185. “My fiancé has no savings at 43. Should we get married?”

Dawn and Richard, living paycheck to paycheck, struggle with their differing financial upbringings and mindsets, which greatly affect their relationship and attempts at financial unity.

Dawn and Richard have complex financial histories and lessons from their upbringings that shape their current money management approaches

Dawn grew up with constant arguments about money in her household, which led to an unhealthy relationship with spending and a tendency to overcompensate for her children

Dawn, now 48, was raised in a household where money was the source of constant arguments. This upbringing led her to develop an unhealthy relationship with spending, often overcompensating for her children and grandchildren. Her mother worked two jobs and never said no to her despite their financial constraints. Consequently, she grew up getting everything she wanted, which now reflects in Dawn's inability to set boundaries for her 12-year-old son, whom she admits to spoiling.

Richard experienced financial devastation in a previous relationship, causing him to be fearful and passive about money management

Richard, 43, carries the scars of a financially devastating breakup that led to wage garnishment and significant losses, including his home. Consequently, he's developed a fear of managing money and tends to take a more passive role regarding finances, unsure of how to contribute meaningfully to household expenses and his retirement.

The couple struggles to align their finances and achieve financial stability as a unit

They have difficulty combining their finances and agreeing on how to contribute to shared expenses and savings

Living in upstate New York, the couple finds it challenging to combine their finances effectively. Although engaged and desiring a shared future, they are grappling with how to manage their money together. Dawn, who has filed for bankruptcy eight years ago, makes three times what Richard does and handles the household bills. Meanwhile, Richard provides sporadic financial contributions that are uncertain and variable, contributing to home improvements at times instead of consistent payments.

Their differing money mindsets and past traumas create tension and resentment around financial decisions. Dawn feels overwhelmed when Richard's contributions fall short, affecting their ability to save for joint goals like vacations or purchasing a home. Richard's inconsistent approach to contributions, sometimes feeling like he’s paying rent, does not foster a sense of financial partnership, leading them to postpone their wedding due to these financial uncertainties.

Their differing money mindsets and past traumas create tension and resentment around financial decisions

The couple's financial relationship is marred by tension, with their communication about money often leading to stress and arguments. Dawn's history of overspending, motivated by overcompensation and a recreation of her mother's behavior, contrasts sharply with Richard's caution and avoidance stemming from past financial trauma. This dynamic has nearly led to their breakup, as they grapple with how to share financial responsibilities ...

Dawn and Richard encounter significant difficulties in managing their finances as a couple, which places strain on their relationship and even jeopardizes their future plans.

Dawn feels overwhelmed by being the sole provider for household expenses, while Richard is uncomfortable fully contributing

Dawn is struggling to pay household expenses as Richard's contributions are inconsistent, leading her to feel that his sporadic payments are more like rent than a partnership in their finances. Despite asking Richard for a fixed amount of $200 per week, he contributes different amounts at various times. This inconsistency not only adds stress for Dawn, but also prevents them from accumulating savings or setting up an emergency fund. Dawn acknowledges Richard's assistance with non-financial household tasks, but the financial burdens and responsibility primarily fall on her, exacerbated by Richard's past financial betrayals.

Richard's hesitation to fully engage in joint financial management stems from previous experiences where he suffered significant losses due to an ex-fiancée's mismanagement of their joint finances. This past experience led to the loss of his home, money, the closure of his business, and mistrust in fully combining finances.

Their financial goals and visions for the future are misaligned

The couple's financial goals and visions for the future do not align, putting a strain on their relationship. They have postponed their wedding due to financial concerns, which demonstrates a lack of a unified strategy toward their financial future. While Da ...

Dawn faces a crucial moment in her financial life as she acknowledges her tendency to overspend and prioritize her children's needs over her own financial security. Recognizing her behavior's impact on her savings, Dawn confronts the challenging task of setting boundaries and aggressively investing for her retirement years.

Dawn acknowledges her tendency to overspend and prioritize her children's needs over her own financial security

Dawn's spending habits, including family vacations and a basement renovation for gatherings, have significantly drained her savings. Despite the emotional difficulty, she admits to being a "pushover" when it comes to her children's spendings and struggles with the idea of disappointing them. Her tendency to fulfill her 12-year-old son’s wants has directly mirrored past behaviors, where she also got what she wanted from her parents. The realization that her pension with New York state won’t cover expenses for both her and Richard spurs her to take action.

Ramit pushes Dawn to make tough decisions to take back control of her finances

Ramit Sethi encourages Dawn to take drastic steps to alleviate her financial burden, including putting an end to behaviors that enable her adult children’s dependencies. Dawn's fear that curbing financial support may damage her relationships adds complexity to her need to make changes. However, Sethi emphasizes the importance of demonstrating to her family what it looks like to have healthy boundaries and prioritize essential things for a healthy, rich life. Moreover, Dawn is prompted to make plans and implement them, which includes declining her children's spending requests and possibly selling assets like her camper.

Ramit demonstrates the importance of Dawn investing aggressively for her own retirement

Ramit Sethi confronts the serious fact that Dawn’s current savings and pension will not be enough for a comfortable retirement. Predicting a retirement income significantly lower than she requires, the necessity to save more funds is clear. Sethi persuades Dawn to increase her annual retirement contributions and to consider investing money that could potentially be put toward buying a house. He calculates that Dawn could amass a retirement balance of around $569,000 or even approach a million-dollar retirement balance if she adopts a more aggressive savings strategy, which would substantially improve her annual retirement income.

Reflecting on current financial state and need for change

Dawn's guilt about possibly letting down her children complicates her ability to establish financial limits. Her son’s expensive requests, some of which she has given into to avoid conflict, have contributed to a decrease in her savings from $100k to $58k. Dawn confronts the challenges of reframing her financial behavior, including an instance where she resisted her son’s monetary demands, signaling a turning point in her approach to money management.

Redefining the financial relationship with her children

Dawn pays for her children's phone bills and finds the process of collecting reimbursement from them stressful. Sethi suggests that not paying for their kids' phones would benefit Dawn's finances and advises her to communicate upcoming financial changes to her children, including that they will need to take over their own phone plans.

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