“We spend 113% of what we make—but we can’t find a fix”

Ramit Sethi of I Will Teach You To Be Rich talks to Michelle, 42, Ryan, 43, for a deep dive into their Conscious Spending Plan. They spend $763 a month on Target, $1,185 a month on Amazon, and $1,230 on groceries—carrying a fixed-costs percentage of 113%. Drastic changes are needed, but Michelle isn’t convinced anything can be done to save their outlook.

💡 RAMIT’S PODCAST NEWSLETTER

🙌 GET HELP FROM RAMIT SETHI

🤳 CONNECT WITH RAMIT SETHI

✅ SUBSCRIBE SO YOU DON’T MISS ANY EPISODES

THIS EPISODE IS BROUGHT TO YOU BY

Produced by Crate Media.

[ramitsethi]

I recently got an update from Michelle and Ryan a few weeks after our call and here's what they shared:

"So far we have been able to cut down the grocery spending, cut takeout spending heavily, reduced our retirement contributions, are reducing some of the kid activities. We are down to 90% on the CSP, a great improvement so far. We’ve also opened a brokerage account to invest some of our savings."

It's great to see your progress Michelle and Ryan, thank you for sharing your story and please keep us updated. I wish you the best!

[krizak]

This child raising is how you end up with adults that say, "our parents never talked about money, we got everything we wanted, but we could see them fight and have anxiety about money a lot." when they talk to Ramit.

[ggppccvv]

Can anyone explain to me why she keeps thinking about "the temporary income drop" when in part 1 she literally explained she has been a stay at home mom for NINE YEARS? Friends, that's not a temporary glitch, one income is your actual life???

[margaretcraig]

When my daughter was in Grade one she burst into tears one day and said” I can’t take this any more … I am doing too many things”. We sat down and decided together that she would continue with one activity. She is now 50 years old and super successful in the business world and an intensely focused person. I attribute it to having free time to do what she wanted and her ability to focus because she had time to do that.

[bradman]

She feels like 200 off target isn't big enough and 200 off target is impossible. Schrodinger's shopping cart.

[CB-mqmn]

I started my kid on an allowance of $20/month in 1st grade and told them going forward mom and dad would only be giving presents on holidays and birthdays. I did it to address the family budget and stop our impulse shopping on toys and treats. This was one of the best parenting decisions I ever made. It had so many positive impacts on them and our family.

Today they have savings, and they’re generous and thoughtful about their spending. They have saved up for 2 major purchases (for them) and when they do this they spend months deciding on their purchase and making sure their bank account isn’t empty afterwards. They feel empowered and they have restraint to not spend their $ on things they don’t really care about.

Give your kids an allowance and teach them how to manage their $. They will likely inspire you with their capabilities,

[kingsgold]

Them unable to say no to their kids is ultimately dangerous. They don’t have control of them, they are the ones making the decisions. Kids want all the things all the time. As parents, they need to get used to telling them no more often. Kids don’t know what isn’t good for them. Parents need to teach them boundaries. They don’t need all the snacks, all the trips, all the fun stuff all the time.

[arga]

A lot of parents need to hear this
Saying "no" to your children because they had enough and saying "no" to your children because you can't afford it are and feel different.
If they learn to say "no" to their children because they had enough, they will never be in a situation that they must say "no" to their children because they can't afford it.

[lysec]

I was waiting for Ramit to pause and respond to Michelle's negative energy. It felt impossible to move forward until she dealt with the underlying cause of what's preventing her from proactively participating in making changes rather than being so defeatist. She really should rewatch this episode to see herself. This was so illuminating because I know exactly how she feels. Sometimes it takes the actual change in the situation to affect a true change in feelings, but waiting for a miracle while doing nothing is just as unrealistic. I truly empathize with Michelle and I wish her well.

[afisanaa]

Underconsumption is what this couple needs to focus on instead of *OVERCONSUMPTION*

[ebullock]

Having Target and Amazon as fixed costs is wild… that gives such an excuse to be able to buy anything at those stores. They need to nail down the WHY behind those ginormous charges - no financially controlled person spends that much at those establishments monthly.

[JenJenANDChrissy]

Dietitian here: This couple sounds like so many of my clients. They want to lose weight, but aren't willing to do ANYTHING to achieve it. They want to eat their unlimited pizza and beer and meet their goal weight...in 2 months. They don't want to feel "deprived" in any way or sacrifice.

[thefinancialneurologist]

We're a dual physician household with two kids, and still don't spend this much, it's wild. They definitely can trim this down but only when they're mentally able to see the danger of their situation.

[lysec]

Ramit may have to do house visits for these types of couples. Supernanny vibes.

[batemanlife]

You have more patience than me dealing with these two. They are making out that spending wild amounts to Amazon is an absolute necessity

[anastasianickerson]

As someone with three young kids who lives relatively frugally, this conversation is infuriating. Our children don’t do any activities (although we’ve done max one before), we spend MAX $200 a month on kid things including two in diapers, and our grocery budget is significantly lower as well. We don’t have a separate Amazon or Target item in our budget. We live a fulfilling life with healthy, beautiful, happy children. The consumerism is wild.

[aprilstiek]

It blows my mind that they have line items for Target and Amazon. It should be groceries, clothing, household/cleaning, gas, out to eat kind of categories. They are so resistant to cutting their spending. If they just gave it a try, I think they will be surprised how much less they actually need than they think. Change the categories and actually choose what you’re spend your money on. Saying that you can’t spend less than 900 on Amazon has no meaning.

[dm]

They are raising children who will expect the world to cater to them. Do they ever hear "no"?

[nsnsnhdhdje]

I think this couple would benefit from attempting a no-spend month just to exercise the want vs. need muscle, maybe even taking a break from Amazon to deprogram themselves. Also attempting to only go shopping once per week for groceries and once per week for any kids or other household needs, and delaying any other things - the wants - that come up and adding them to shopping lists. One thing that's worked with our kids is not saying no, but "we'll add it to the list." Just generally, this couple needs to stop shopping as a recreational activity/hobby. Most shopping should just be seen as a chore. This episode definitely inspired me to cancel a bunch of amazon subscribe & saves that aren't essential.

[XanderGaming]

Wow Ramit, you were pulling teeth with them, you handled this situation perfectly