kind of energy you bring, right?

For sure.

All right. $18,000. We are now calling this car buyout. And then, don't you need more money for something? Didn't you talk about a house?

Yeah.

Where's that?

Not in there.

What does that tell you?

We need to do something about it.

Okay.

Mhm.

So, what are your options? Let's be super creative before we start putting money aside. Your options are what?

Either save for it or get a huge loan for it.

Even if you got a huge loan, you would still have to put down tens of thousands of dollars.

Yeah. Is there an option to just save over years and years and outright buy?

That's another option. I like that. Good.

Not buy.

Not buy it. That's an option because that also gives you a lot of freedom to choose and explore different places and areas. Again, we don't have to commit to any of these. I just want to put all the options out on the table.

I love the vision, but because at least one of them is a dreamer, I need to ground this rich life vision and create a plan where they can make concrete trade-offs. You can't have it all on their income today. They cannot take four vacations. They cannot go to Disneyland. They cannot have all these clothes and eat out. They've got to prioritize, especially with big purchases like a house.

When I say prioritize, I mean some of the things they may want to do right now. They're like, "This is important to us. We're going to do it right now." Other things they may say, "We can delay that for 18 months or even 5 years, 10 years." Some of the things they may realize, when I'm looking at the numbers, that's actually not that important to us. So, kick it off the vision. That is how you go from fantasy to an actual plan. And that is what helps bring a dreamer down to reality. If I just let them fantasize about what their rich life is without an actual plan, they would walk out of here and go right back to the way they used to be.

So the rich life that you told me was a powerful vision. House with a pool, multiple vacations, date night, self-care. We have a very functioning CSP for your baseline. You're saving a bunch of money. You're investing a good amount of money. You have some money left over. Now, we got to make some trade-offs. So, I want you to tell me what changes you would like to make because as it stands, there's no house.

Right.

There's no vacation.

I think we can definitely cut down the guilt-free spending. We did it before. We made sacrifices in what we were spending. So, if we want to save up for the house, we can do that.

Tell me how much.

I think if we were going full rich life, I'd probably go more like an $800,000 house.

Where would the money come from?

It's a great question. Right now, it would be draining savings, maybe doing some kind of loan, something off of current retirement, which I don't want to touch anymore.

Okay.

That's the main reason why we paused on getting a house now, because I don't want to drain my savings.

Okay.

I don't want to be house poor.

For sure. You don't want to be house poor. Love seeing that in your application.

Yes.

Great. Okay. So, you don't want to use $110,000 of your savings for a down payment.

Right.

Do you want to use part of it?

I'd like to see what other options we could do when it comes to maybe investments. Is there anything we could ever do to get the down payment there?

So, when my wife and I were in our mid-30s, we asked each other, "Do we plan to buy a house anytime soon?" The answer was no. We didn't want to. So, I had some money for a down payment, invested it.

Okay.

And just said, "Look, we're not going to get a house in the next 5 years, probably not 10 years. So, let the money grow, and if one day we decide to buy a house, we will have more. We can either get a nicer house or put a bigger down payment down."

I would feel fine with that. I think realizing now house cost and what that really looks like, I think a five-year goal would be a really good pinpoint.

Minimum goal.

Minimum. Yes.

Okay. So, where would the money come from for the down payment?

We could take more money out of the guilt-free spending.

Let's say you could take 500 bucks out.

Yes.

All right. And we could put it in investments and we will call this house.

Does there need to be a specific account or a separate account for something for my son?

If you had to choose, which one is more important, buying the house or putting money aside for your son, which would it be?

I personally think the set-aside account.

Both.

I agree.

So if that's the case, then we are now making trade-offs because we can't have it all right now. So that house might not work. You might put the money aside for him instead.

Right.

Or split the difference. Is there a way of doing 800 towards an account for us and 200 for some kind of custodial or specific Roth?

You could. You could. How do you know if you can afford to save for your son? It's a provocative question, right? Because I think from your reaction, you never thought about that. You just assumed this is what we do.

Yes.

But how many other things have you deconstructed? Maybe we do, maybe not. What's going on underneath?

Mhm.

So, let's walk through it for a second. Most parents, they want to do something for their kids, obviously, financially. I get a ton of panicked messages every week on my Instagram DMs. "Hey Ramit, love your stuff. I'm 38 years old. We just had a son. He's one and a half. What account should I have for him? Is a 529 the right one?" And they're just frazzled. And I go, "Hey, congratulations. And before we talk about your son or your daughter, tell me about your finances." And you know what they always say? "Well, I actually started pretty late, so I don't really have much."

And what they're doing in essence is saying, "I've lost the game of money for myself, but I won't allow that to happen for my son." Any of this sound familiar?

I think that's very accurate. I think we're really big on him not having to live the life that we did.

Can I tell you what I see?

Mhm.

I see a couple that takes their kid to Disneyland a lot. So already you have put your son in a different position than you both ever were already. In addition, if you are talking to your son about money, if you are sharing things like saving, investing, "Hey, we flew across the country to learn more about money because it's important to both of us and we want you to understand it. Help us pay this bill. Click this link. We're going to go to the grocery store. We only have 10 bucks and we need to get these three things. Can you help me do it?" He is going to grow up with a hundred times more knowledge than either of you ever did.

So, I don't see a risk of him growing up like you. I would take that fear and set it aside.

Mhm.

You all already won that battle. Okay?

Sure.

Now, do you need to give him a bunch of money? I don't know. Maybe if you want to, we can find it. But I also want you all to think about your overall vision.

Yeah.

It would be nice to hand him $50,000. Fine. I don't mind that. Maybe we can make it happen. But when I think about generational wealth and stuff like that, my parents, they didn't give us a check. They didn't have it. But they taught us what investing is. They helped me open up a custodial account, encouraged me to get jobs, let me play, do all this stuff. And so they gave me way more than any check ever could. They gave me knowledge, and my siblings as well, so that we knew what good money management is.

I like those lessons way better.

Yeah. I don't know many 18-year-olds that would be responsible if you handed them a $50,000 check.

No way. No way. But they might know philosophy that their parents have. Like, in our household, we are a no-debt household. That's a philosophy. You could choose it or not. Once a month we all sit down and we do a formal presentation where we talk about money lessons learned and what we're going to do and what we are not going to do. You could learn that and he could walk away with those lessons, which are worth infinitely more than any amount of check you could write him.

Sure. Saving for a house could benefit all three of us at the end of the day, and as we grow in our careers and make more money, there's still that opportunity to save for him.

Yes, totally. That's a good way of looking at it. You don't have to make decisions for the rest of your lives today. Just for today, and then any upside, you can always adjust where your money goes.

Yeah.

I would like for you to get to the point where you got so much money in investments, etc., that you're like, "Well, I already hit those goals. Extra. Let's put it aside for him now."

Mhm.

That's the way you think about it. Your son has time. You have far less. He could take a loan out. It's not the worst thing in the world. You all cannot take a loan out for retirement.

Mhm.

So, we got to prioritize the two of you first. Okay. We've decided for now, it sounds like no money for him.

Okay.

Put the money towards the house. So, we're at 500 bucks a month, which will be $6,000 a year, which over five years will be 30K, but it will grow a little bit probably because of investment. So, maybe it turns into—I can't do the math off the top of my head—50K, whatever. What do you think?

It's still not enough, I think, for the house and lifestyle that we've chosen.

Correct. So, what would you do about that?

Figure out how to save some more.

Yeah.

Save more. Make more.

Make more. Let's talk about that for a second because I think there's a limit now. We're kind of reaching it. And I think it's starting to get a bit unrealistic. I don't really think the two of you can function the way you want to on $1,000 a month of guilt-free spending because all the money is pretty much spoken for, right?

Right.

So, there's only one real area to focus on, which is what?

Income.

So, can we talk about this for a second? Remember the lifestyle? You told me how much you'd approximately need to make.

Mhm.

What would you say? 300, 350, something like that.

Yeah.

How can you get there?

My goal is to excel in my career. I was looking at going back to school.

Mhm.

To get some higher-level roles than I am right now.

Okay. How about for you?

My company's pretty stock standard 3% year-over-year every year.

Got it. Okay. Okay.

I think I do have some opportunities when they do open up as far as different kind of supervisor roles. There's also sales positions that, while I'm not immediately equipped for, I'm not against learning. So, I think there are opportunities moving up within the corporate ladder.

Here's a couple of things I want to draw your attention towards because now that we've got a CSP that is somewhat standardized, rationalized, now I'm thinking about what kind of lifestyle you're going to have ongoing. What do you think would be the worst case for the two of you? Worst case, you walk out of here, you got this plan, and then what derails it?

Not following it.

Yep.

And just going back to our bad habits of spending.

Just spending, swiping without tracking it. Yep. What else?

Like a job loss.

Yep. That would be huge. That would be tough. You could sustain it for a long time, I will say, with your savings. That's really nice to have that. You could sustain that, but that would potentially derail you.

Sure.

So, when I hear you describe your money, especially where you came from, there are a few red flags I want to draw your attention towards. So the non-tracking was just like, okay, we swiped. I feel you have a pretty good handle on that now. But I do think the miscellaneous thing is a bit of a red flag and you have to get control of that. Each of you's got to own a couple of numbers and you both report on those at a monthly money meeting. It should be a formal thing like you do it at work. Take it seriously.

The other thing is I hear a bit of dreamer tendency, I think, from you, Mason. You agree?

I totally agree. So on the plane ride over here, was reading your book and calling me a dreamer, and I agree with this.

You're reading Money for Couples?

I've started reading it.

Okay. Why did you say that?

Because he very much just talks about things. He knows in his head, "I would love to get here," but there's no action to it.

What's an example?

I would say one, he dreams all the time about starting businesses, all the time. He comes up with all these ideas and he'll ruminate on it for months and then nothing happens.

What do you think about that?

Accurate. It's something I would like to start. I don't think I always want to work for a corporate ladder, but getting to the next point and either owning a small business or investments are starting to pay for themselves, I don't know that. It's very unknown for me.

Yeah. Yeah. Dreamer tendencies are very dangerous because they kind of exist in la-la land, and it's because often they are subsidized by somebody else. In this case, you're an interesting dreamer because you've transitioned to making some concrete plans. You've changed your spending behavior. So, I would say you're like a dreamer but dreamer adjacent. You're willing to change. It's very rare. Okay.

But you cannot be a dreamer if you want to live the kind of rich life the two of you describe. It simply can't happen. So I hear things in your application about a solar business. I hear about the arcade, day trading. All of them fit the dreamer dynamic. And that is a huge red flag.

Because one, it's hard for you because you're spending months coming up with these ideas, but two, it's hard for the two of you. Because the place you're going, where you've described with vacations and house and this and that, you actually both need to be rowing exactly the same direction. There cannot be any misalignment.

Power couple. That's what you need to be. So if one of you is dragging behind, that's a problem. If one of you is rowing the opposite direction, impossible to get where you're going. You see what I mean?

Totally.

Okay. Wow. I don't get the chance to talk to dreamers a lot because they don't come on the show. So I feel very honored right now. Can I give you some projections from your retirement? We have some projections just so you understand what the numbers look like. So when you walked in here, do you know how much you would have in retirement?

From what I did calculate, I think it was around $1.5 million.

$1.5 million total.

Yes. Well, I don't think that included the pension, right?

Yeah.

Oh, you have a pension?

He has a pension.

What? How much?

I think it's supposed to be like $800,000 at the end of the—

$800,000. How the did I not know about this?

If I was to retire with the company.

Oh, okay. Okay. How much would that—

You have either a lump sum or a payout or—

I love finding $800,000 in the couch cushions.

All right. Well, putting aside the pension, we calculate that you would have about $3.1 million when Mason turns 65. So $3.1 million is a lot of money. That's about $126,000 of safe withdrawal income that you could make per year.

It's a lot more comforting than I thought it would be.

I like it. $126,000 is good, but you wouldn't own a house. But on the other hand, you wouldn't need to invest anymore. You wouldn't really need to save anymore. So those costs would go down. You'd have Social Security in addition to that. It's not bad. Honestly, it's not bad.

The new strategy that we did where we cut some of your spending, got more aggressive on investments, that would yield you $4.7 million. It's a big difference from a few small changes.

Yeah.

And the safe withdrawal income is $188,000 a year. More than you earn today.

Yeah.

Yeah. Definitely a better goal.

More comfortable for our lifestyle.

I think so.

Yeah. What do you think? What's going through your head now about the decisions regarding vacations, saving for your son, and a house when you hear these numbers?

There's a good chance in this time period we'd want to up our lifestyle and then that won't be enough.

Agree. If I'm you, I'm trying to live a cooler lifestyle. I'm not trying to stay at this level or worse, go down. No way.

Yeah.

Okay. You don't want to go down. You don't even want to stay here stable. You want to elevate your lifestyle. Okay. So how are you going to do it?

Make more money.

Yes.

How will you do it specifically? You mentioned, Becca, going back to school.

Yes.

How much more are you going to make?

From my projection, I could eventually get up to $245,000 a year.

Really?

Yep. With certain levels of roles if I stayed with the same company.

No kidding. What's the job title that makes that?

A VP of HR.

Is it required that you have the degree?

Not necessarily with this company. If I ever wanted to look at other companies, though, it would make me a lot more competitive.

Okay. All right. Noted. What about for you, Mason?

Right now, I'm comfortable in the position I'm in, but I know it's not as fulfilling. It's not going to give me the pay scale that I would like.

You could absolutely put energy into the corporate ladder.

I like my co-workers, my upper management team. I can join them. Being the dreamer, I also like the idea of a potential day trading opportunity. I have seen someone make my salary in a day. I've also seen a ton of people opening businesses, and those owners start somewhere.

Yeah.

So, I don't know. I like the opportunities. I always see the successful side of it.

Well, that's by design. You see successful because the ones who lose their money disappear. That's survivorship bias. Okay. Let me give you a little bit of the stuff you can find in chapter six of my book where I talk about day traders, etc. They almost all lose their money, almost all of them. And I'm talking in the 98-plus-percent range.

So you are seeing some of the folks, kind of like seeing Michael Jordan playing basketball, being like, "Oh, I'd like to be like him." Well, yeah, me too, but I'm not. And so we're seeing these freak aberrations. And day trading sadly has a lot of lies because almost everybody loses money. It's notorious that they will go and erase their previous bets. They don't show you the things they've done. It's basically gambling. It is.

So I don't mind that you had 500 bucks or something that you're playing with. I think people can have a little bit of fun with their money. It could be self-care. It could be freaking day trading. The problem is that people who do that, they usually do not have containment. They go 500, then it turns to 1,000, it turns into recurring, turns into 5,000. And they really believe, "If I get this strategy, I'll do it." You will lose your money. It's simply a matter of time.

If the two of you want to live a rich life, then you all need to focus on increasing your income directly and dramatically. It is a priority because you can't get the other things you want. There's no real way to get the house right now based on the income you have.

Sure.

So the income's got to go way up.

I can definitely work with my management team and letting them know that I'm interested in the next position. There was another opportunity for a supervisor role that came up. Hours didn't work and the time frame didn't work for me, so I couldn't take it. But they do come up, and instead of watching the opportunity pass by, I can take it.

I like that. And whether it is at this company, hopefully it is, or another company, the two of you having a mission, which is like, "Hey, we want to live this awesome life, but we never want to go back to where we were. Never. I don't want to wait 30 years to be living this. So what do we need to do?" The only thing now beyond following through that matters is income.

Yes.

Sure. It's got to go up. And if it's me, I'm taking any dreamer stuff and I'm putting it aside. Keep doubling down on what works until you have literally scraped the meat off the bone, which means you basically are CEO. And if at a certain point you got so much money and so much free time, you go, "I really want to start a business," okay, try it then. But right now, I just see way too much upside in your careers.

Sure.

I think that's very accurate. For sure.

I'll just show you something. I'm going to put your CSP up on screen. What might we increase your income to, let's say, five years from now?

Hopefully, it would be at $10,000 a month.

Double.

Yes.

Amazing. Watch what happens to the rest of your numbers. You're at 60% fixed cost. What just happened?

Went down a lot.

Fixed cost dropped to 43%. If we go all the way down, you have $5,000 a month. Five years from now, you will have hundreds of thousands of dollars invested. You'll have a fat savings account. You'll have gone to Disney. You'll have taken a couple of vacations. Great. And you will be able to start putting money aside for a house.

Yeah.

Etc. You want to do yours, Mason? Five years from now, ballpark it.

Realistically, probably like 65.

Love it. That sounds reasonable. You're at 4,800. We're going to 6,500. If you stayed in the same place, you're at 39% fixed cost. Could you guys stay in the same place for five years?

Could we? Sure. Do we want to? I probably think there are better opportunities.

Fair enough. Fair enough.

Without varying that number too much. I mean, maybe by four or 500 bucks.

I don't think you need to have fixed costs at 39%. I frankly think that's ridiculous, right? And I think if you're making this kind of money, which is a huge amount of money, you probably want to be spending more than $2,550 a month. Fine.

Sure.

But if I'm you and I'm like, "Hey, I want this curve, steady growth that's going to go up and up and up and up. And I do not want to go up and down and up and down in debt," then I'm like, "Cool. Once we get a big raise, let's build up our savings for a few months. And once we hit these milestones, then we will increase our rent just a little bit and take the extra and put it aside for buying a house."

Sure.

So you're living for today and for a bigger tomorrow.

Yep.

I like that.

I love that.

When you first came in, there was a timeline difference on buying a house. It was a year, it was two to three years or five years. What do we know now about your timeline?

A 10-year timeline seems a little bit more doable.

Yeah.

For a dream home.

Good.

So no sooner than 10 years.

You'd be what? In your early 40s.

Yeah.

What's the problem? Freaking great. I rent. I'm in my early 40s. And if I wanted to go buy a house, I would not feel like I missed anything.

Sure.

But you can't wait until you're 42 to start saving for a house. So what's the key?

Let's start saving now.

Yeah. What could you do specifically to build a healthier mindset with money, not to let the old mindset that you grew up with control you?

Start better habits and unlearning those mindsets that we have.

How?

I think for me, actually having the confidence to know that I actually don't have to live that way and that I can be rich.

But you are going to be rich. You already saw the numbers.

I am going to be rich.

Yeah. I actually think you all—

Ourselves.

Yeah. Aren't you living a rich life today? Now that I think about it, after today, by the end of today, you're debt-free.

Yeah.

Do you all realize that?

Yeah. No, that's it. We were tumbling the idea back and forth up into the show. We're just like, "Let's not do it yet. Let's ask Ramit. Let's see what's going on."

Well, that's exciting. We've not been debt-free since I was a teenager.

Okay. Round of applause. Will you send me your screenshot when you pay the debt off? That's amazing. And you do that and celebrate it. We're never going back here. And whatever celebration is meaningful to you. You just turned a major corner. Also, I love that it didn't happen by accident. You made a lot of lifestyle changes, too.

And the crowning moment is when you bring your son in on it. And you start repeating them. You basically are building family values. That's when you know you have true wealth, true rich life.

Oh my God, just got a text. Student loan is officially paid off. Zero left. Paid in full. Amazing work.

I have a lot of confidence in Mason and Becca. The fact that they have demonstrated excellence with their money for the last few years tells me that they have a very, very good shot at making amazing major changes with their finances. Honestly, they are a high-performing couple that simply did not have access to people teaching them about money. And the fact that they came out here, raised their hand to ask for help, that tells me they're going to be very successful.

I already know they're going to pay off their debt because they just did it. So, boom, they are now a debt-free couple. Their identity has changed within minutes. I think they're going to start investing more. I think they're going to start saving more. I do think they're probably going to constantly entertain the idea of buying a house, but I hope they continue making clear trade-offs with their finances because if they just save and invest aggressively for a few years, they will be in an amazing financial position. And now let's take a look at their follow-ups.

Hey Ramit, thanks for having us on the show. It was a really great experience. Biggest surprises for us is we were in a decent spot financially. We're in a better spot than we thought with the Conscious Spending Plan. We just have to sort out and had to sort out where to fit the pieces in our financial puzzle.

Yeah. And our biggest takeaway overall, really positive for us. We talked after our family and really realized that we are living a version of a rich life currently, especially when we compare ourselves from this time last year to now. We've really hit some of our money goals as well as some of our goals of where we want to be with our money. And that we're going to continue to reach additional goals that we see for our vision in our rich life.

Now some of the specific changes, we walked out of the studio and immediately paid off our debt like we said we wanted.

Immediately debt-free. It's a great feeling. Also, we've created accounts. I've started and maxed out a Roth. I also have created a brokerage account to do monthly investments and to continue to grow that for our future.

Yes. And we've also decided to start meeting weekly about money. This is to really just gain some more confidence and communicating about it and also really seeing where our miscellaneous spending is going and ensuring our guilt-free spending is more mindful versus mindless.

Thanks a lot.

Mike, hey Ramit. So it's been three weeks since our podcast. We wanted to do a follow-up. One of my biggest takeaways is something that you said is your household is a no-debt household, and I would like to make that ours now that we are officially debt-free.

Yep. And my biggest takeaway is definitely not getting back into bad debt and getting back into those bad habits, and really starting to make really good habits for us and spending our money smartly, investing our money and putting our money to work.

Yeah, one of the biggest changes that I've done is, of course, contributing to the Roth to max that out as well as putting several thousand dollars into a brokerage account for investments. And I have an automated plan of deposits going toward that every month now.

And we've been having a lot of really good, confident conversations about money, really being positive, and it's not a bad thing for us anymore. I think it's more exciting for us now when we are talking about our money, and still really looking at how we're spending it, what changes we need to make, and how we can still use it and have fun.

So thanks a lot. We really appreciate it. Bye.

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Article published September 29, 2026