I just don't feel like a good or worthy partner.
What is stopping you from changing the situation that you are in?
I don't really want to stop going on vacations. That's an honest answer. It feels more important that we have the experience than I have the money.
One of you has $4,000 a month to do whatever you want with, the other has $1,100. Seems like it could be a problem.
I don't mind paying more for some of the vacations if that money actually goes towards the debt and not towards hobbies or animals.
You're making tons of money, but you're paying minimums on debt and more is going towards pigeons than student loans.
Well, when you phrase it like that... I tend to be a very conflict-avoidant person. Anytime that it starts to be a conflict, I'm just like, 'All right, I'm done with this.'
At least seven times a week, I'm like, 'Are you mad at me?' And he's like, 'No, I'm fine.' Happy seems the same as angry. So that is a challenge.
Today I'm talking to Kevin and Samantha, a couple that's lived together for seven years. They earn a high income and they have kept their finances entirely separate. Okay, sounds fine on paper, but underneath the numbers, there is a lot at play. Kevin owns their home. He has zero student loans and hundreds of thousands of dollars invested. Samantha is carrying $78,000 of student loans. She has barely any savings and almost no investments. When there's a major financial gap between partners, it can cause tension and shame, which is exactly what's happening here. Let's take a look at their numbers. I'm about to open up their conscious spending plan, which is the same tool I use with every couple to see how much they make, spend, save, and invest. Here's what I see. Assets: $652,000. Investments: $883,000. Savings: $23,000. And debt: $389,000. Their net worth is $1.17 million. Fixed costs: 43%. Investments: 12%. Savings: 1%. And guilt-free spending: 44%. All right, the spending looks fine on the surface, but again, when we go beneath the numbers, they are disconnected and resentful. Now, we have a lot more to reveal. In this episode, you are going to see a lot that you do not expect. But first, tell me in the comments. Have you ever been in a relationship where one person had way more money than the other? How did you handle it? Did you separate your finances? Did you combine them? Did you set up rules? I want to hear your experience in the comments below. And now, listen in as we meet Samantha and Kevin.
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Samantha, I read your application and something stood out to me right at the top. You said, 'I feel I'll never be financially good enough for Kevin.' What does 'good enough' mean?
That financially he views me as an equal partner and as somebody he trusts to make money decisions and eventually combine finances one day.
And Kevin, would you agree with that characterization?
I mean, I don't know that I really knew that. She's never said that to me before.
Hold on. That was at the top of the application. Samantha, you never said that to Kevin before?
I guess not in those words. I once said, 'I feel like even if I saved a million dollars, that wouldn't be good enough for you.' And he was like, 'Well, if it was a million dollars,' which is supposed to be funny, but to me, I'm like, 'Oh, man. Is that the line? Millions of dollars? I will never hit that.'
Samantha, what happened next?
We kind of just dropped it because it got me in a little bit of a mental doom spiral that like I could be perfect fiscally, do all the right things from there on out, and I'm not going to catch up unless I win the lottery.
And what does that imply?
If you have less money than Kevin, then I'm not contributing equally to our partnership. He's carrying the burden.
Yes. Well, I don't know. Another comment was made at one point that like he didn't want to carry the burden of us fiscally in retirement. And I agree, but it also kind of freaked me out because I won't have the same amount of money he will have. And so I can't tell if what he's looking for is like a concerted effort or if he's looking for like an actual fiscal dollar amount.
Do you ever talk about this?
Not really. Our money is mostly separate. A couple of occasions we tried, but like I was extremely embarrassed about my situation and I kind of brushed it off.
Okay. Which of you is avoidant? By a show of hands.
Okay, that's pretty interesting. So, you're both avoidant. You both know it. Do you both know that about each other?
I would say that this area is an area I am avoidant in and I'm not avoidant in a lot of other areas.
Got it. And Kevin, are you avoidant in everything or just money?
Most things, I would say.
All right. How long have you two been together?
Is the ultimate goal to get married?
I would like to be married. It's not a deal breaker for me at this point, but I feel as though money is a huge obstacle for that. I feel like I have to clean up a lot before that's something he would consider. That's not something he's said to me. That's just something I have said to myself.
Oh, okay. So, Kevin, do you agree or disagree?
I think I would agree. I've been married before and I am not super excited about getting married again. So I don't think it's like a, 'Oh, if you get your money figured out, we're going to get married.' It would put me in more of a place where I might want to.
Okay. So you've been together seven years. You haven't talked about money that much. How often do you talk about money?
I would say we comment at money rather than conversate about money.
It could be a snipe or it could be just a genuine, 'Wow, the groceries were expensive.' And then the other person would say, 'Yep.'
What are some other comments that you say to each other about money?
If we're talking about going on a trip or something like that, I guess we don't really say like, 'Can you afford that?' But more of a like, 'Oh, that's going to be kind of expensive,' but then there's no like discussion past that. It's more of just like a, 'Yep, it is.'
Okay. What's next? Samantha, you spent too much money at the bird vet. I like this type of conversation. I don't think I've really heard it that much. It's just like one sentence. End. It's kind of like when I talk to young kids, they go, 'Your shirt is weird.' End of the story. No more comments at all. Just done. That's it. They said what they have to say. I respect that.
I think part of it is because our finances are very separate other than just like we have a credit card that shared expenses are on. It's sort of just like, all right, well, you do you, you know, kind of a thing.
Do you know about each other's financial situation?
Now we do. We knew, I think, a rough idea of what the other person made.
I knew how much he made when he started his job because he told me that he had to negotiate it and then he would tell me that he got X percent raises and so I could kind of infer from that what he made.
What the hell's going on right now? You're living together. You're together for seven years. You're not even talking about how much each other makes. What's happening here?
I mean, I knew like an estimate of how much Samantha made, but I would ask and it was kind of just like, 'Oh, I don't know. It's hard to know because it's sales and it could be different.'
Do you guys talk substantively about other things besides money?
What would be an example?
Politics, books, family, animals.
Animals. Okay. Like you really talk about them. You grapple. You know each other's views, you probe, that kind of thing.
Okay. All right. Why not with money?
It's embarrassing for me. And I've never really had the skills to do it. I've never had the conversations in other relationships either.
When you think of money, what words come to mind for you?
Anxiety. But also potential.
You feel nervous right now?
I can understand that. If you haven't been comfortable enough to even bring it up in your own long-term relationship, to be here talking about money with me, with us, with a camera, I can understand that that can feel very overwhelming. So, I appreciate it. We'll take our time in our conversation today. Okay. Kevin, you ever ask her about her anxiety around money?
Further back in our relationship, I tried to bring it up a little bit more and it just seemed like she wasn't interested in talking about it. I was just kind of like, 'All right, well, she doesn't want to talk about it, so I'm not going to push it.'
All right. Can the two of you think of a time in the last three to six months where you were not on the same page about money?
Like a week and a half ago, we were on vacation and we're in the hot tub, glass of wine, looking out at the ocean. It's very lovely. And he asked me if I wanted to go to this place called Leavenworth where we have gone every year around Christmas for the past five years and I expressed that I don't think it's a good idea for me. I want to save money for vacations moving forward and I have not been doing that.
Okay. And Kevin, what did you say? Let's just role play it.
I mean, we've gone every year before and it hasn't been a problem for us for our money. So, I don't see why we can't go.
And not even acknowledging the like need to save or that she's uncomfortable.
It was clear to me he was disappointed at this point. So, I said, 'We can take a look at it because I don't want my financial situation to put a damper on what he can do in his life.'
And was that the end of it?
The end of it was we can look at it.
Let's just do it right now. I don't know the price, but I'll make it up. $400 a night. You're going to go for four nights. That's $1,600 plus taxes plus blah blah blah. That's $2,200. Here it is. Here's the thing I found. I'm Kevin. Here you go, Samantha.
I mean, if the expectation is that we split it 50/50, I don't think that that will be happening for me this year.
Oh, but I just spent so much time looking at all these Airbnbs. We did it the year before. So, what's the problem? We should be able to do it again.
Well, the problem is that the trip is going to cost $2,200. If we could find a trip for $1,500, I might be able to save that much money by December.
Ah, why don't you just tell him that out of curiosity?
That's a great question. I need to like look and see what is reasonably possible for me to save before December before I present that number to him.
Do you struggle to advocate for yourself in this area?
Yes. Because I don't want to say no. I don't want to turn down experiences that I know he wants to do because it would put a strain on me financially. Like it feels more important that we have the experience than I have the money. As silly as that sounds.
Can you just say that again? I want you to hear yourself.
It's more important that we have the experience than I have the money.
How's that strike you when you hear it?
Self-defeating. It doesn't help me. It doesn't help us in the long run to say yes to everything.
It's pretty rare to meet two avoiders. Their annual income is a combined $369,000. And that is what is basically covering up these dynamics. That high income allows them to maintain separate finances and avoid uncomfortable conversations and really delay any true planning. Most couples could not operate like this without immediate consequences, especially if they were earning less than $100K combined. The pain of that avoidance would simply be way too big. But even with this really high income, that problem is coming to the surface. They're disconnected on their goals. They don't know each other's numbers, and they don't even really know what true financial partnership looks like. Remember, they've been together for seven years. And what I learned next genuinely surprised me. Here's what Samantha said when I asked how they handled their biggest household expenses.
Kevin pays the mortgage and we split the utilities, groceries, etc., 50/50.
Okay. How did you agree on that?
We didn't. At the time I moved in, I was unemployed. He did want me to pay him some rent at some point and I did a couple of times, but I have not been. Sometimes the money just doesn't exist at the end of the month, but also, you know, this is his house. If he sells it, it's all his money. I feel like he's not my landlord. He's my partner. And doesn't it make more sense for the money to be saved or invested? Like long-term, that seems like a more advantageous step to take than just giving him X number of dollars cash to probably just save himself.
And did you discuss this with him?
I believe I have made a comment to that effect, but it was not a real discussion.
All right. But Samantha, how do you feel about not paying the mortgage, but splitting the utilities, groceries, etc.? It sounds like you are comfortable with it and it is how you would set things up if you had a magic wand.
Yes, I am comfortable with that arrangement.
Okay, cool. Kevin, what's your take?
I mean, I think I was a little frustrated with that conversation. I think because before Samantha moved in, she had made a comment about, 'Oh, you know, if I were to move in, I could help you pay your mortgage.' But then once she moved in, it was like, 'No, because it's like you're the one that's going to benefit from it, so I don't think I should have to pay,' which was a little frustrating to me.
What did you do when she said that?
I think I very lightly voiced that I was frustrated but then just stopped talking about it because I am extremely conflict avoidant and just didn't want to have the conversation.
I want to ask you the same question I asked Samantha. Do you struggle advocating for yourself?
You said in your application that financial stress has caused frustration and stalemates. Can you give me an example of that?
I think the mortgage one is a great example of a stalemate. I don't think that that is something you ask a partner to do if they don't have an ownership stake in the house and we have just done nothing about it.
Let's flip the roles for a second. Let's say that you owned the house and then he moved in with you. How would you structure it?
I think that a partner is different than a roommate and I wouldn't expect a partner to pay me rent as long as they were paying their part of utilities and groceries.
Okay. And the argument that you made, which was like since he owns it, he would accrue any equity. I never hear renters make that argument to their landlord. Like, 'I'm not going to pay you rent because you're the one who's accumulating equity.' What do you think about that?
I'm not trying to build like a financial future with my landlord.
Are you trying to build a financial future with Kevin?
I am. And I feel as though the rent money would be better allocated in an investment or savings scenario given how far behind I am.
What if you weren't far behind? What if you had no debt?
That's a good question. If I had no debt, I would probably have similar feelings, but also like would probably pay it just because I know that it would make him happy.
It doesn't seem very convincing to me. I don't mind that the two of you would talk about this. I think that's really healthy. And candidly, I think that couples can come up with whatever solution as long as they both think it's fair. The argument kind of falls apart when you're like, 'Huh, if I didn't have debt, I would probably pay it.' Like, your debt is yours. I think if Kevin were in the same situation and the roles were reversed, I would be asking Kevin the same question. And I actually think that a lot of us would be like, 'Kevin, are you like a deadbeat?' And I don't think either of you are deadbeats. I've seen your CSP. I want to talk about it. Both of you do very well. It's really impressive. But I'm just wondering how much of this is invisible expectations that has never really been talked about with each other. I'm wondering how much of this is because of the debt. How much of it is gender expectations? How much of this is just wrapped up in unexamined assumptions about money? I want to address the gender expectations first.
I don't believe that he should be a provider. The money simply doesn't exist at the end of the month and it doesn't feel like the best use of the money to pay him rent.
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Samantha, you said in your application that you feel you have, quote, 'no say' because Kevin owns the house. What do you mean by that?
I would love to live somewhere that is not the city we live in. And Kevin has also made similar comments, but what I have realized over the years is that they're more of like daydream fantasies than actual urges to move. And if I want to stay in a relationship with Kevin, which I do, I have to stay in this city, in this house.
And can you tell me what you mean by his comments are more daydreams?
We'll be in Seattle, for example, and he'll start looking at houses on Zillow. We'll get kind of into details of what we're looking for, but make no plans, no timeline for that to happen. And initially, the first couple of years of dating, when I would see him on Zillow looking at these places, which were also places I wanted to live, I would get kind of excited and think like, 'Oh, maybe this is really going to happen.' But I think he just likes looking at houses on Zillow.
I mean, I do like looking at houses, but also any place we moved would be a substantial increase in mortgage and we couldn't afford that because I just assume most of that would be on me. Financially, it just doesn't make sense.
What percentage of your relationship around money do both of you think is based on assumptions rather than clear communication?
A lot of assumptions. Like 80%.
I have started in the last couple of months trying to be more straightforward telling him what I'm doing because I honestly, I want him to be proud of me and like see that I'm moving in the right direction.
Do either of you have visibility into the other's savings or investments?
Okay. Out of curiosity, if you were not living together, what would you be doing for housing?
I would be traveling a whole lot less and I would have a whole lot less pets and I would not be going out to eat. My life would look a lot different.
Okay. So, what I'm hearing is Kevin's lifestyle has sort of pulled you up to a level that is unsustainable for you if you were solo. Is that correct?
Yes. I would have to make a lot of changes.
Got it. Okay. Kevin, you want to comment at all?
No. I mean, I think that makes sense. I suppose I didn't really think about like the trips and pulling her up into a spending area that she is not necessarily comfortable with. And I think I should think about more. I think part of my like frustration was that I was like, 'Okay, I'm going to pay the mortgage. That's fine if that'll help her pay off some loans or like that sort of thing.' But then that didn't really happen, which was like a little bit frustrating for me because like I'm like, 'All right, well, if I pay the whole thing, like I would have been paying it anyways even if she wasn't living here. So it's not like a net negative to me. But like if you're not having to pay for housing, then that should mean that you can pay off your student loans and that sort of thing or it should be much easier to do that.' And since that hasn't really happened, that has been a little bit of a frustration for me.
Okay, that's fair. Do you ever bring it up?
Okay. All right. How do you both feel about money in your relationship?
Can't think of any other word better than really avoidant.
I know as bad as I have made it all sound, I feel kind of optimistic because something in me has changed and I feel like I've gotten more open in just like the past couple of months and I feel like I've gotten myself on the right track. But I would like the money part of our relationship to be more cohesive and less isolated.
Great. I love that vision. Kevin, let me put this up on screen. This is the wheel of emotion. It might help you access some of the feelings. I myself have used this. I learned this in therapy.
Oh man, there are a lot of emotions, aren't there?
That's what every man who looks at this graphic says. He's like, 'What? There's more emotions than anger?'
I do feel mostly enthusiastic or optimistic, I would say most of the time, but there is definitely some exasperation.
I will tell you, my facial reaction betrayed me. I was surprised when you said enthusiastic because I haven't heard you be enthusiastic about money once.
Yeah. Oh, okay. So, your countenance is just more generally like relaxed.
Okay. Is that hard to read, Samantha?
Absolutely. At least seven times a week, I'm like, 'Are you mad at me?' And he's like, 'No, I'm fine.' Happy seems the same as angry, as all of the above. So, that is a challenge.
In a dream world where you could wave a magic wand, what would your relationship with money look like?
Magic wand, my student loan debt and my car debt absolutely gone. And we are able to discuss money openly and have communal goals with our money and really discuss like how we want to use money as a tool for X, Y, and Z. I want to be able to plan the year out with what we're going to do with our money.
And what about the house?
Well, we wouldn't live in this house. Magic wand.
Yes. And I would have an ownership stake in it and I would be making payments toward it.
Okay, cool. Kevin, back to you.
That all sounds great. I think that and being on a path to early retirement.
As soon as possible, but 50.
Okay. Any surprises in what you both heard?
We've talked about how he wants to retire early and how I probably will not be able to and that is okay with me. I enjoy what I do and I'm perfectly happy with him like going on retired excursions and joining him when I can because the math is not mathing for me to retire at 50.
In the magic wand answer from both of you, I did not hear that you would like to be married.
That's not as important to me as having a more teamwork view of our entire life.
Okay. Any hesitations? Anybody? Kevin?
No. I mean, I know owning a house together is complex if you're not married, but yeah, it can be done. We could talk about it.
All right. Let's look at the CSP. Kevin, why don't you read off the word in bold and then the number in full next to it for this entire box, please?
Assets: $652,500. [Applause] Investments: $883,300. Savings: $23,300. Debt: $389,000 for total net worth of $1,170,100.
Okay. And just to clarify, how much is your debt, Samantha?
So my student loan debt is a little bit under $78,000 and I owe approximately $30,000 on my car.
Okay. What's the rest of it?
Yeah. All right. And then Samantha, can you read off the combined gross monthly income number, please?
You make $369,000 a year. Did you know that?
No. And when we were looking at that, it kind of blew our mind both a good and a bad way. Good meaning we make a ton of money. Bad meaning like where's it all going to show.
Yes. It sounds like a lot, but it doesn't feel like a lot.
$369,000 does not feel like a lot of money.
I mean, not when you're living it.
Okay, let's continue. Your fixed costs combined are 43%, which is very low. Now, I would expect them to be kind of low because you make a high salary, but what is interesting to me is that your fixed costs are quite similar. Kevin is the one making $18,000 a month gross. And then we have Samantha making $12,000 gross. What's interesting is look at those fixed costs. 46 and 39%. So they're kind of similar. However, Kevin is paying the mortgage. Samantha is not. So we have $3,100 going towards the mortgage. Samantha is paying zero. But let's continue looking down here. So we have equal on utilities. Samantha's paying a little bit more on insurance. Samantha is paying quite a bit more on car payment. Debt payments at $180 a month. It's interesting to see that the way that the two of you talk about money is so different, but these numbers themselves are kind of similar. Now, I understand that there's one major difference here, which is the mortgage. What do you all make of that?
I am surprised we spend a similar amount. I am surprised the percentages are low. They don't feel low.
I want to read off this pet category because it's unusual. Yes, we have Kevin paying $448 a month and we have Samantha paying $588 a month for a total of $1,036 per month. How many pets are we talking about?
We have three dogs, two cats, five chickens, and eight pigeons.
Did you grow up in a rural area with a lot of animals?
I grew up in a small town. We still lived in a subdivision, but I have always been an animal lover, so always had a lot of pets growing up.
Let's continue down investments. So, you both do 401k pre-tax. We have $1,900 bucks for Kevin, $1,200 bucks for Samantha. On top of that, we have some investments. Kevin is investing aggressively, an extra $1,400 post-tax, and Samantha's doing $584. That's probably what, a Roth IRA?
All right. And then another 108 bucks for something else. What is that?
An employee stock purchase.
Cool. Great. All right. So, that's a total of 12%. Again, quite similar. 14 and 10% just off of different incomes, but okay. Savings are at 1%. That's just 100 bucks a month. And then finally, these numbers I found remarkable. Guilt-free spending for Kevin is at 40% or $4,000 per month. And for Samantha at 51% or $3,672. What do you all make of those numbers?
It doesn't align with reality. I know I do not have $3,600 left over. I did look at our dining out bill and it averages about $950 a month eating out and I'm not totally sure where the rest of it is going.
Oh, really? Kevin, what do you think? He looks completely mystified.
I don't know. I really don't know, guys. Come on. I do. We spent like a decent amount on like going out and things like that, but like $8,000.
Yeah. $7,756 a month. And you're telling me like there's no way that we...
It doesn't feel like that, right? That's crazy.
But it's not really crazy if you add things up correctly. That is why the CSP is structured the way it is. So, let's talk about it. Samantha, you said something very interesting. You said there's no way we have that amount of money left over. Maybe, maybe the math is wrong. Or maybe when you took that vacation and when you eat out for dinner and all that stuff, maybe that's not properly tracked here on a monthly basis. How much do you spend on vacations per year? Ballpark.
Like the most recent one, the hotel alone was about $2,500. I would guess we spent another $1,000 eating out.
It's probably more like $5,000 when you count everything.
And how many vacations do you take per year? Ballpark?
Two to three. Yeah, let's say three. I always round up. That's $15,000 minimum, which is like $1,200 bucks a month. You starting to see how the numbers add up?
This is why you feel like, 'Oh my god, this is so crazy. Where's all the money?' But actually, it's just not properly being counted and you're actually not getting the psychic benefit that you could. If you were instead to say, 'We're going to take three vacations a year. We're going to put the money aside ahead of time. We're going to appreciate that we can go to this fancy dinner place that we both love. It's going to be awesome.' And then when you look at your CSP, it looks like a video game where you're winning right now. This video game sucks. We have all these points at the top, but like where's all the money? Well, the money happened seven months ago and you just didn't track it and now your mind does not know how to advertise it correctly. That's human nature. How do you all feel about that?
I feel very much like validated in my desire to save towards the vacations and talk about them at the beginning of the year and plan for them. Taking vacations on a whim is, it's fun and it's lovely, but it's not putting me in the best position fiscally.
Samantha says things like, 'I feel like I'll never be financially good enough for Kevin. I don't think I'll ever catch up unless I win the lottery. It's more important that we have the experience than I have the money.' All of this while earning $144,000 a year, which is a very good salary. This is exactly why I say how we feel about money is highly uncorrelated to what we have in the bank. Once someone feels behind, they often start to behave in destructive ways. They feel guilty when they are doing well by every measure. It's like if your partner speaks a second language to their family and every time you hear them speaking to them, you feel bad because you don't speak the language. Nobody expects you to speak that language. You created that standard in your head and now you feel bad because you're not living up to a standard that you yourself made up. We do the same thing with money. We create an arbitrary standard and then we feel bad about it. You know, the truth is a lot of people actually like feeling guilty about money. It gives them purpose. It reminds a lot of people how they were raised and that feels comfortable. After all, if you're not feeling guilty, who are you really? If you're listening to this and you realize you and your partner avoid these same kind of conversations, you don't need to wait years to fix it. Inside my money coaching program, you can learn how to talk about money clearly. You can connect over money and you can build a system that works for both of you. You can join at iwt.com/moneycoaching.
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Have you all ever considered how much each of you proportionally makes? I would guess not because I don't really think you knew each other's income.
So Kevin, you make $221,000 per year.
And Samantha, you make $148,000 per year. It's like 60/40 basically. How does that strike you?
I'm not surprised he makes more.
Are you surprised that it's 60/40 and not like 80/20?
Yes. Yes, I am surprised that it is 60/40.
The way you talk about it, it sounds like he makes like 80% of the household income.
You make a lot of money, Samantha. You make $148,356. That's a lot of money. Have you internalized that?
Um, no. I still feel like how I felt when I was making $50,000.
Wow. Do you think you'll ever feel good about how much you make?
I do. I think that if I continue behaving like a person who makes almost $150,000 and has those habits as opposed to the things I was doing when I was making $50,000, then I can internalize that.
I want to talk about your savings. How come only one person is saving and it's only $100 a month?
I save basically what I can at the end of the month.
Huh? I don't understand that. What does that mean? That's like a little Indian kid saying, 'I only study when I feel like it.' It's like, 'What the... I literally do not understand the words you are saying right now.' What does that mean?
After the bills are paid, after my exorbitant pet food and bills costs, I save or invest the remainder.
As a non-pet owner, I have a difficult question to ask you. Who's more important, you or your pets?
So, but you pay close to a thousand bucks a month on your pets.
And you only save $100 a month for yourself.
If you want to spend that much on your pets, okay, we can make it work. Honestly, it's very doable. But it is striking that you only save $100 a month. And your answer was, 'I do whatever's left.' Yes. How much do you have in savings?
I have like $4,400. I checked it this morning.
Okay. So, let me ask a worst-case question. I don't expect this is going to happen, but I just want to ask just to make the point for you. Let's say that the two of you decide to separate, okay? And Samantha and Kevin, you both go on your merry ways. Samantha, how long could you last with your existing savings?
Oh, like a month maybe. Yeah.
And this is somebody making $150,000. Do you think that that is normal?
Okay. What is stopping you from changing the situation that you are in?
I don't really want to stop going on vacations. That's an honest answer. Don't want to stop buying a book that I want or I don't want to have to make a hard decision about one of my pets.
Kevin, similarly, you have probably $20K in savings. So, same question. If you were to separate, how long do you think it could last?
Okay. How do you feel about that?
I feel okay about that. I feel like with the current situation in our country, I should probably have a little more saved, but I felt pretty good about having six months until recently.
What do you think about your numbers compared to my recommendations for the conscious spending plan? For example, in fixed costs, I typically recommend 50 to 60%. Your numbers are 46 and 39%. Investments, I typically recommend like 5 to 10. Your numbers are 14 and 10% and you are putting away pre-tax money as well. So, it's even higher than that. What do you think of that?
I would like to increase mine.
I feel good about those numbers.
Cool. Savings, I typically recommend 5 to 10%. You're at zero and 1%.
Not good. I would like to increase that as well.
I'm kind of neutral on it because we should start spending or saving for like vacation and gifts and that sort of thing. But as far as like emergency funds and other savings, pretty much have what I want in savings.
Okay. Guilt-free spending, I typically recommend 20 to 35%. You're at 40 and 51%. It's a bit high.
It's clearly not guilt-free spending because we're sort of feeling guilty about it. And you look at that number, you're like, 'Oh man, you guys must be doing a whole bunch of stuff.' And it doesn't seem like we are.
Samantha, what do you think about the numbers?
I do think we probably spend that much, but I think it is, as you mentioned, amortized out over the course of the year. So, on a monthly basis, it certainly doesn't feel like $3,600.
Notably, nobody said they want to bring that number down, whereas all the other ones, you were like, 'Yeah, I want to bring it up.' Why is that?
I don't really want to do less in my life, but I know that's what I have to do if I want to be on track to retire at any point in my life.
One of the surprising things that I find when I help people with money is when they actually come up with a super clear rich life vision and then they have a system that funnels money to the right things, they're actually very surprised that they can often spend more on things they want because they've cut out all this random that so many people buy. They also can appreciate the things they do more, especially the bigger they are. It's a human desire. We don't want to do less of the cool things we love. I get that. But I think there's probably larger goals here to discuss like what is our rich life together and how do we create a vision together and that can often be more important than 'I don't want to give up spending on the things I've been spending on.' You know what's wild? People say they hate uncertainty, but when it comes to their own finances, they are totally okay with it. They don't know how much they spend. They don't even know how much they make. They don't know what their mortgage is. They have no idea if they'll be okay for retirement. It's one of the strangest things about human behavior and I see it all the time. To understand where that comes from, we've got to go back. Let's take a look at their childhood to see what patterns they experienced that might be shaping their relationship with money today. What did your family say about money when you were a kid?
It wasn't discussed with the children directly except to say like we can't afford that or if you want that you're going to have to buy it with your own money. But there wasn't any like discussion on savings and I still think my parents have a fairly unsophisticated idea of investments.
What general area of the country did you grow up in?
Both parents, were they together?
They were together then. They are not together now.
Got it. When did they separate?
Ah. And how did that affect you financially speaking?
Yeah, that was rough. Me and my dad lived in this woman's basement. That was quite a change going from our like brand new subdivision house to a lady's basement.
What did you feel when that happened?
Uh, I was embarrassed. I didn't want my friends to come over. My dad also had to get rid of his car and he got this like 30-year-old Toyota Camry and I would make him drop me off like blocks from the school.
What did he say about, for example, having to get this old car?
He didn't really say a whole lot. He had purchased a brand new car without discussing it with my mother. And when they divorced, he could no longer make the payments on it. So, he just had to get any car he could afford to buy. A year later, maybe he somehow found the funds to go buy another newish car.
What do you make of that?
Neither of my parents are, I hate to say, good with money. They're just out there spending on what they want to spend it on. Kind of the mentality like I worked for this so I should get to buy what I want. And that unfortunately I have realized is similar to what I am doing.
I'm making this money. I should be able to go to Italy for three weeks. If I see it, I like it, I want it, I bought it. That was kind of my ethos for a very, very long time. And it is something I still struggle with, but I think I've improved a lot in the past few years. I realize that one day I want to retire, and I'm definitely not on the path to do that.
How are your parents doing now financially?
My mom's going to work until the day she dies. My dad, unfortunately, is now on wife number three and has lost half of his retirement with each divorce. So, he's about five years away from retirement. And he recently told me he only has like $300-something thousand. And I was like, 'Oh, that's really not what I want for myself.'
