They’re debt-free, have $253,000 invested for retirement, and have $100,000 in cash saved up, but they still feel constantly stressed and often argue about money.
“Money is the scariest thing to me,” Fernando said on the podcast.
Seti told them Conscious Spending Planning Sethi’s budget template, which guests fill out each month to show how they’re spending their money, is one of the best we’ve seen on the show. By Sethi’s standards, they’re not overspending on housing, they’re saving enough for short- and long-term goals, and they’re not burdened with debt payments, Sethi says.
So what’s the problem?
“We know it’s not about the numbers. It’s a different issue,” Sethi said.
Anushka and Fernando’s complicated relationship with money influences how they spend their salaries and how they view their overall financial situation.
Unlike many of the couples on Sethi’s show, Anushka and Fernando don’t have debt problems — they have no debt at all — and their fixed expenses like rent, transportation, and groceries are within Sethi’s recommended range of 50% to 60% of their monthly income.
But the couple still can’t agree on how to spend their money. Anushka, who is the couple’s primary financial planner, wants to invest aggressively for the future. Fernando doesn’t.
“We spend so much money on savings and from my experience, that money can just evaporate,” Fernando said.
The couple saves about 15% of their monthly income for emergencies, vacations and a home, and another 22% is invested in retirement and brokerage accounts.
Fernando says there are a few reasons he’s oversaving. First, he’s skeptical of investing, believing it to be as risky as gambling. Second, he’s pessimistic about the future in general and doesn’t believe he’ll need a well-funded retirement, or live as long as he’d like. He also feels restricted when Anushka demands that he cut back on things like eating out to meet her ambitious savings and investment goals.
Unlike her husband, Anushka worries about having enough money in the future to be able to quit her job whenever she needs or wants to.
“If you can’t have a shared vision for money together — investing, saving, spending, family and the big things — you’re going to continue in the same patterns you’re in now,” Sethi told them.
Anushka and Fernando lack trust when it comes to money, but not when it comes to each other. Fernando doesn’t trust the stock market or even his own savings because he knows that money can disappear quickly during an economic downturn or personal crisis. Anushka has no faith that the couple will ever have enough money to feel secure.
To Sethi, both of these attitudes are just stories we tell ourselves that aren’t based in actual evidence. “As humans, we love stories, and stories are almost daily and infallible,” he said.
Although the stock market could crash or an emergency could wipe out their savings, Anushka and Fernando have done everything they can to prepare.
These stories cost the couple, Sethi says: Fernando’s reluctance to invest cost them valuable profits, and Anushka’s financial worries cost the couple valuable experiences and comforts that could have been realistically obtained.
By analyzing the numbers and discussing past experiences and feelings, the couple was able to realize they had enough money to meet all of their priorities and could adjust when priorities changed.
Using a compound interest calculator, Sethi found that if the couple continued to invest $43,500, With a $250,000 principal and a 7% return each year, you’ll have more than $9.1 million invested by the time you’re about 65.
And he showed them how they could cut their annual investment in half and still have $5.88 million in 35 years, plus thousands of extra dollars to spend each month, which might mean sending more money to help Fernando’s family or enjoying a vacation here and there.
Financially speaking, Anushka and Fernando are setting themselves up for a successful future, but Sethi said they have more room than they might think to start enjoying the wealth they’ve made now.
“I thought I was doing the bare minimum when it came to saving and investing. [Sethi] It showed me that that is not true,” Anushka said.
Watch the full episode here.
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