283. “We have 3 kids and live paycheck to paycheck. Are we screwed?”

Michelle (0:00)

We're trying to figure out, okay, how are we going to get the kids to school? Or which bills we could skip this month? Because I feel like sometimes we're drowning.

Ramit Sethi (0:08)

Your fixed costs are 87%.

You have very little savings, you have kids. If something happened, you all are in big trouble. What solutions have you looked for, engaged with?

Michelle (0:18)

We've done credit cards, personal loans. We have looked at bankruptcy.

Jeff (0:21)

My philosophy is I give her the money and she does what she needs to do with it.

Ramit Sethi (0:27)

Does it work?

Michelle (0:28)

No, I don't always feel like I know what I'm doing. I feel like I'm just piecing things together so we can get to the next paycheck.

Ramit Sethi (0:35)

Why is it you?

Michelle (0:36)

Honestly, I don't trust Jeff to handle the money.

Jeff (0:38)

I'm in my own little world. I just don't look at it. If I don't ask about it, then I don't have anxiety about it.

Ramit Sethi (0:45)

You both came on Money For Couples. The only way that two of you will succeed is if the two of you are a team. Right now, this is the opposite of teamwork.

I'm about to speak with Michelle and Jeff. They're 45 years old, they have three children, and in their own words, they are earning more than ever before, but they are living paycheck to paycheck. Now, one of my favorite parts of my Netflix show was being able to look at my guests' actual spending before I ever met them. And now with Monarch, I can. Monarch is a private personal finance app that brings all of a household's accounts, checking credit cards, loans and investments into one clean dashboard. And they've built my Conscious Spending Plan directly into their product, exclusively for my audience. That means fixed costs, investments, savings, guilt-free spending are automatically tracked as a percentage of take-home pay. So if you want to see your Conscious Spending Plan in a living, breathing dashboard that updates in real time, you can try it for free and get 50% off your first year of Monarch Core with code Ramit at monarch.com/ramit.

Loans, they have a Nissan Pathfinder for $48,000. What? That's a lot of money. Whoa. Okay. So their car payment, I think, is $999.

Klarna, why are you using Klarna? I have a lot of questions, so let's get started with Michelle and Jeff. Michelle, in your application, you said we can't get ahead. We're making the most money we've made in our adult lives, and it feels like we're still living paycheck to paycheck. Is that still accurate?

Michelle (2:28)

Yes.

I was in the process of trying to figure out how to make our bills that month. We had just started working with a debt management plan, and I was trying to figure out a budget. I was trying to figure out how are we making as much as we are, but I still go to the grocery store on Sunday and worry about the total. I'm trying to piece it together.

Jeff (2:57)

The worrisome on our face of, I got to move this money from this account to this account, or split it up between these two accounts so we can have money to feed the kids for the week. It's the same, the worry, the anxiety and the stress on our face is not something that I want to see.

Ramit Sethi (3:20)

Michelle, how long have you been the person in charge of managing the family finances?

Michelle (3:26)

Since the start, we joke that our relationship started with me taking his money in Monopoly.

Jeff (3:33)

Oh, uh-huh. My philosophy is I give her the money and she does what she needs to do with it, then I take care of the house.

Michelle (3:42)

And it just sort of continued that way, I think because I had more experience at the time, I'd been living on my own for a while. So I was more familiar with doing things like taxes and insurance and all of that.

Ramit Sethi (3:57)

Got it.

Jeff (3:58)

I have to ask her how much I make a year because I don't look at my pay stubs. She set up a 401k and for me, this last week or two weeks ago, because whatever we need to do to make her feel secure and comfortable and financially ready for the future, I'm both for it.

Ramit Sethi (4:18)

Okay. How long have you been married for?

Michelle (4:21)

It'll be 20 years in January.

Ramit Sethi (4:23)

Congratulations.

Michelle (4:25)

Thank you.

Ramit Sethi (4:25)

That's cool. That's a big one. 20 years.