Ramit Sethi joins Sam to break down how high-earning couples should think about, talk about, and structure their money together. They cover the four money personality types, the monthly money meeting framework, the annual rich life review, conscious spending percentages for $500K earners, and why spending is a skill just like earning.
Speakers: Sam Parr (host), Shaan Puri (host, referenced), Ramit Sethi (guest, author of “Money for Couples”)
Intro and Why Ramit Is Here [00:00:00]
Sam: All right, we’re live. Ramit, so the reason I wanted to have you on was because Shaan and I were talking the other day. At the end of the episode — at like minute 55, we got to the total end — and somehow it came up that my wife Sara and I do this thing that we call our monthly money meeting.
The way it works is we break down our monthly expenses, our income, and we also look at our net worth. We talk about how can we spend the next month to make ourselves happier — how can we use money as a tool, are we happy with our consumption from the previous month. And Shaan made fun of me. He was like, “You’re running that like a corporation, like a business.” At first I was embarrassed to say that I’m running my marriage like a business, and then afterwards I was like, actually no — I can love my wife, and that’s the number one reason why I do this. But in order to make it run effectively, you kind of have to run a tight ship, like a business.
You have this book, Money for Couples, and you tweet all about this stuff — relationships, running a household like a business. I thought you should come on and talk about the other stuff of a relationship, other than love, which requires running it a little bit like a business.
Ramit: Well, first of all, I appreciate that Shaan makes fun of you — that’s one of my favorite parts of this podcast. But when you are married, you are running a business. It is the business of running a household together. And it’s only in the last hundred or so years that Americans became infatuated with this idea of love as the only reason to get married. That’s ahistorical — that’s not been the case for a long time.
Just to give you an example of how culturally dependent this is: my parents knew each other seven days before they got married. So you have to remember that it’s not unromantic to talk about money. I actually find it very romantic that you are building a connection. And there are a whole bunch of other benefits that I’m sure you and I have both experienced because we talk about money regularly.
Sam: You’ve got this amazing podcast, and a lot of the people you have on are really wealthy — I think you had someone who was making like two or three million a year and they talked about spending. But I think your typical listener is low-ish six figures. Our audience makes — I’m going to just make up an avatar — like two to $400,000 a year, and they work at tech companies.
Ramit: I think this topic is so fascinating because it cuts across psychology, numbers, and communication. And I personally think it’s underexplored. There are a lot of people online who talk about how to make money, how to invest money. Very few people talk about how to spend it meaningfully. And even fewer talk about how to do it in a relationship. So if you’re listening and you’re single, dating, or you’ve been married for 20 years — odds are very likely that you have not substantively talked about money with your partner. And it’s important. It’s one of the core things in a relationship.
Dreamlining Together Early [00:03:30]
Sam: Do you remember Tim Ferriss in The 4-Hour Workweek? He had this thing called the dream scenario. It’s something like: write down all the things you want to own, then reverse-engineer it to figure out how much you have to earn to afford this. Be intentional about what you want, say it specifically, and work backwards.
I used to do that as a 22-year-old. At one point I owned everything that was on that list and I was like, half that list I don’t really give a damn about even after I owned it. But I remember a year into dating my wife — it was like, hey, this is promising, we’re heading towards marriage — and we did that dreamlining together. We used to do it all the time. Tell me your ideal life scenario, how would you like to live, how much would that require, what responsibilities are you willing to take, what should I take on? It was so helpful to do that early in a relationship. It sounds weird, but it was a great conversation.
Ramit: I love that. It’s amazing that the two of you did that early on, because it’s one thing to do it solo, it’s an entirely different thing to do it with a partner. What’s amazing is that you two were on the same page even about having that conversation. Most couples aren’t like that. They’re not sitting down to dream together. One person is probably a worrier, another might be an avoider, or — for a lot of people listening — they’re spreadsheet freaks who love to look at compound interest all the time, and they’re not even communicating in the same way. So one person is like, “Look at our returns, look at our net worth,” and the other is like, “Why are you talking about this? I don’t think we’re going to have enough. Why did you spend $20 at the gas station?” You guys were speaking the same language. Most couples aren’t even on the same planet when it comes to money.
The Four Money Types [00:06:15]
Sam: You mentioned “optimizers.” What is that?
Ramit: There are four money types. I talk about them in my book — I’ve talked to thousands of people and found these four types that describe most people.
First: the avoider. This is the most common. They avoid money through a series of conscious and unconscious techniques. If they’re in a relationship, they’ll say stuff like, “You’re just better at money” or “I’m not good at math.” Sometimes they even sabotage conversations: “Why do you always have to talk about money, can’t we just have a good time?” That’s an avoider. There are a whole bunch of techniques to stop being one.
Then we have the optimizer. That’s me. That’s you. That’s a lot of people listening. Optimizers save, they invest, they can do a lot of good. The problem is when you take it to the logical extreme — they become incredibly boring and cheap, and all they care about is cost. “We shouldn’t buy this Coke can because if we compounded that for 45 years it would be $1,200.” Get a life. Optimizers are really hard to be partners with because everything is “how much does it cost?”
Then we have the worrier. Worriers worry about everything. Many of them saw it growing up. When I ask them what it would look like if they didn’t worry about money, they have no idea — because that’s all they’ve ever known.
And finally: dreamers. Dreamers believe that success is just around the corner. The next gig, the next deal. These are the folks who typically fall into get-rich-quick schemes. They’re incredibly difficult to be partners with because they’re often subsidized by someone else — often their partner.
Sam: You seem like you teach this stuff and you have your act together when it comes to money. I assume you’re an optimizer. So — what flaws do you still have, and how do they present themselves on a daily basis?
Ramit: For everyone listening: Sam texted me and was like, “Hey, what are you getting on Black Friday?” And I was like, “I don’t shop anywhere that does Black Friday sales.” That’s a difference. But the fact is, you’re an optimizer, so am I — they just manifest in different ways.
The annoying ways? When I was 22, it was all about, “Look at these numbers, just do this, it’s so easy, it’s so clear.” And I could see people’s eyes glazing over and I didn’t know why. Once you get a little older, more mature, better at communicating, you realize nobody wants to be talked to like that. And in the areas where I’ve been really weak — like fitness, where I didn’t know what protein was until my late 20s — if someone had been like, “Dude, it’s so simple,” it would have been overwhelming and made me feel stupid.
So I learned to slow down, become more emotionally connective. But dude, it’s still there. When I’m talking about money sometimes I’m like, “Okay, let’s get to the part where we do the numbers.” It happens regularly. My wife and I have monthly money meetings, we have our annual rich life review, and I can see it in myself — I just want to get to the end. I was raised like efficiency is a virtue, and I’ve had to really learn, and I’m still learning, to slow down, take the journey, have fun along the way.
The Annual Rich Life Review [00:11:45]
Sam: It’s December 30th when we’re filming this. What’s the annual review?
Ramit: We’re in the middle of it right now. This is one of my favorite times of the year. Every December we do an annual rich life review. I’d encourage everybody to do this.
We sit down and do it over several days — we’re in no rush. We start by going through our photos from the year. We go through what were our most memorable things this year. A lot of them are favorites, some are not — things that bring up visceral memories. Bad things that happened, but also a lot of good: the travel we did, the family we saw. You just know it when you see it. We put 10 or 20 photos aside and text them to each other, then we talk about them.
Sam: What does this actually look like? Are you sitting over dinner? What if I said, “Sam, I told you — we’re running a business. We’re in a conference room.”
Ramit: No. The truth is, when we did this just recently, we were sitting across from each other on our couch, just chilling. But most of the time we have these conversations while traveling. We love to do this somewhere different than our normal place. Somewhere expansive, surrounded by beauty — but that’s not always possible. The point is it’s about the two of us having time and space.
So I’m looking at my photos and it becomes very obvious — out of 20, 18 of them were with friends and family. That really tells me something about what’s important to me.
Then we do this little exercise I came up with: “What if 2025 was incredibly generous?” We started there and just brainstormed. What would we do if we were incredibly generous? We’d go back and forth. Then: adventurous — like a wilderness course. I don’t even know how to start a fire. What if I went to a three-day wilderness course? My wife was like, “Go on your own, I’m not trying to go to that.” But that’s cool too — you find out what you like and don’t like. Then: luxurious. Then: relaxed. Then: social. We’re just dreaming and writing down ideas.
Then we get into more specific stuff: what did we love this year, what do we want to do more of? Things like take a trip with friends, spend time with our parents. Then: what didn’t we like, what do we want to do less of? We tried to get this fancy restaurant reservation — it was a big deal — and we actually don’t really care about that type of thing.
Then the last thing we do is get into the numbers.
Sam: You don’t need to say your actual numbers, but tell me the categories.
Ramit: These are the major categories in my conscious spending plan: housing, travel — for us that’s a big discretionary expense — clothes, fitness. Those are the items. And we’re going through: we projected this, we hit this, why did we diverge? Then: do we need to tweak it next year, do we need to add more income? What are our distributions? Can we handle that next year?
Sam: When you’re doing the review and setting the budget for next year — are you typically on track? Over? Under?
Ramit: That’s a very good question. We’re never exactly on. We are definitely over in certain categories — travel, almost always. So we adjust it every year. The dream is you’ll nail it, but we never do. We always leave buffer.
Sam: You add 20%?
Ramit: I have guidelines for buffers. For a wedding: 2.5x right off the bat. For travel: add 50% immediately. If you think your trip is going to be $3,000, it’s actually going to be $4,500. For fixed costs — rent, auto, the things that typically don’t change — I’d say add 15%, because there are things people forget about.
Sam: That’s what I do with my businesses. Whatever we say the budget is, in my head I’m already at 30% over.
Ramit: Let me tell you why I think that works. There are so many different ways to internalize money lessons. I had this experience at a hotel in Thailand — high-end. Whenever I go to these hotels, I always ask to see the general manager and I go on a walk on the property with them.
Sam: Why are you laughing? — it’s weird, it’s very… but you’re doing it for a positive thing.
Ramit: I ask them: tell me how you run this hotel, who are your clientele? So this manager told me — it’s December, the busiest time — they had 40 or so rooms, and he said, “We always keep one room off market.” And I’m like, why would you do that at the busiest, most expensive time of year? He said: “Luxury is about always having something in your back pocket. Maybe a regular guest who comes every year for a decade brings an extra family member — we need to be able to accommodate that.”
And I’m thinking about my mom growing up — she always had extra food if we brought a friend over. Luxury at a different level. Same thing with money: I want to always build in a buffer so that if something happens, we’re good.
Sam: Do you assume every year your spending is going to go up 5%, 10%?
Ramit: I probably should, but I don’t do that specifically. We look at what we’re going to do next year and things like rent won’t change that much. But if there are big life events, those change things significantly. We’re not doing it on a percentage basis — we’re looking at discrete big events, because the foundation is already laid out.
Income Planning for Entrepreneurs vs. Employees [00:22:00]
Sam: Let’s do this for entrepreneurs and also for a tech company employee. Do you assume your income is flat, up, or down?
Ramit: My wife and I are both entrepreneurs. We take a standard salary, which we talk about at the annual rich life review — what is our salary going to be? It’s typically the same. I didn’t change my salary for like 13 years. But then we talk about distributions: how does the business look next year, what numbers are we going for, what do we think our distributions will be? We get them on a quarterly basis if we take them, and we have a predetermined percentage for where they go and how it gets split up. All that’s documented. We look at that document once a year in December and decide: is this fair, does this feel good, do we need to tweak anything? And that’s it — once a year.
Sam: That’s where it gets complicated for me. I do this with Sara and I’m like, well, if business goes good it could be this, if something happens — you know, stuff happens. Like if you run an SEO-based company and Google makes a change, your situation just changed.
I have to tell you — and this is maybe a strength and a weakness — I don’t want to go backwards. That’s true in a lot of parts of life. For example, hotels: if I stayed in a hotel room at a certain level once, I’m not going back to a lower level. I want to stay at the same level or go higher. For other people it might be their car — they finally got something nice and they don’t want to go back to the Honda Civic.
Same with money: if we decide we want something, I’m going to be very careful before I commit to recurring spending that we probably don’t want to go backwards on. Otherwise I just wouldn’t do it. If someone starts flying private — that’s a big one — I wouldn’t do that until I knew there’s no financial chance of ever going backwards.
Ramit: That’s rooted in your business being stable and likely to continue growing, or you having enough net worth to float it. What I’m really encouraging people to do is: you don’t have to apply this to everything. Some years you splurge on a restaurant, maybe you go back, maybe not. But if it’s really important to you — we’re sending kids to this school, we’re flying business class — be very careful before you make a purchase that is recurring and you don’t want to go back from.
Sam: How long does this annual review last?
Ramit: Several days. We’re in no rush. We’ll talk for a couple of hours and then we’re off doing whatever. It’s on the calendar — it has a link to all our docs, including the one from last year, which we review. Some of it is structured — those questions about what we want to change, what went well — and some of it is really organic.
I’m an optimizer and I love structure, but that’s become a weakness of mine. I always want the black or white answer. So I’ve been trying to become more intuitive, and I find I’m most intuitive when I’m traveling. What do I feel like seeing? Where do I feel like going? What do we want? I’m trying to bring that to these meetings. The question about “generous and adventurous” — that was an intuitive thing I was thinking about, and when we started talking about it, there was a lot of energy. So we spent a few hours on that. That’s the combination I love: structured and intuitive.
The Monthly Money Meeting [00:27:00]
Sam: What do the monthly meetings look like?
Ramit: We use Monarch Money — that’s my favorite tool for tracking monthly expenses. We go over that, and then we say, “What adventures or things do we have planned for next month, is there any deviation we want to make?” We talk about different goals throughout the year — maybe we want to take the family on trips. “Do we have that planned? What went well last time, what didn’t?” And then: “Do you want to buy anything? Is there anything you want?”
Ramit: I love that. Every time I hear you guys talk about how you do money, it makes me really happy because there’s so much connection in it. I hope that’s inspiring to other folks, because money for most people is not a source of connection — it’s a wedge. It’s something most couples avoid. Most couples substantively talk about money about four times in their entire relationship.
Sam: I guess this is an obvious question, but is there typically like — are there a bunch of wives out there who have no idea what the income is?
Ramit: 50% of couples who talk to me do not know their household income. 50%. I had a couple recently who said, “We’d feel good if we made $120,000.” I’m looking at their numbers — which they prepared for me — and according to their own documents they make $80,000. So I start digging into bonuses. “Oh yeah, we get a bonus once in a while.” I add it all up — it turns out they make about $121,000. And they just look completely dumbfounded.
Because for years they’d been telling themselves, “We’ll stop worrying when we make $120,000.” They’d been making it for years. What it really shows is that the way you feel about money is highly uncorrelated to the amount in your bank account.
So no, most people don’t talk about money. They see it as a negative, as something to protect their partner from. It’s not like chores you divide up — it has to be a source of connection.
Sam: By the way — I want to give you credit for these meetings, but they still occasionally end in fighting. It doesn’t always end well. We’re on the same page to discuss it, but we’re not always on the same page about our wants. Sometimes there’s a winner and a loser in one of these conversations. And it’s frustrating — if I’m the one driving all the time, I want you to care about this as much as I care about it.
Ramit: Sam, I’m with you. In most relationships there is one money person, and this is a huge mistake. It would have been natural for me to be the money person in my relationship — this is what I do for a living. And I very early on realized that would be a horrible mistake. I told Cassandra: we’re going to do this together.
Why? Number one: one day I’m going to get hit by a bus. Some guy from Goldman Sachs wealth management is going to call her — “We’d love to be a steward of your portfolio.” I want her to know exactly about expense ratios and fees, not be defenseless. Number two: it’s always better to have another set of eyes on decisions. Number three: it’s just way more fun to do it together. Where do you want to go next year? Who do you want to be generous with?
And this is becoming a bigger issue because a lot of men die early. In heterosexual relationships, men often leave their wives financially defenseless — the wife doesn’t even know where the money is, much less how much, much less what to do with it. That’s a bad situation.
Sam: Dude, I was telling Sara the other day — ever since we had a kid, I have this weird dream that she dies. And like three weeks after, I’m like… I don’t even know who I pay rent to. The way my household works is I focus on making the money and she is in charge of tracking and spending it — paying the mortgage, things like that. In my dream I’m like, what health insurance provider do we have? Who’s our dentist? I literally don’t know. And it freaked me out.
Ramit: It’s kind of funny when you say it, but it’s not funny if you’re the person who doesn’t know where the money comes from or how things get paid. That’s actually a terrifying situation.
The Seven-Step Monthly Money Meeting [00:34:00]
Ramit: All right, let me walk through the monthly money meeting. It’s about 60 minutes, seven quick steps.
Step one: Appreciation. Always start with something you appreciate about your partner.
Sam: Look at my face right now — what the — is this woo-woo stuff? Where are the crystals?
Ramit: I laugh because we do this, and it’s still uncomfortable. But you told me about it after someone shared it with you — and you added it. So, okay. We appreciate each other.
Sam: Yeah. I told Sara I appreciate that whenever we travel as a family, you always make sure we get to the airport at the right time. Simple. You cannot say enough nice things.
Ramit: Exactly. That’s number one.
Step two: Partner one updates. Usually each partner owns one part of the financial system — maybe they own grocery spending, maybe they handle a specific account. A quick update: if something didn’t go right, “We agreed to spend $700 on groceries, I hit $850, here’s what I’m doing about it next month.” They own it, get ahead of it, talk about their plan. Don’t let it fester.
Step three: Partner two does the same.
Step four: Joint updates. Are there things to talk about together? Hey, what’s up with your 401(k)? Are you getting the right match?
Step five: Review the numbers. I actually don’t look at many numbers on a monthly basis because we plan annually and do a quick six-month check-in. That gives us time to adapt. I’m not trying to track the price of noodles in February.
Step six: Open issues. Anything pending or unresolved.
Step seven: Wrap it up. Always end with “I love you, I appreciate you.” Give each other a hug. Start to align money with feeling good. It might feel cheesy at first. Do it four, five, ten times — you’re actually going to start to feel it.
Conscious Spending Plan for $500K Earners [00:38:30]
Sam: You tweeted out this thing — or it was from the book — with percentages. Benchmark numbers: invest this percent, spend this percent on guilt-free things. Can you do those same percentages but for a couple earning $300K — let’s round up for math, $500,000 a year?
Ramit: I’ll give you the standard numbers first, then talk about how things change at higher income.
There are four key numbers in your financial infrastructure. That’s it — just four. You don’t need to track the price of pickles.
Fixed costs — rent, mortgage, groceries, debt, auto: 50 to 60% of take-home pay.
Investing: 5 to 10% of take-home pay. That’s where real wealth is created, so I’d prefer the higher end.
Saving — emergency fund, down payment, kid’s activities, vacation: 5 to 10%.
Guilt-free spending — eating out, travel, buying rounds of drinks, whatever: 20 to 35%.
The beautiful part: if you can fit everything into these like Tetris — fantastic. You can buy whatever you want as long as you’re hitting these key numbers. Very freeing.
Now, for couples making $500K, a few things change. Fixed costs tend to go lower as a percentage — instead of 60%, you might be at 50% or even lower. Investing tends to be higher. People making that kind of money are typically savvier about it. And the price of bread is basically the same — you might spend double on bread, but you’re not spending 50x more. So there’s more left over to invest. I like to see investing at around 20% as income gets up — let it ride and grow.
Sometimes I see people who are investing 40% of take-home pay, their savings are really high, and then I get to guilt-free spending and they’re at 8%. I ask: what do you guys do for fun? And they always say the same thing: “We go to the park, we have money set aside.” Do you actually spend it? And they both look down.
You know what they do with the leftover guilt-free spending money at the end of the year? They sweep it into investing. “We’re so good — we don’t spend money, we invest it.” That’s a big mistake.
You need to learn the skill of earning money. You need to learn the skill of managing money. But you also need to learn the skill of spending money meaningfully. If you’re making $500K, you should be learning how to spend that on the things that are meaningful to you.
How to Get a Worrier to Start Spending [00:43:30]
Sam: How do you get someone who’s a worrier to start spending?
Ramit: It’s very difficult. I frequently have multi-millionaires on my show where one or both of them says, “We want to learn how to spend more.” And people listening think, what kind of freaks don’t know how to spend money?
Sam: I’m one of them.
Ramit: It’s a very common affliction. Because people often grew up financially insecure — the family always said “we can’t afford it.” The only way they’ve related to money is scarcity. But when the numbers change, the numbers change faster than the psychology changes. You can get to a point where you have more than enough but you’re unable to actually spend.
I went through this. I was an entrepreneur, sold my business, had a windfall. The first two years I paid myself roughly $24,000 a year — which was so stupid, my business was doing fine. The third year was more, like $100,000, which in San Francisco isn’t crazy. So there was this long period of not a lot, not a lot, not a lot — then a lot. And then it took another three years to acclimate to the reality.
Ramit: Most people don’t get a windfall like you did, but it may as well be the same thing — they look at the numbers and still feel the way they felt when they were seven years old sitting around the dining table and their dad said, “How dare you ask for that, we can’t afford that.”
And I know you’ve been on a journey to spend more money. It’s awesome to see you talking about menswear, taking your family traveling — that is not easy.
What I find happens with people who try to change: they make two mistakes. One: they ask for help among other frugal people. I see this in the FIRE community every day — “I’ve crossed my FIRE number but I can’t seem to bring myself to spend money.” And within three comments people are saying, “You don’t actually need to spend money. Save it — who knows what healthcare will cost in 2065.” You’re asking a bunch of frugalists how to spend money. Wrong community.
Sam: It’s like asking me how to go camping. Don’t ask me, I have no idea.
Ramit: Exactly. The second mistake: they try something, maybe they eat out at a restaurant, and the first time it’s not great. Maybe they picked a bad restaurant, maybe they don’t have the palate for it. Or they hire someone to clean their house and they don’t like how the person folds the clothes. So then they go, “This doesn’t work — I’m actually a good person because I don’t spend money.” They create this self-contained tautology that ensures they’ll never change.
A much better way to do it is to build the skills now. Start spending on small things. Discover what you like and what you don’t. Become clear on your money dials. Do it with a partner. Over time you learn that spending money as a skill is often as important as earning and managing it.
Sam: The important thing is figuring out what makes you happy. There have been times where you or I will force what makes us joyful onto the other person. Like, “You like fancy hotels, you should go stay at this hotel.” But that’s not what I get joy from. What I love is services — monthly services. For example, you don’t own a house because you just don’t get joy from that. For all I know your apartment could be pretty modest, because you get joy spending elsewhere.
That’s a really challenging thing for people to get over. They’ll say: “Buy a home, it’s a great investment.” And I’ll say, well, it’s typically not a great investment — that’s not the reason to buy it. “Well, you’re throwing money away on rent.” I’m not throwing money away — I’m acquiring a service, and it makes me happy. And my money is in an index fund growing. They say, “So you shouldn’t buy a home?” No, I’m not saying that either. It’s like I bought a steak last night because it brought me joy. If owning your home makes you happy — and by the way, it can sometimes be a good store of value — do it because you work hard and this makes you happy. That’s a good reason. It’s hard for people to understand just doing something because it brings you joy.
Ramit: I love what you’re saying, and I love watching you on Twitter because you’re one of the few people who actually understands that buying a primary residence is sometimes — but often not — a great investment. People use the word “investing” way too much. A personal trainer is not an investment, that’s a luxury. If I were to buy a house today, that would be the most expensive luxury I’ve ever bought. I will lose millions one day when I buy a house — and I’ll do it with a big smile.
Sam: And you’re going to be ridiculed on the internet because people know you as the guy who says never buy a home.
Ramit: People who don’t actually read what I’ve said — I never said don’t buy a house. I said run the numbers, then consider the non-financial factors.
We use the word “investing” to justify purchases all the time. I’ve had people say buying a $2,000 mattress is an investment. When I ask how they know they can afford it, they say, “Your back is the most important investment you can make.” When I ask about affordability, your answer better have a number in it. Affordability is a number, not a feeling.
My narrow definition of an investment: something that can provide a financial return. Otherwise you’re justifying a $3,000-a-night hotel because the air conditioning is triple-filtered, therefore the hair on your arm doesn’t stand up, therefore you can write a new book that makes you $100,000. It’s not an investment. It’s okay to say “I like this and I’m going to buy it because I like it.” That’s totally fine.
For optimizers: sometimes when you’re talking to a partner who’s not an optimizer, they want to talk about feelings. And that’s important — feelings matter, you’ve got to meet your partner where they are. But at a certain point, you’re running a business, the business of a household, and you need to look at the numbers.
Handling Disagreements: The $5 Iced Tea [00:50:15]
Ramit: How do you get over disagreements? The most common reason for them is there’s no shared vision of a rich life. It’s one episode after another of nitpicking. The perfect example: someone DMed me on Instagram saying, “Can you convince my husband to stop buying iced tea every day?” I asked how much it costs. “It’s $5 every day — we can make it at home.” Okay. Out of curiosity, what’s your household income? She became cagey, but I gently asked her to share it.
Sam: I don’t know — $200,000 a year?
Ramit: $600,000 a year.
So you can see it’s really not about the $5 to him. It was: “Hey, we work hard, this is a little treat I enjoy every day.” To her it was values-based — how she was raised.
So here’s what I do when couples have disagreements. The first thing I always ask: what is your rich life? Couples don’t know. They’ve never talked about it. They’ve only talked about why did you spend that much on a drink. So: what do we want in our life, what’s important to us, do we want to travel, do we want to send our kids to these activities?
The next thing: set up your accounts so you don’t have to have $3 conversations. If your audience is making $200K-plus a year, you should not be talking about $3 purchases. If you are, you’ve misaligned your money systems and you probably don’t have a rich life vision.
My recommendation for setting up accounts: all the money goes into a joint account, and from there each partner has money flowing to a separate individual “no questions asked” account. Both of you know the other account exists, but each of you only has access to your own. If that person wants to buy the $5 lemonade or a $20 tip — totally up to them. That’s their money. That is how you unify your financial relationship and also give each other flexibility.
Sam: I did that this year. I have my own little account. Even though you called me an optimizer, I’m more of a worrier. I feel guilt often when buying things above a certain amount — maybe in the thousands. So I put $20,000 into an account because I got into clothing recently, this Japanese stuff that I love. Pretty expensive — like $600 for a button-up shirt. I’m just deeply fascinated by the craftsmanship, I want to feel and touch it. But I felt guilt around it.
So I allocated $20,000 and could spend it guilt-free. I still feel guilt, but it’s definitely less. I used to feel like I was taking money away from Sara — even though she’s on board, I’m like, I’m embarrassed to spend $600 on a shirt. A lot of it came from being raised poor. That stuff never goes away. You just try to manage it — like any other issues you carry from childhood.
Ramit: I love what you said about “I used to feel I was taking away from her.” The way I see it now when you talk about this — you are actually adding to your own curiosity. Of course your joint finances should be dialed in, your ratios working, money flowing. But two partners have to be intellectually and financially fulfilled. It makes them better partners.
One of the worst things I see — and this happens a lot with men — is men become a shell of who they used to be. You talk to a guy in his 20s, he has all these hobbies. Talk to him at 50 and I ask, “What do you like to spend money on?” He says, “Whatever my wife does.” I say, “We’re not doing that here. What do you like?” A lot of times they’ve lost all their hobbies. I see that in myself — I have to fight to find new hobbies. If it were up to me I would just shrink. This happens to a lot of people, especially men, and I want to encourage us to fight against that.
Spending as a Skill: Hiring Coaches [00:54:30]
Sam: When I was coming up in my entrepreneurial journey, I used to make fun of self-development people. You fall in that category, so do I. I’d hear someone say “I’m hiring an executive coach” and I’d be like, what are you doing, man up? And then I started hiring a fitness coach, then a nutritionist. Could be as cheap as $50 or $100 a month with something like Future — basically just someone to answer questions and tell you what to do.
I started doing that for so many different things. It starts with fitness because that’s the easiest application. Then you’re like — we hired a home organization expert to come teach us. Reading a book and watching YouTube gets you general knowledge, but then you have an expert come in and pay them money. It could be $100 — a cooking class, whatever. And then ideally some kind of ongoing class. It’s the greatest way to learn.
Ramit: I love that you said that. I also love that you said “I used to say man up.” Just think about what’s embedded in that phrase: suffering is masculine, and if something is hard it is therefore more valuable.
Sam: There’s some truth to that — grit is real.
Ramit: I agree. And sometimes we make things too easy for ourselves, there is value in challenge. But there’s no prize given for living a smaller life than you have to. I really want to inspire people: for the things you’re interested in, there’s probably somebody who can help you enjoy it more.
I talked to a guy in the FIRE community who said, “I just don’t really like to spend money.” So I kept asking him what he likes. He gave generic answers. I probed: “Tell me more.” He goes, “I love coffee — I buy these beans.” That was the limit of what he thought he could do. I said, “What if you hired a barista to come to your house and teach you how to make even better coffee?” It had never occurred to him. He later went on to do that. That’s 100, 200 bucks. Incredible.
I had a book on posture — I couldn’t understand the diagrams. So I hired someone to come to my apartment and teach me. That posture coach was transformative.
Sam: Did it work?
Ramit: Dude, it changed my life. I had something going on — when I’d stand I’d find myself crossing my legs, it became uncomfortable on my back. I’m a young guy, why is this happening? So I went from problem orientation to solution orientation. I found her. She came to my apartment. First thing when I opened the door, she looked at me and was shocked. I said, “Why are you looking at me like that?” She said her average client is 75 years old — I was in my late 30s. I said, “Look, I’ve got a little issue, but really this is preventive. I want to learn how to be better before I have problems.” And that is the dream of any coach — someone who comes to you before they have major problems.
We worked together six or nine times. She taught me posture isn’t just about putting your shoulders back — it starts from your feet, your knees, your glutes. The way I walk. She videotaped me walking and we changed that. No more pain. But more importantly, I understand how the body works better than I used to.
Fighting for Simplicity [00:57:00]
Sam: I want to wrap up. This is funny that you put this in the doc we shared, but someone messaged me — a good friend of mine, I love him to death — and he was like, “I want to come on and talk about credit card hacks.” Like 5% cash back and all that. And I get it — that’s a cool puzzle to geek out on. But that’s not needle-moving to me. I don’t give a damn about 2% cash back if it means I need to have ten credit cards and forget to pay one. Just to make $1,000 I’m going to spend ten hours on this. It’s a nightmare.
You have in your stuff: “The more successful you get, the more you have to fight for simplicity.” I’ve found that to be true. As you make a little more money you start thinking, well, everyone else has a wealth advisor, everyone else is investing in private equity, should we do that? And the funny thing is, maybe there’s some level where it makes sense — when you’re worth hundreds of millions — but for most people listening, simplicity is the answer. Is that right?
Ramit: I think so. I understand why when you’re young and up-and-coming it’s fun to do credit card hacking. You’re learning new skills, I get that. But I’ve found it’s very difficult to turn off the grind mindset and become more calm — to run things like a CEO, not a hustler. I see this a lot with personal finance people. I know people worth a lot of money who still do credit card hacks. When we look at how much they actually make from it, it’s negligible. They do it because they cannot turn the page on what got them here. They don’t realize that what got them here won’t get them to the next level.
Part of fighting for simplicity is recognizing that as you advance — financially, relationally, in any dimension — there are things you simply cannot afford to do anymore. I could not afford to open ten new credit cards to save a total of $1,800 a year. That does not compute for what I’m trying to save and invest. So that’s very important: as you advance, you probably have to stop doing certain things that got you here, and think about what the new chapter looks like.
Sam: You’re the man. Thank you for doing this.
Ramit: Always a pleasure, man.
Sam: When’s the book officially out?
Ramit: January 1st.
Sam: Oh, sick. Two or three days from now. Thank you for doing this — we appreciate you.