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I had a conversation a couple of days ago, actually, with James Saxton, who's the divorce expert.
He's a divorce lawyer by trade, but he knows more about divorce than anybody else.
And he said to me there's two things which cause people to end up in his office going through a divorce.
Number one is cheating, infidelity.
And the second thing is money problems in the relationship.
So I find it especially sort of pertinent to have this conversation with you about couples' relationship with money.
Because clearly, one of the things that is most likely to end my relationship or, I guess, prevent me getting into one is this financial avoidance that most of us engage in.
You've interviewed hundreds and hundreds of couples about money on your podcast.
What have you learned about our relationship with money in relationships from that?
I've learned that 50% of the people I talk to do not know their household income.
90% of the people I talk to who are in debt do not know how much debt they're in.
And 100% of the people I talk to in credit card debt also have trouble saying no to their children.
Isn't that shocking?
Each of those things, 50 do not know how much income they make because most of us are simply living by looking at our checking account and that's it.
The debt part kind of makes sense.
Why would you want to know how much debt you owe?
You don't really want to think about it, so you ignore those emails and envelopes.
And the credit card debt part, that is really interesting.
The idea that if you can't say no to spending, so you've racked up a bunch of credit card debt.
The same principle applies to saying no to kids.
For me, when I discover these, I find them absolutely fascinating.
But the good news is you can also change these things.
And what's the difference between men and women in terms of spending habits in a relationship?
Secrecy avoidance arguments.
Well, let's start with the roles.
Men always describe themselves as providers.
Always.
That's what we are taught.
It exists in culture.
The problem is, of course, what happens when they are not the top earner, which is happening increasingly more now.
So when I often ask them, who are you, financially speaking, if you're not a provider?
And they're just stumped.
But there's got to be something more than simply being a provider.
You can be a provider and you can be a nurturer.
You can be a provider and you can be a helper, a leader.
There's so many different ways.
Often what you'll see with women is discussions about a secret bank account.
I don't think you should have a secret account.
I do think you should have an account that is yours only, but no secrets in a relationship.
What about arguments as it relates to money and relationships?
What are the cause of the arguments?
Is it someone spending too much?
Is it hiding money?
Is it something else?
It's usually not hiding money.
That's very small extreme.
The biggest phrase that i get from couples is he or she's a spender and i'm a saver.
So it's creating this identity that they're a spender, i'm a saver, or they don't want to talk about money ever.
Why can't i get them to finally sit down with me and get on the same page?
That's a phrase that's tossed around everywhere.
When i ask them what is getting on the same page, The answer is I don't know.
I just want to talk about it.
So when it comes to money, yes, there are the numbers that we need to understand, of course.
But what I often tell people the way you feel about money is highly uncorrelated to the amount in your bank account.
That is why I speak to so many multimillionaires who still worry about money.
They think if I just have $50,000 more, $500,000 more, $5 million more.
Well, guess what?
I've had all those folks on my podcast and they still worry about money.
That means there's two things you need to do to master your relationship with money.
One, you got to know your numbers.
This is a language you have to learn the basics of personal finance.
Two, you have to master your money psychology.
That means you need to change the way that you talk about money and behave with money so that you can ultimately change the way you feel about money.
You do those two things, you're going to have a very healthy relationship with money.
We'll go into all of those things and how you do them.
On this point of gender roles.
Obviously society has changed in the last couple of decades in terms of equality and more women are in work higher level positions in corporations in the C-suite, earning much more money.
This has caused a shift, I should say, in the sort of typical gender roles and assumptions of what each gender is supposed to be doing in couples.
And I'm wondering now, with more women earning more money in many cases they're going to be earning more than their husband in heterosexual relationships
Have you seen new dynamics and new issues created because of this in terms of like insecure men feeling emasculated or the woman not being happy that she's contributing more?
And I ask this because I had someone on my podcast a couple of months back who said to me that I think 70 or 80 of women expect that their romantic partner will earn more than them.
But that gap is closing now because women are earning more and more money.
I'm just wondering if you've seen in those couples scenarios where the woman earns more and it's causing problems.
I've seen it all the time.
I've seen it all the time.
I think that we see different gender dynamics.
I recall one episode where I spoke to a young woman and her boyfriend.
She was around 40 years old.
She made way more than her boyfriend.
Care to guess how much she makes per month?
$20,000?
$200,000 per month.
She has a business.
It's doing very well.
She's around the age of 40.
Now, her boyfriend was never taught about money when he was growing up.
Most people are not.
He never learned about investing.
Certainly no one was telling him about a Roth IRA when he was 12 years old.
And he had started his own business and he was on the upswing.
He's making a few thousand dollars a month.
Good for him.
She's making 200 grand a month.
Her parents started talking to her about investing when she was five years old.
So here we already see a difference, not just in gender, but in socioeconomic status, okay?
And over time, that progressed.
So they come to me and she says, I want him to pay for dinner occasionally.
Fine, super reasonable.
He even said, no problem, I want to.
So he would take his credit card out And he would offer to pay and she would say no, I want you to contribute more to your IRA.
So in many ways, she wanted him to pay.
She wanted to feel taken care of, which is totally reasonable.
But when he offered, she said no.
So this is the kind of thing that I often see, which is I think I want one thing.
But when I get that thing, I don't actually want it.
It doesn't make me feel the way I thought it would.
I want to earn 50K more.
I think that'll make me feel safe.
Oh, my God, I am earning 50K more.
It doesn't actually change the way I feel.
So I worked with this couple and I helped them understand why they both felt this way about money.
And, you know, from the outside, it's like this is so irrational.
If you make more, just pay more.
If I were in that situation, et cetera, et cetera.
None of that stuff matters.
When you are in the couple in that relationship, you will feel a certain way.
And we got to work with you individually, not what everybody else says.
In the end, the conclusion that they came to was she wanted him to occasionally pay for dinner, but she also wanted him to fill up his IRA.
So this is what they did.
Every so often before they went out to dinner, she would give him her credit card.
And she would say, here, I want you to pay for tonight.
And he said, cool.
He understood it.
They went out and that's what they did.
Now, to us sitting here, we're like, this dance makes no sense.
Why don't they just do it this way or that way?
Guess what?
Every single one of us has some irrational thing we do with money.
Every single one of us.
And I think that we are ready to actually have conversations about how we are irrational.
Money is not just dollars and cents on a page.
That's why you don't feel good about money even when you have more than you ever thought you would.
That's why you worry about money, but you have never read a single book on personal finance.
We are all irrational, including me.
And when you get into a relationship, You got to acknowledge that.
And then you get to say, hey, what is our vision of a rich life together?
Let's build that.
If it means we do a little dance about the credit card once every two months, fine.
Do we both feel good?
Is it fair?
Then I'm good with it.
What's going on there with her?
Because it sounds like there's this battle between her mind and maybe her heart, or it's almost like the social expectation is coming in, but then her brain is saying no, invest in the IRA.
And an IRA for anyone that doesn't know in other parts of the world.
It's a retirement account.
A retirement account.
So she's saying invest in the future, but also buy my dinner.
Well, it's the same.
We all have these things that society has told us, but then we don't quite agree and we're not sure what to do.
Last time I was here, we talked about how you don't necessarily need to buy a house in order to live a rich life.
And in my case I have rented for the last 20 years by choice and I made more money renting and investing the difference than I would have by buying a house.
And this is shocking to people.
Like, we saw the comments last time.
People went, berserk.
How can you talk about renting?
You're just throwing money away on rent.
And this is something we have been facing fed constantly for generations that in order to be successful, you must buy a house.
So when somebody like me comes around and says, actually you should run the numbers because sometimes renting can be better,
People are shocked.
Same thing with if you want to be taken care of, or you want someone to treat you, or you want someone to pay for the first date.
Same thing when men come and they talk about being a provider.
But in certain relationships where they actually earn less, I'll say to them if we look at the numbers, you're not the provider.
So who are you?
And they're stumped.
And that is when we need to start grappling with the idea that maybe what we were told is not exactly true for us in our situation today.
And that's okay.
Do you think it causes more problems when the in terms of the relationship dynamics and that sort of emasculation and you know, the man not feeling like a provider, when the woman earns more money than the man?
From what you've seen,
Not necessarily.
I think that it is a different framework than we're used to.
Yeah.
When we think about my parents.
For example, my mom stayed home with us.
My dad went to work, single earner.
Simple.
Everybody knew where they stood, what the roles were.
It was very simple.
It's very difficult to do that today.
Housing is historically expensive.
Healthcare is expensive, especially in the US.
And so you have two people earning.
In urban cities, you have young women earning more than men in their 20s.
A lot of us are trying to figure out.
What does this role mean for me and for my partner and for our relationship?
That makes it tricky.
I wonder if a lot of men are just choosing to remain single until they've kind of worked on themselves.
Because I think actually that's probably the path I would have taken if I'm being completely honest.
And what I kind of did take is I didn't have a relationship until I was able to really provide.
Oh, the P word.
Yeah.
Yeah.
And where did that word come from?
Provide.
Like watching my father, watching movies, everything.
Exactly.
Yeah.
No one ever says like, you are a provider, but we learn it from a million different perspectives.
And yeah, I hear a lot of guys.
I mean when I was living in New York and I had a lot of single friends.
Topic of conversation was I'm not ready to get married.
I need to get to a certain point in my career first.
We have all these words for it.
And deep down, there's a feeling that we're often expressing.
Maybe I'm not ready.
Maybe I'm not enough.
Maybe I need to do X, Y, Z before I do the thing that I want.
And so part of what we talk about when it comes to relationships and money is like let's actually shine a light on that.
Let's not be shy about it.
If you want someone to pay for your dinner, fine.
That's totally fine.
Let's have that conversation.
If you want to be the sole earner in your household, okay, let's see what it would take.
And too often, we don't have those conversations.
We just dance around them for 50 years.
Who should pay for the first date then?
My answer is...
Doesn't matter.
It would be nice if the person who suggested the date pays, but I think we spend way too much time focusing on the first date and way too little time thinking about the next 14625 days.
It's like a couple who's obsessed with the wedding.
Fine, you want a nice wedding, great.
What about the marriage?
Same thing with money.
First date?
Okay, we can have that conversation, but aren't you more interested in how your partner thinks about money and talks about money?
Are they a cheapskate?
Are they generous?
Are they abundant?
Did they grow up the same or different than you?
That is something we don't talk about.
Meanwhile, we have 5 million YouTube videos on who's gonna pay on the first date.
We are missing the real point.
The point of money in a relationship is not just about the first date.
That's fun for clicks.
But it's about, do we see money the same way?
Do we connect?
Are we going to be rowing in the same direction?
Or are you going to be doing that and I'm doing this and we can never get aligned?
You can only make a first impression once, right?
And if you are a guy, this is just how I feel anyway.
If I go on a date, a first date, with a woman, and we have a wonderful date, it's a nice restaurant, and then it gets to the end of the day and then I turn to her and say, shall we split the bill?
I couldn't even say it with a straight face, frankly.
I definitely couldn't ask her to pay.
Yeah.
I just could never.
And I think if you anonymously polled 10 of my female friends and said how would you feel if on the first date, the guy asked you to pay?
I think privately they would say, that's a bit of a turnoff.
That's a red flag.
That's an ick.
I think probably that's true.
And again, it goes to the power of socialization, right?
Yeah.
Culture is very difficult to change.
We got to admit that.
We got to acknowledge that.
And when I was dating, I paid for dates.
So I don't have a problem with it.
I like to be generous.
I think that when you are in a relationship, you like to know that your partner is generous too.
Now, generous comes in lots of ways.
It could be paying for dates.
It could be planning a trip.
It could be being thoughtful and buying extra toothpaste because we're running low.
There's so many different ways to be generous.
But generosity for me would be a value.
Paying for a date.
Sure, I paid for dates.
I'm happy to.
I like to do it.
But generosity to me is way more important to talk about that in a relationship versus the date itself.
Because chivalry, you know this idea that the man is to lead in that regard, and to you know, open the door and open the car door and pull out the chair.
Yeah, but think about it.
I agree with all that stuff.
I support it.
But think about what message that sends when you tell men you're supposed to be chivalrous, but there's no real context, no real teaching around it.
And let's say you have a 26-year-old guy now who's earning less than his girlfriend.
So he wants to be chivalrous.
But for him, he's like, well, look at our bank accounts.
And so what I want to emphasize to people is you can be chivalrous.
You could be generous.
Money is just a small part of that.
Let's not over fixate on who's paying for tapas.
Okay.
And let's actually think about the important things.
When it comes to money, we are so obsessed with $3 questions.
People are obsessing over, should I buy this coffee?
Can I afford this appetizer?
On and on and on about 3 questions.
We totally neglect the 30000 questions or the 300000 questions.
Is this person financially aligned with me?
How do I even find out?
Am I investing 5% to 10% of take-home pay every month?
Are we doing it together?
Do we talk about money regularly and proactively and positively?
Those things matter, and they're actually worth hundreds of thousands of dollars.
These $3 questions, including who's paying for appetizers or should I buy a latte, irrelevant.
In fact, get the big answers in life right, and you can buy all the appetizers you ever want.
What are the financial red flags in a relationship then?
Number one is they don't want to talk about money.
If you don't want to talk about money, red flag, the biggest red flag of all.
Because we could differ on how we see money.
We can even have different values for a few things.
But if your partner simply will not talk about money, you have a huge problem.
Why?
If you can't talk about money, then you can't even understand where they're coming from and they are not curious about what you want.
So how are you ever going to get on the same page?
Think about this.
A lot of people think we need to have the conversation about money.
As if it's one conversation.
Would you have the conversation about raising kids?
No.
You'll have thousands in your life.
That's the way it should be.
Money is very much like parenting.
Not like, should we play pickleball or tennis today?
Irrelevant.
So we want to have lots of conversations about money.
And that means we need to, first of all, be willing to talk about it.
And then we need to find a way to have fun doing it.
Why don't we?
And who doesn't?
Is it men?
Is it women that don't do it more?
Who's not talking about money and why aren't they talking about it?
It's not about gender.
It has nothing to do with gender in terms of who does or doesn't talk about money.
There are avoiders.
That's one of four categories, money types that I've identified.
Avoiders hate talking about money.
And they will use a series of conscious and unconscious techniques to avoid talking about money.
They'll say things like...
Why do you always have to talk about money?
Can't we just have a nice night out?
Or you're so much better at this.
You just handle it.
You're just so much savvier at this stuff.
That's an avoider.
Do they know their own financial situation?
No.
So they don't know their own financial situation and they don't want to talk about it.
Correct.
And by the way, we all have something like this.
It could be our fitness.
It could be our relationship with our parents.
There's something in our life that we know we should deep down, but we avoid it.
Yeah.
And there's no... there's no immediate consequence.
Like if I don't call my college friend, it's fine.
I could probably call him tomorrow, and you can go on and on and on like that until one day you can't.
Same thing with our fitness.
It's very easy to procrastinate on fitness or money because it's not like your house is being taken away or even your cables being shut off.
It'll probably be fine until one day you hit this brick wall and it's not.
Hmm.
So that's the avoider.
That's the first money type.
Yeah.
Next up, optimizer.
I have a soft spot because I am an optimizer.
Optimizers, we love to live in the spreadsheet.
It's like, let me sit and calculate this.
And what if I run a compound interest calculation, a Monte Carlo calculation?
And what if we do this but not that?
I love calculating everything.
And left alone, I would sit there and do that for the rest of my life.
The problem is you can take it a little too far.
Now, I don't think I've taken it too far.
I think I'm perfect on my spreadsheets, but my wife has taught me enough's enough.
We've won that part of life.
Let's focus on another part, connection and fun and experience.
Are these people often thought of as boring?
Yes, they are.
They are.
Deep down, they are boring.
I was boring when I was sitting there thinking money is only about numbers.
It's not.
Money is about adventure and possibility and generosity.
And you will often find optimizers.
I'll give them a challenge.
I'll give them a hundred dollar challenge.
Also, you have to take a hundred dollars in the next week and spend it on yourself.
They cannot do it.
They will spend it on their dog.
They'll spend it on their kid.
They'll spend it on their partner, but they will not do it for themselves.
And I go, why didn't you do it?
They go Ramit.
Do you know that if you put a hundred dollars in the SP 500 and you compound that for the next 45 years it'll turn into this much?
I go, I don't give a shit.
Spend the money.
Because money is not simply meant to be hoarded, right?
It's meant to create a rich life.
And when you have optimizers, the thing is they can get you to a very good place.
They will probably have your account set up, dialed in.
They'll be investing.
Great.
They're going to be very proud.
Look at the compound interest returns.
All that is fantastic. but it can be taken too far.
These are the people that die.
And then you figure out that they had like 9 million in some saving account.
What a waste.
They never tasted the caviar, but they've got... Yeah, like people send these newspaper articles around like, oh, local librarian discovered to have $9 million.
And I go, what a tragedy.
What a tragedy to live a smaller life than you have to.
I want you to save.
I want you to invest.
But I also want you to try a nice meal.
Or if you don't like nice food or you don't want a nice t-shirt, also fine.
Get super generous.
Give that money.
Surprise the people around you.
Tip 50%.
So those are optimizers.
The third category is worriers.
They love to worry.
Typically, they picked up worrying from their parents almost always.
And their entire relationship with money is worry.
Are we going to have enough?
What if we run out of money?
What if we don't have enough to pay at the gas station?
And oftentimes, it's very surprising because I told you that.
50% of couples don't know how much they make, right?
So they'll say like, we need more.
We don't have enough right now.
And I'll ask them, how much do you think you make?
This just happened a couple of weeks ago on a podcast episode.
They thought they made around $70,000 a year, okay?
We add up all their stuff.
They make $120,000 a year.
So I go, well, here you go.
You wanted to make an extra 40K.
You actually make 50K more than you thought, right? do you feel any better?
And she goes, no.
Because the way you feel about money is highly uncorrelated to the amount in your bank account.
So worriers worry.
That's how they relate.
They can't imagine any other relationship to money.
And my job is to help them realize, first of all, let's actually look at your numbers.
Let me help you understand what it means.
Do you have enough?
What does it take to have enough?
And then can you start to develop a new relationship with money?
It's almost like a new taste bud.
I'm never going to tell you to eat tomatoes if you hate tomatoes, but I am going to teach you.
Maybe you like okra and we can develop a new taste for that.
Finally, the dreamer.
The dreamer believes that success is one deal away.
If we just close this deal, if I just get this thing and they tend to fall into get-rich-quick schemes
Lots of scams, MLMs, a lot of crypto shitcoin scams, like all this BS.
But they are extremely resistant to calm, low cost, long term investing.
In other words, the way that most people build real wealth.
They think it's boring.
They even have little phrases like oh, I don't want to be stuck in a nine to five like those suckers.
I'm like, that sucker makes 10 times what you make.
What are you talking about?
But they have simply been surrounded with the idea.
One more deal. and I'll finally make it.
They must be hard to be married to.
It's impossible.
It's really, really difficult.
Not only do they not want to talk about money, when they finally do talk about money, they're almost living in a different world.
Often you will find that dreamers can only dream because they are being subsidized by someone in their life, usually their partner.
And if their partner were to leave, for example, the house of cards would collapse.
And actually that's... usually the only thing that gets them to truly change.
What you just listened to was a most replayed moment from a previous episode.
If you want to listen to that full episode, I've linked it down below.
Check the description.
Thank you.
