For one married couple — a professor and a nurse — earning a good salary simply isn’t enough. They’re drowning in debt, leaving them with almost no financial flexibility.
“I feel like we’re just kind of floundering and not going anywhere,” Stephanie told Ramit Sethi on an episode of his podcast Money For Couples posted Feb. 10 (1).
Stephanie and Chris, both in their early 40s, have three young children — two with special needs. Their gross income, combined, is about $155,000 a year. But they’re carrying $544,000 in debt — including a $460,000 mortgage — and while they have some investments, mainly from previous employer-sponsored retirement plans, they have no other savings.
Perhaps most surprising: 92% of their net income goes toward fixed costs.
In an emergency, “I think we’d be in big trouble,” Stephanie told Sethi.
But budgeting tweaks may not be enough to solve their financial woes. Sethi says they have to deal with what’s really blocking their financial future.
When fixed costs consume nearly all of a household’s take-home pay, it’s typically one emergency away from a crisis. On top of their mortgage, Stephanie and Chris are also about $15,000 in credit card debt with a $13,000 line of credit balance while owing their parents $50,000.
Fixed costs at 92% “tells me a lot, tells me they’re broke, tells me they’re spending more than they make,” Sethi said.
Sethi’s own conscious spending plan organizes household income into four buckets: fixed costs (including essentials and subscriptions or memberships) at 50-60% of take-home pay, investments at 10%, savings at 5-10% and guilt-free spending at 20-35% (2).
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There are a number of other budgeting frameworks out there, like the 50/30/20 rule in which you spend up to 50% of your after-tax income on needs, 30% on wants and 20% on savings and debt repayment.
But you can’t begin organizing your finances if you don’t understand your baseline. For example, Stephanie and Chris recently bought a bigger house at a time when Stephanie reduced her hours at work.
“After the third child, we needed a bigger place and we sort of semi-ran the numbers and said it’s doable,” Chris told Sethi. But at the time Stephanie was working full-time. When she made the decision to work less they didn’t adjust their expenses.
Central to the couple’s troubles, Sethi says, is their near-term thinking. They’re stuck in the weeds and unable to make good, long-term decisions. This is apparent in their communication.
Indeed, almost half (44%) of Americans aren’t comfortable talking about finances with their partner because they’re worried it will lead to disagreement, according to a 2025 survey commissioned by Wise (3). And it often does, with couples reporting an average of 58 money-related arguments per year. Arguments range from what constitutes “necessary” spending (43%) to decisions on how much they should be saving (34%).
But, past research has shown that “when couples work together and talk about money, they spend more responsibly and are generally happier,” Nirajana Mishra, a consumer psychologist, told the Yale Center for Customer Insights (4).
Sethi says the couple needs to create a “radically different relationship with money” and go from being on the defense to being on the offense.
“You two are partners,” Sethi told Stephanie and Chris, “and the fact is you need to invest. You need to pay down debt. You need to save.”
Chris is due for his annual raise, and Stephanie could also take on more hours at work to bring in some extra cash, but they need to be more diligent about their expenses, according to Sethi. For example, their monthly fixed costs include $2,000 for groceries, which Stephanie admitted to spending without meal planning, resulting in “a lot of food waste.”
When tackling debt, the couple has some tried-and-true options. The avalanche method focuses on paying off debt with the highest interest rate first. The snowball method focuses on paying off the smallest balance first (which can be more motivating) and working your way up to the largest balance. They may also want to consider debt consolidation.
Opening room in their spending by reducing their fixed costs and paying down debt can allow them to resume investing — which had gone down to zero at the time of the episode — and saving for retirement.
Stephanie and Chris need a vision of where they’re going so they can also work toward their long-term goals. And that starts with communication.
“While it’s about the numbers, it’s not about the numbers,” Stephanie told Sethi. “It’s about how we communicate with each other, being honest with each other, not dancing around the issue,” instead of using each other “as the excuse for inaction.”
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I Will Teach You To Be Rich (1); IWillTeachYouToBeRich.com (2); Wise (3); Yale Center for Customer Insights (4)
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