Around six years ago, married couple Christina, 37, and Noah, 35, took $10,000 out of the bank.
The money had been sitting idle in an old personal account of Christina’s, but a documentary on the bank’s practices prompted the couple to get the money out of there, they told self-made millionaire and money expert Ramit Sethi on a recent episode of his “I Will Teach You to be Rich” podcast. Their last names were not used.
After the massive withdrawal, the money continued to sit — in cash — in their closet for another three years. They couldn’t come to an agreement over what to do with it.
The situation is a perfect example of Christina and Noah’s main problem: They have differing beliefs around money that often lead to taking no action at all.
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Christina is anxious about their long-term financial health but also wants to upgrade their lifestyle by buying a home or paying for better child care. Noah, on the other hand, is comfortable with what they have and hesitant to spend any money beyond what they absolutely need to.
“I think you have a dramatic miscalibration with what a lot of money means,” Sethi told them. “And because of that, you are always going to feel bad.”
Their disconnect has left them anxious about their financial health, combative with each other around spending, and indecisive on major money moves such as buying a house.
Here are Christina and Noah’s biggest pain points and how Sethi addresses them.
Christina is anxious about making the ‘right’ money choices
Based on their numbers, Christina and Noah are objectively doing pretty well, which Sethi was quick to point out. The couple said they have a net worth of around $860,000 with no debt and earn a combined $300,000 a year.
Despite these facts, Christina still feels anxious about the couple’s finances for two main reasons: She wants to spend more in certain areas, such as on better child care or the house of her dreams, but she also wants to ensure they’re saving enough for retirement.
Noah questions whether they really need to spend additional money pretty much whenever Christina poses an idea, which adds to her anxiety about whether they’re doing the “right” thing with their money.
“It feels like we’re spending too much,” Christina said. “And maybe other people are cool with that and just overspending their budget and not saving and investing a ton, but it feels like we’re doing something wrong.”
Sethi asked Christina if she would feel better if their annual income was higher. She might, she said, but she wouldn’t necessarily buy those nicer things.
“Money is deeply emotional. It’s deeply political. But sometimes you just need to take an honest look at the numbers,” Sethi told her.
Based on their numbers, Christina shouldn’t be so worried, Sethi said. She and Noah have built up enough of a buffer to get them through a number of hard times, should a layoff or emergency expense come up.
“The single factor that matters here with Christina is that she’s afraid,” Sethi said. “And no amount of money in the bank, no spreadsheet, no income, no net worth number will solve that emotional problem.”
Noah can be a ‘dream squasher’
Noah’s money vigilance has helped the couple amass a healthy amount in savings and investments, but it’s so extreme that Christina feels like she has to persuade him to spend money on things that are meaningful and within their budget, such as family vacations.
“I don’t really value spending money a ton,” Noah said. “I grew up with frugal parents, and they didn’t spend money.”
Sethi asked if Noah enjoyed the family vacations and other things Christina has had to persuade him to spend money on. He admitted that he does.
So the question is, Why doesn’t he trust that they can loosen up a bit, lower the tension and enjoy the life they’ve worked hard for?
“In your mind, you’re not the dream squasher. You’re the responsible one,” Sethi told him.
But in reality, Noah has been a dream crusher, Sethi and the couple both acknowledged. He’s well intentioned, of course, but at the rate they’re currently investing, they’ll have over $11 million by the time they retire.
“Do we even need $11 million? I don’t think the two of you need it,” Sethi said. “You can’t even spend the money you have right now.”
Ultimately, the couple realized there are relationship issues they plan to address in couples therapy. But Sethi also helped them see that they don’t need to compare themselves to anyone else. They can work together to create a shared vision for the future and know they have a solid safety net should their situation change.
“Our spending isn’t the problem,” Noah said in a follow-up video. “Instead, it’s how my frugality and spending habits have negatively impacted our relationship and contributed to Christina’s financial insecurity.”
Check out the full episode here.
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