189. “People definitely called me out”: Nate & Serena return 2 years later
In this episode of I Will Teach You To Be Rich, hosts revisit Nate and Serena, a couple featured previously, to explore their remarkable financial progress over the past two years. Nate and Serena reflect on their transformative money mindset shifts, moving away from fear and limiting beliefs to embrace empowering financial goals.
The couple shares insights into improved communication and teamwork around finances within their relationship. They candidly discuss strategies for managing major life transitions and expenses, like planning a wedding and preparing for upcoming salary changes to tackle debts. Despite challenges, Nate and Serena achieved impressive financial milestones by adopting sound habits—a testament to the podcast's advice on aligning spending with values for lasting success.
This is a preview of the Shortform summary of the Dec 31, 2024 episode of the I Will Teach You To Be Rich
Sign up for Shortform to access the whole episode summary along with additional materials like counterarguments and context.
1-Page Summary
Personal transformation and growth around money mindset
Per Serena, her past money mindset was rooted in trauma and fear from her parents' stressful handling of finances. Through the podcast conversation and self-reflection, Serena recognized this unhealthy mindset, transitioning to becoming more generous and viewing financial goals as empowering.
Nate shifted his perspective on his medical school debt, viewing it as temporary and manageable with his future salary, rather than an overwhelming burden. Meanwhile, Serena became more aware of her growing retirement savings and debt paydown progress, increasing her sense of financial security, as Ramit Sethi advocated.
Improved communication and teamwork in the relationship
Nate and Serena now approach money conversations with mutual understanding and support, rather than as adversarial negotiations, creating a safe space for each other's financial concerns. Their relationship shifted from dividing expenses strictly to "our money," with increased willingness to support each other financially when needed, as Sethi encouraged the "team" mindset.
Managing life transitions and major expenses
Ahead of getting married, they thoughtfully planned the wedding while remaining financially responsible, prioritizing key elements like photography and using Nate's parents' contributions. With Nate's upcoming income increase, they plan to aggressively pay down debt and reevaluate financial priorities, as Sethi advised discussing goals beforehand to align spending with values.
Achieving financial goals
Serena aggressively paid down her student loans from $81,300 to $68,600 over two years while doubling her 401(k). Despite Nate's $460,000 medical school debt, the couple reduced fixed costs from 77% to 60% of income, allowing flexibility to save and invest while preparing for imminent salary changes to tackle remaining debt, exhibiting strong financial habits.
1-Page Summary
Additional Materials
Counterarguments
- While Serena's shift to a more generous and empowering view of financial goals is positive, it's important to balance generosity with practical financial planning to ensure long-term stability.
- Viewing medical school debt as temporary and manageable is optimistic, but it's crucial to acknowledge the potential challenges of the healthcare industry and job market that could affect Nate's ability to manage that debt.
- The transition to a "team" mindset in finances can strengthen a relationship, but it's also important for each individual to maintain some financial independence to ensure personal security and autonomy.
- Planning a wedding responsibly is commendable, but it's also worth considering if even the prioritized expenses could be further optimized to contribute to debt reduction or savings.
- Using an upcoming income increase to aggressively pay down debt is a sound strategy, but it's also important to consider building an emergency fund and diversifying investments to mitigate risks.
- Reducing fixed costs to increase financial flexibility is a good practice, but it's essential to ensure that the quality of life and necessary expenditures are not compromised in the process.
- Aggressively paying down student loans and increasing retirement savings are excellent financial moves, but one must also consider the potential benefits of investing in assets with higher returns, depending on the interest rates of the loans and market conditions.
Actionables
- You can create a visual debt thermometer to track your progress and stay motivated as you pay down loans. Draw a large thermometer on a poster board and divide it into increments that represent portions of your debt. As you make payments, color in the thermometer to visually represent your progress. This can be a fun and encouraging way to see your debt decrease over time.
- Start a monthly "finance date night" with your partner to build a supportive money conversation routine. Set aside one evening a month to sit down together with snacks and music to review your financial situation, discuss goals, and make plans. This regular check-in can help maintain mutual understanding and keep both of you engaged and aligned with your financial objectives.
- Implement a "future salary" savings challenge by setting aside a small percentage of your current income into a separate account as if you're already earning a higher salary. For example, if you anticipate a 10% salary increase, start saving an additional 2-5% of your current income. This practice can help you adjust to a new budget when your salary increases while building your savings in the meantime.
Get access to the context and additional materials
Personal transformation and growth around money mindset
Serena and Nate’s journey on Ramit Sethi’s show reveals profound changes in their understanding of money and relationships, exemplifying how deep-rooted beliefs can be transformed into empowerment and conscious financial planning.
Serena realized her past money beliefs were rooted in trauma and fear, not reality
Serena admitted that her approach to money was historically a source of stress and shame, deeply influenced by her upbringing. Her beliefs were not only shaped by her parents' stressful and shaming handling of finances but also by witnessing their arguments over money. This trauma led her to view money in a transactional way within her relationship with Nate.
Through the podcast conversation and self-reflection, Serena recognized how her money mindset was hindering her relationship and ability to be generous
After the podcast conversation, Serena had an epiphany about how her approach, particularly towards splitting rent, was stressing Nate. She realized she had not been genuinely generous within their relationship, treating financial matters transactionally and not reciprocating the level of care Nate was putting in. She recognized that her mindset was not reflective of her feelings or her desire to be more generous.
After the podcast, Serena made conscious efforts to change her money mindset, becoming more intentional with spending and finding financial goals empowering rather than stressful
Post-podcast, Serena made conscious efforts to change her money mindset. She shifted her perception of generosity and became more intentional with money, allowing her to treat Nate to things like coffee—gestures she'd previously never considered. This transformation also applied to her financial goals, which she now found empowering.
Nate and Serena gained a more multi-dimensional understanding of their finances
Nate shifted his perspective on his medical school debt, viewing it as temporary rather than an overwhelming burden
Nate, initially overwhelmed by his rising medical school debt, started to view his situation more optimistically. Talking about the finances openly on the show marked a turning point—he began seeing ...
Here’s what you’ll find in our full summary
Personal transformation and growth around money mindset
Additional Materials
Counterarguments
- While personal transformation is possible, it's important to acknowledge that changing one's money mindset is often a complex and long-term process that may require ongoing support and may not be as straightforward as the text suggests.
- The idea that Serena's money beliefs were solely rooted in trauma and fear may overlook other potential influences such as personal experiences, education, or broader societal and economic factors.
- The notion that recognizing a problem in one's approach to money will lead to immediate and lasting change can be overly optimistic; ingrained habits and beliefs typically take time to adjust.
- Serena's newfound intentionality with spending and financial goals might not necessarily lead to empowerment; for some individuals, increased focus on finances can lead to anxiety or stress, especially if financial circumstances change.
- Nate's perspective shift on his medical school debt being temporary may not account for the unpredictable nature of the medical profession and the economy, which could affect his ability to pay off the debt as ...
Actionables
- You can reframe your view of debt by writing a "debt autobiography" that narrates your debt journey, highlighting the education, experiences, or assets it has enabled, to shift from a mindset of burden to one of investment in your future.
- Start by jotting down when you first took on debt, what it was for, and how it has contributed to your current position in life. For instance, if you have student loans, consider the career doors that your education has opened for you. This exercise can help you see debt as a stepping stone rather than an anchor.
- Create a visual progress chart for your financial goals to transform the abstract concept of money management into a tangible and motivating visual aid.
- Use a poster board or digital app to track milestones, such as paying off a certain percentage of debt or reaching a savings goal. Each time you hit a milestone, color in or mark off that section. This can serve as a daily reminder of your progress and help maintain a positive and proactive attitude towards your finances.
- Develop a "genero ...
Get access to the context and additional materials
Improved communication and teamwork in the relationship
Through the insights shared by the hosts and the callers of the podcast, it's evident that Nate and Serena have made significant strides in how they communicate about money.
Nate and Serena now approach money conversations from a place of mutual understanding and support
Since the podcast, Nate and Serena have shifted the tone of their financial conversations. Instead of viewing money discussions as adversarial "negotiations," they now see them as opportunities to better understand each other's financial needs and priorities. This shift has allowed them to create a safe space where they can each advocate for their financial concerns without judgment.
Nate and Serena's relationship dynamic shifted from "his money" and "her money" to "our money"
Both Nate and Serena are now more willing to compromise and make financial decisions as a team. They've moved away from strictly dividing expenses and are comfortable discussing financial support when needed. Nate acknowledges Serena's efforts in aggressive debt repayment and the long-term savings it allows, justifying his higher contribution to rent. Serena is more understanding of the emotional impact of financial stress on Nate, and they both appreciate that they can openly ask each other for financial assistance without it causing tension.
They actively work to create a safe space for each other to advocate for their own financial priorities without feeling judged
Their communication about money has improved, with discussions now concluding with affirmations of love and reassurance. This new approach to conversations enables them to accommodate each other's financial stress comfortably. They have developed a habit of paying attention to each other's needs, which has also positively affected ...
Here’s what you’ll find in our full summary
Improved communication and teamwork in the relationship
Additional Materials
Counterarguments
- While Nate and Serena's approach to money is commendable, it may not be suitable for all couples, as individual financial independence can also be healthy and empowering.
- The shift from "his money" and "her money" to "our money" might not address underlying issues of financial inequality or dependence that could arise in the future.
- Creating a safe space for financial discussions is important, but it's also crucial to have boundaries and personal financial privacy.
- Affirmations of love and reassurance are positive, but they should not be used to gloss over serious financial disagreements or concerns.
- Being comfortable asking for financial support is a sign of trust, but it's also important to maintain a balance and ensure that one partner does not become overly dependent on the other.
- Adjusting financial contributions based on current needs is flexible, but it could lead to uncertainty or instability if not managed carefully.
- Empowerment through joint financial discussions is beneficial, but each partner should also be ...
Actionables
- Create a "dreams and goals" vision board with your partner to visually align your financial aspirations. By selecting images and phrases that represent your shared and individual financial goals, you can foster a deeper understanding of each other's priorities. For example, if one of you dreams of traveling, while the other is focused on buying a home, your vision board can include pictures of destinations and houses, which can serve as a starting point for discussions on how to allocate funds for both.
- Develop a "money date" ritual where you regularly meet with your partner to discuss finances in a relaxed setting. Make it a pleasant experience by setting it up as a casual coffee date at home or a picnic in the park, where you can review your budget, discuss upcoming expenses, and celebrate financial milestones together. This ritual can help normalize financial conversations and build a supportive atmosphere for discussing money matters.
- Implement a "no-surprises" po ...
Get access to the context and additional materials
Managing life transitions and major expenses (wedding, income increase)
Nate and Serena exhibit careful planning and financial responsibility as they navigate life transitions, such as a wedding and an upcoming increase in income.
Nate and Serena thoughtfully planned their wedding, prioritizing key elements while remaining financially responsible
The couple intentionally chose a wedding venue that included certain services to simplify the planning process. They've been making decisions and checking items off their list while ensuring deposits are made, viewing the wedding as one of their significant life purchases and trying to approach it without undue stress.
Serena talks about using savings for wedding expenses and is not overly worried about it, especially since they will be saving on rent in the upcoming months and moving to a lower-cost city. They have a spreadsheet tracking wedding costs, and although they initially hoped to keep it under $40,000, they acknowledge it might reach $45,000, starting from a $35,000 budget. However, they are not overly concerned about affording these expenses due to upcoming changes in their financial situation.
Serena and Nate have prioritized elements like the venue, photography, and sound system for their outdoor wedding while recognizing the trade-offs and considering costs judiciously. Serena understands the value of professional services from her freelance experience. Additionally, Nate's parents are contributing a substantial amount, with his own parents contributing to a lesser extent. His parents want to treat the couple, even though they experience anxiety about spending money on a significant, one-time event, especially since they're frugal and anxious about making large purchases after retiring.
Nate's upcoming income increase will allow them to aggressively pay down debt and reevaluate their financial priorities
Nate mentions that once he becomes a doctor in a lucrative subspecialty, he will aggressively pay down his debt by as much as a hundred thousand or more per year within 18 months. They plan to allocate funds for a down payment using their combined finances.
Ramit Sethi enc ...
Here’s what you’ll find in our full summary
Managing life transitions and major expenses (wedding, income increase)
Additional Materials
Clarifications
- Ramit Sethi is a well-known personal finance advisor and author who provides advice on managing money, investing, and achieving financial goals. He is known for his practical and actionable financial strategies aimed at helping individuals take control of their finances and build wealth over time. Sethi often emphasizes the importance of setting financial priorities, such as paying off debt and saving for the future, while also enjoying life in the present. His approach encourages individuals to be proactive in managing their money and making informed decisions to secure their financial well-being.
- Nate is anticipating a significant increase in income once he becomes a doctor in a lucrative subspecialty. This increase will allow them to aggressively pay down debt, potentially up to $100,000 or more per year within 18 months. The couple plans to allocate funds for a down payment using their combined finances. This income boost will also lower their fixed costs, providing them with more flexibility for savings or additional expenses.
- When Nate and Serena mention allocatin ...
Counterarguments
- While Nate and Serena are planning their wedding with financial responsibility in mind, the budget increase from $35,000 to potentially $45,000 could be seen as a lack of discipline in sticking to their original financial plan.
- Choosing a venue that includes certain services might simplify the planning process, but it could also limit customization options for the wedding and potentially lead to higher costs than if services were sourced individually.
- Using savings for wedding expenses is practical, but it could also deplete funds that might be needed for unforeseen expenses or emergencies in the future.
- The couple's reliance on contributions from Nate's parents could create an implicit expectation of financial support, which might not be sustainable or could affect their independence.
- Aggressively paying down debt is commendable, but it might not be the most optimal use of funds if there are other investment opportunities with higher returns.
- Allocating funds for a down payment is a significant financial step, but it should be balanced with the need to maintain an emergency fund and diversify investments.
- Discuss ...
Get access to the context and additional materials
Achieving financial goals (debt payoff, savings, investments)
Serena and Nate have made remarkable strides in securing their financial future despite significant student loan debt, by managing their money and staying focused on their financial goals.
Serena has made significant progress in paying off her student loan debt
Serena has aggressively paid down her student loan debt, reducing the balance from $81,300 to $68,600 over the past two years. Her diligent debt repayment has not just shrunk her debt, but has also positively impacted her savings—her 401(k) has more than doubled, swelling from a balance of $19,900 to $43,000. Serena acknowledges that the conversations about money have been transformative for their long-term planning and day-to-day life, and she realized the extent of her progress upon reviewing how much she had accomplished.
Nate and Serena have established a solid financial foundation despite Nate's high student loan debt
Nate has $460,000 of student loan debt, accumulated from undergraduate studies and primarily from medical school in New York City. With an anticipated substantial salary increase in the near future, he plans to aggressively pay off this debt. Currently, Nate's loans are in deferment and accruing interest, but he is preparing for the restart of payment plans.
Together, Serena and Nate have strategically managed their fixed costs, significantly r ...
Here’s what you’ll find in our full summary
Achieving financial goals (debt payoff, savings, investments)
Additional Materials
Counterarguments
- While Serena has made progress on her debt, the reduction from $81,300 to $68,600 over two years may not be aggressive enough given high interest rates that can accrue on student loans.
- Doubling the 401(k) balance is positive, but it's important to consider whether the contributions to the 401(k) could have been better utilized towards paying down high-interest debt first.
- The impact of debt repayment on savings is positive, but the opportunity cost of investing the money instead of paying down low-interest debt should be evaluated.
- Conversations about money are indeed transformative, but the text does not address whether Serena and Nate have sought professional financial advice, which could potentially optimize their financial strategy.
- Nate's plan to aggressively pay off his student loan debt is contingent on an anticipated salary increase, which is not guaranteed and could be affected by various factors such as job market conditions or personal circumstances.
- Reducing fixed costs from 77% to 60% of income is commendable, but without knowing the absolute figures, it's hard to assess the overall impact on their financial health.
- Greater flexibility to save and invest is beneficial, but the text does not mention if Serena and Nate have an emergency fund in place, which is a critical component of financial stability.
- While Nate's loans are in deferment, the accruing interest can significantly increase the total amount owed, and the strategy to wait for a salary increase before starting repayment ...
Actionables
- You can create a visual debt tracker to chart your progress and stay motivated as you pay down your own loans. Draw a thermometer on a poster board, and fill it in as you pay off chunks of your debt, giving yourself a visual representation of your journey towards being debt-free.
- Develop a "money date" habit with your partner to regularly discuss finances and long-term goals. Set aside a time each week or month to sit down together, review your budget, discuss any financial concerns, and make adjustments to your spending and saving plans to ensure you're both aligned and working towards common objectives.
- Experiment with a "spending freeze" challenge f ...
Get access to the context and additional materials
Create Summaries for anything on the web
Download the Shortform Chrome extension for your browser
