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Money and Relationships

Lesson 11 from: How to Make Money

Ramit Sethi

Money and Relationships

Lesson 11 from: How to Make Money

Ramit Sethi

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Lesson Info

11. Money and Relationships

Lesson Info

Money and Relationships

Money he and relationships a big big topic we're going to touch on this as we wrapped the course today a lot of people watching have boyfriends girlfriends husband wives where money is a touchy subject anyone in here have a partner or a parent where you differ on money okay and tell me a little bit about that started on um that's hard question um so my husband I differ greatly uh now that I've been here kind of understand a bit more but my husband's parents he was a director of finance for a large bank in new york city so in a lot of whose family worked for the bank so uh I think he was military he knows nothing about finances but he would never admit that I think for him it be uh kind of a shame like a pride issue so if you ask him for something he always say yes because in his family they spend they know how to invest they actually set up a account for our kids for their college because we didn't know what it wass so to him it's a really touchy subject he doesn't want to talk about i...

t he just wants to provide interesting okay and he he would never admit it but I think he personally just kind of feels like well my family is really really good at this like that's their job and I don't know anything so he'll kind of kaur that power. But, you know, I mean, he'll walk away like he doesn't wantto look, you know, you just don't wanna look bad in front of this camera, of course. Ok, very good. We'll come back to that. But that's. Very interesting. A lot of gender roles going on in there. Not a family relationships going on there. Okay, who else has got on area where you differ from a partner apparent? Anybody else? Cathy, did you say you had one getting divorced? Okay, so our extreme? Um, yeah, so my husband was very controlled about money, any of the really big scarcity thing and a lot of discomfort with me starting my own business and the uncertainty, and I'm very comfortable with uncertainty and change, and so I think, and I have come from more of an abundance perspective, so it was just sort of were constantly butting heads about that, and he had one system. And not that I got it. I completely understand. I mean, considering how all the emotional gamut that we went through today and that's just for us. Imagine bringing two people into a system. Imagine changing the way you think about money for not just one but two it's, not even to its almost like, exponentially more complicated. Because you got all these emotions all these historical trends gender roles all kinds of stuff going on so we'll go to the web in a minute but I want to give you guys a quick little script a little something you can use with your partner now look ah lot of people watching may not be married that's fine lot of people watching maybe in relationships or not that's fine as well the fact is let's again follow along with the I will teach system most of us are very similar to each other we're going to be in a relationship we're going to have to talk about money so why not plan for it ahead all right? One thing that I I see a lot of people doing his they'll come they'll literally complain about money for thirty years I like I said they would have ever read a good book they won't even really talk to their partner about money they'll just nag you get one person nagging you get someone else being super defensive you got all this avoidant behavior because people don't want to talk about it just sound familiar to anybody right it's like we could write a soap opera based on this it's so common and yet no one actually takes the time to learn how to talk to their partner about money it's like you will see the same thing happening for thirty years you know uh somebody will buy something oh that's too expensive we're trying to save for this this isn't working why don't you ever you know responsible blah blah blah blah all right we can write it one thing I like to do with with when I talk about money and relationships and again tested this with many many people instead of no which is what most people how they relate to their partner they say no we can't buy that we can't spend that no toe actually start off with yes and saying what do I want to do what what do we want to do with money that's really fun let's start talking about yes we want to take a trip to tahiti great so let's just kind of like ballpark it out like do you want to do that you get the yes I feel like what do you think that would cost all right well let's figure that out ok it's going to cost fifteen hundred bucks all right so how do we do this notice what I'm doing by the way I'm asking a million questions even if I might know the answer for example when I start after watching this let's say I go home to my husband or my wife I might say something like um hey you know I was watching this like dude on this weird video somehow I found it on twitter and like he was talking about opening up this like savings account like I don't know he said it was like a pretty good savings account he uses it and he has a bunch of people who read his stuff they use it like what do you think? What should we do with our savings account ps you already know the answer to this you know, you should just do what I said, okay, but you actually have to almost supplement you have to almost bring yourself to it a lower level and say like what do you think? Why? Because you have to get by in and actually you want to know what your partner thinks your partner might be like no and you're like, oh like how come what's up with you and you you peel back the onion and you find out that you know he's petrified of opening up another savings account because his parents had the same kind of depression and it was close and he could never get his money out whatever you're going to find that out but you start asking questions instead of going back and saying I saw this guy I bought his book it's awesome you're stupid you need to open this account that's not going to go well, all right, I'm not that emotionally sensitive and I can tell you that's not gonna go well, so s so I start by asking a lot of questions what do you think? How should we do that? Also, don't press it really hard up front. This is a marathon process, so I might say something like, you know, hey, I checked out this guy's video. It looked pretty interesting. He said we should open this account like, what do you think he's going to tell you whatever and then you say ok, well, like, hey, is it cool if I send you the link to the article or the link to his book or whatever? But we take a look at it let's just talk about it next week, okay? Notice I'm slowing it down what most people do when they're going to start nagging bone, let me hit you with a hammer. You did it wrong. You can't do this. We can't do that wrong bad it's really bad. Take a look at it. Let me know what you think let's. Just talk about next week. So next week, what do we do? Anybody want to pick this up? What would you do next week? Based on what I just said, pretend you're me now, uh, what would you do? Um, next week follow up like slowly. How would you do it just I don't know my husband's opposite he's, yes. We'll get to you we'll get to your husband in a minute well I know that I'm not trying to okay okay let's try yvonne what would you say based on what I just slowed it down take a look at this account I gently revisited and now bring it back up say so did you have a look to do did you look at that one that was about negotiating blah blah blah you know and somehow try and get his experience from it and let him talk good let him talk again men and women both ok this works for both genders although works a little bit better with men who tend to be a little bit more defensive about money because it's something we should know all right so what did you think about it? I don't know I'm not really sure I like what this guy had to say but you know what? We have this account and it seems okay I kind of like the idea of moving over but I just want to check with you notice my tone alley notice how I'm asking question I'm not really sure but notice that write something you can't get from just reading a script something you can get from watching somebody do it so uh that's one way to sort of get the discussion started about how to switch over to an automation system okay I'm just giving you one piece of the puzzle I know you're smart enough once you figure out how to switch to a savings account, you're gonna start seeing a lot of different benefits. Okay. Hey, so that's pretty interesting it's working really well, what do you think about this and on and on and on and it might take you in extra two months to automate everything but so be it the rest of your life is a long time. The next thing is what happens if you haven't overspending partner soul classic it's just ridiculous you know, the guy's buying elektronik so all the time I mean, we know these scripts right? Men, women, et cetera. One thing to do as I said is to agree on a joint plant together notice I'm not starting with what you can't do but hey let's actually do something together I was thinking we like I really want to go to a warm beach place in february. Tahiti what do you think about that? Great. So you both agree we're making small systematic agreements and concessions t know I don't like tahiti. I want to go toe whatever bali ok, bolly sounds great to me. Pick your battles and, uh you say okay, bali so like let's figure how much it's costing how do we do that? Okay, we'll go on expedia or whatever and look it up so we realize that it cost us two hundred bucks a month to save up for this trip for ten months fine so then it's like hey, we're we gonna go how we going to do this? This is where a lot of things break down so we can't do it oh we can't do this invisible scripts come into play because no one has actually systematically gone through you know, how do we approach the two headed savings approach how do we earn more what can we call a negotiate down things like that? All those people who negotiated stuff today take that money and use it for something fun so we agree on it and we agree okay? We're going to find where there's money coming from we're going to put it into our system et cetera okay, I'm skipping over some of the details but let's say you come home and he's bought a four hundred dollar cell phone six hundred dollar cell phone and you know you can't afford that based on the conscious spending plan. So what do most people do bone get really mad start with this and just it's bad right? Really angry yelling what how could you do that again? We talked about this we agreed on this and then and then he says, uh you're always nagging me right there's not a good situation to be in um instead a different approach to say hey that's that's a pretty cool for what kind of phone is that? You're looking at it you actually genuinely interested to say listen, just out of curiosity and totally not coming down but you know are we still cool? Are we still on track with our plan for bali put it on him because what have you done here? You're not angry at him or you're not angry at her or whoever it is it's the system you both agreed on something you're just pointing at the agreement it's not about you or him or her it's about the agreement if you both agreed on it and you've both kind of come along together, then what can we find? We find that uh you know, a lot of times people say, uh, you know what, you're actually right or no, I didn't think about that it's a totally different reaction that getting defensive because they've already psychologically committed to going to bali and even to committing to how much money they're going to put in per month you see the difference a lot of nods here in studio let's pause right here and take questions and reactions from people what are the reactions first describe the other person male film, male or female you given them the opportunity to take responsibility themselves as opposed to you pointing your finger and being all down on them exactly and that's just way more peaceful coexistence approach we're asking questions let them explain to you don't jump to a conclusion maybe they got an extra bonus at work for five thousand dollars you didn't feel like you don't know about so why come in hard and strong and said, hey, I'm just curious I'm just an innocent doe trying to make it in this big world don't okay what else? What else? What what were the reactions done? Nothing okay, we'll come back we'll come back to the u s stuff anybody else lot of nods here justin just like the idea of just talking through it like it's we treat everything like it's our home it's our money so we have to talk about it. We we try not to jump on each other when we did the first year of marriage and that was a tough year marriage. Yeah, and uh uh but no it's it's it just makes things go so much smoother when you're, uh when your partner can, uh, accept what they've done north north put it through and usually it's me and you know, I spent much it's like okay, let's think it through yeah, you notice by the way that the bali example was very intentional because I did not say hey, our number one goal is to pay off debt because what do you think happens if you like? If you're faced with a bright shiny phone or paying off debt it's like screws, I want the phone. But if you have something that you jointly agreed on that a super positive and fun we started with you. Yes, we could start with no, which is what ninety nine percent of people do when it comes in. Then we start with yes, what we both want to do in our doreen situation working towards that. So if you spent six hundred dollars on this phone that's actually that's kind of weird because, like I thought we both wanted to go to bali together. I still do. Are we still cool? Noticed that totally different than putting people down? Yes, that into when you return from bali and reality hits. Yeah, exactly. Okay, great. You land. Okay, here's, my automation plan. I want you to sign off on this right now. That's a great question. First of all you're you're building up that muscle of agreeing to save. Remember how I told you one of them biggest challenges of everything I've talked about is actually contributing that first fifty bucks and from then on, you can turn that tooner strategy and what you did in this case was you basically set up a sub savings account and you were paying two hundred bucks a month towards whatever. Whatever you now change that because you found out you could live on less than two hundred hours last month. So now it's like hey, that was, like, incredible. We went on this vacation. It was amazing. It was so romantic, we didn't fight about money at all. We had more than enough money to pay for everything. We stand this amazing hotel. What else should we do together? I'm like really excited. I feel like we're actually in control. What else? What else can we do together? Not I want to pay off all this stuff now, what else can we do together? And of course, you want to navigate the conversation so that maybe its debt, maybe your partner has something they want to do. So you compromise there. But you've basically built that muscle of automation of jointly working together. And now you can just substitute in whatever for bali. So you started with fun. Now you can turn it, start with what you want. Now you, khun, turn into what you need, okay, let's to go online. So we have a lot of different reactions. Tio, when you start talking about relationships, photos said my dad worked in construction long hours on my mom told me that starting a business was unstable and for a couple years ask me if I found a real job yet my in laws were ibm lifers and thought the same thing even my wife wanted to know when I plan to look for some time yeah um it's uh again missy I have no partner close family to clash with on money philosophies but my parents were poor immigrants who just worked hard at medium level jobs and saved everything to the expense of any fun clothes even unnecessary health care. Yes, very good. Okay, so it's not just for husbands and wives absolutely. Parents are huge influence our money going up an interesting question from scott see who says a couples that pull all of their money together versus couples that keep separate accounts, comments, observations yeah, I have an entire way to integrate your money as couples in chapter nine of my book so you could just pick that up wherever you want if you're interested in that in general I like to have a joint account where almost everything is paid out of which is basically my automation system but joint and then I like to actually have each person paid themselves a certain amount of just guilt free no questions asked money so you know what if I want to buy a three hundred pair shoes but we've agreed that I get I get five hundred bucks a month, we each get five hundred spend on whatever, no questions that's, my it's, my individual money and that's that but the rest of it is joy because we are a partnership and we're gonna make decisions together, but we're still going to maintain just this little bit of independence so I could do what I want to do without ever feeling any guilt or resentment. Uh, jeannie is wondering, how do I get my mother recently widowed to invest in herself? She's gone into super cheap mode, which is hard to imagine she is in super cheap mode I mean that's a eso variety of ways. I mean, we can just list off the tactics and I would just try each one. One is to go together with her to an event one is to buy her a gift. One is to actually talk to her and see like, hey, you know, what is it that you want to do? Oh, you're interested in playing bridge like, oh, so how do you learn how to do that? Have you do you buy books or do you go to a course or what do you like talking to her and really understanding what's what's beneath in terms of psychology there just a variety of tactics, but uh probably what you don't want to do is like lecture her like a you really should do this which is what most of us tend to do. What else amy bloom says uh my fiance only is the only one that works so how can I tell him what to do with his money? We have a daughter and we live with his parents it's not your not telling him what to do with his money. That's correction number one I want to be really clear your jointly deciding and by the way this happens a lot where you know basically there's all these great studies of as soon as men find a partner a female partner they like they get really healthy so basically they stop doing all these drugs these like start running to start getting healthy because in general like a woman will have an influence on a man's health in terms of like stopping eat all these fatty burgers and all kinds of stuff right? So there are a lot of gender and similar things happened men to women is a lot of gender influences that happened this isn't a gender class but you're not telling him what to do with money you're jointly deciding howto live a rich life really important to reposition that in your mind what do you want to do this city of kids? Yes she has a kid and then he lived with the fiancee's parents great. So what is a rich life isn't living with your parents? Maybe maybe not, is it? You know, being able to send the child to private school. Okay? If so, we need to start saving for that. Is it taking a trip so that my daughter can learn about backpacking around when she's five whatever let's, talk about that let's, decide on start with something fun, and then we can get into the other stuff, like she would do. A five twenty nine should be safer, blah, blah, blah, but let's start with something fun, and it can be small. You don't have to do a five thousand dollar vacation, right? Could be a weekend trip somewhere. It could be whatever we'll get that muscle going, and then we'll turn it into those things. Not only we want, but the things we need. Okay, take a couple more. Sure, mikey huff says, my mother is a bit more traditional and wants me to be working in nine to five. However, as a photographer, I am somewhat successful. How can I make her believe in me and my potential as a creative? What a great question. When I, uh, when I was starting out out of college, I had job offers from a bunch of places, and I accepted a job at google and my parents were really happy because google was in the newspaper a lot there like there's a good company and my parents are actually pretty liberal as it goes for indian parents so when I decided to not take that offer and instead start my own company, the only thing my dad said was like are you sure they're in the newspaper a lot? But I got a lot of other pressure from friends because I would work at home and people would say they would literally say um oh so you work at home when you gonna get a real job and that's very demoralizing to a creative or an entrepreneur because like, dude, this is this is real to me I'm still struggling but this is real and on and then what's interesting is as my business has grown more successful overtime uh this is it's so interesting they now say oh you work from home must be nice interesting I'll give you another test and then I'll answer this question directly I run a lot of tests where I test responses so people will say, what do you do? I used to say I'm a writer and everyone's like, oh yeah my brother in law's a writer too he's trying I'm like your brother's unemployed he's not a writer he's unemployed so now like what you do I'm like, oh I'm an author oh really? What kind of book did you write super different responses way different if you're interested in this whole concept you can google rem eat satay testing responses at bars I'm serious I'm not getting and I actually did test another response is very interesting for creatives watching listen to this you got to use this so I have so people like oh so like do you have an office? And I used to say like, oh I work from home and they would they would do this to be like oh okay oh like you're kind of a loser so I started testing responses because like I'm not a loser and I knew that they're like I'm not a loser and I knew that there was something weird about the way I was saying right? So I tested all these different ones and guess which response one people come to hey uh oh you're an author that's so interesting so do you have an office? We'll actually have a home office? Wow, that must be nice so different in terms of the response is I get we're going to talk about this tomorrow we'll talk about this on friday in terms of test systematically test things this is going to be totally fascinating discussion, but the answer to the question the question was how do I get my parents to support me? Because I'm pretty successful as a photographer this what you do you don't try to push back and say mom, I'm really good like look at me aren't you proud of me out no, you have to actually adopt the the way of saying sometimes you say you know I don't know like maybe maybe I'll do a full time job later on maybe not I'm actually just trying to figure it out right now I'm not sure but so far it seems to be going well what do you think if you were me what would you do to kind of grow this business whoa completely different what have we done with that response I just gave what did I do her involved engaged her what else he said grow this business which I think is a really empowered language yeah not make it on subsistence making enough to pay off you know? Okay grow this business what else did I do in that phrase that I used you? Uh you let her know that her what she says values to you? Yes, I validated her I said, you know what? You might be right? I don't know I might have to I might get a job later on but I know like I could understand you know you don't want your son you know, working struggling for the next ten years you put in so much work you know, but for right now, like, this seems to be going well, I'm trying to figure out how to grow it. I'm trying to figure out how to grow, what am I doing there? I'm basically not coming off like a know it all. We're none of us know it all, I'm trying to say, look, I don't know, I'm trying to figure this out. What would you do to grow my business? I'm asking advice from everyone I do that to this day, all right? So I'll be like, when I was launching my book, I went out to all these people. What do you think I should do? Like, honestly, I knew a lot more about book marketing than they did, okay, but every hundred people I asked, I got one interesting answer, which was a game changer for me, okay? And also you can't argue with someone who's like, look, I'm not really sure what do you think you can't be like? You suck because the person is just being genuine and authentic, they actually want to know how can you help? What we got on the web? People are anybody surprised by the way we tackle that? I think that is something that everyone can use because we all have doubters, and, uh instead of trying to push back it's like trying to push back the ocean, you don't do that, you say, all right, well, you know what? Maybe you're right. I don't know I might have to close us down if it doesn't work, but I was trying to figure it out right now. What do you think going back to the gender thing? Because I think this this whole thing is really a fascinating and powerful segment meow wanna ask? I earn five times what my boyfriend earns, and now I feel bad spending money on luxuries for myself when he, for example, can't afford health care. How do you approach these kinds of money issues with someone that you're just going to get serious with not merging finances with yet this is a really tough question. You got a lot of gender dynamics going on woman earning more than the man it's like a very complicated thicket of questions. The first thing I would say is acknowledge and understand the gender dynamics let's be candid, the guy's going to feel somewhat emasculated that the female partners earning more than him. I think we can. Yeah, maybe unpolitical correct. A saber is also true. Okay and I know I know it's because I get thirty forty e mail's a week about this and I ask people you know, would you care if your partner and more than you are you man or woman etc cetera that's a fact okay, now how do we handle that? One of the things we can do is just bring it up, bring it up gingerly if it were me and I were her I would probably it would probably take me a year to fully explore this keep in mind that they seem to be early in their relationship so you know what he probably knows she makes more than him she may not know how much the five times is a lot but I might just say you know, like, uh, first of all I'm gonna ask myself am I comfortable with this because you know what? Some people they want their partner to make more than them or they want to be equal levels or they're not comfortable making five x with the other one that I'm comfortable having a long term relationship with this okay, let's assume that she is so you know now it's really about it's not about saying hey, how come you don't earn so much? Why aren't you more ambitious that will never go well but actually just day to day decisions I would say, you know so it's really interesting you know you're you're talking about going on vacation what do you plan to do where you plan to go? How do you think about paying for this stuff like I'm still trying to figure it out myself even though you've read my book and you've master automation but you're like I'm just trying to figure out myself well, what do you do and you'll discover funny attitudes about behavior you're funny discover funny be like oh uh I just go there and then I pay it off with my credit card later well oh that's so interesting that does it does it add dead or how do you do that? Oh yeah, I just paid off later whatever it takes me a year that's fine. Oh that's really interesting because I've been reading this book what he says we should do this what do you think you're putting yourself aside blaming it on me which is great uh and then you know, so what are the main points on making there are do not try to make this a rush decision acknowledge that there are gender roles here find a way to bring it up instead of broadly talking about money talk about the day to day decisions and then introduce the book you've read this hey I have a question what do you think about the same account and get the discussion started there

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This course changed my life. After watching Ramit on Creative Live, I bought his book, then signed up for his newsletter, then bought several of his classes. You could say I am officially drinking the Ramit Kool-aid now, but I'll tell you why... His stuff works. You have to trust the system, but I've been able to create a rich life for myself by my definition of rich and I am so happy. It takes work, but I am so grateful I found Ramit in my 20s so I can truly enjoy my 30s over the next decade. Without this course, I would still be complaining that people don't want to hire me because my prices are too high and whining that I am not valued, when in reality, the problem was me. Thanks Ramit for always speaking the hard truths and giving people wake-up calls to get their act together and live the life they want... It's possible!

Adrian Farr

Ramit is a huge inspiration, he is not just a 'been there and made loads of money' kind of guy, he is a 'been there and made loads of money, and here's how I did it' kind of guy! Ramit really gets down to helping you understand not only how to make money but also how to save it too. I am looking forward to reading his book and plan to implement a lot of his systems into my own life.


I have taken a few business classes for creatives online, but this is by far the most comprehensive, most practical course of all. Especially for someone like me who loves Ramit's work but has not made a decision to commit to his full courses, this is a great introduction for what he can offer. He pushes you to think outside the box and see all the possibilities that we can have in a very clear, logical way. If you are unsure which class to take to learn about business, this is all you need.

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