Kevin, 32, and Michelle, 30, are facing a financial crisis despite their high joint income of $216,000. They are unable to save for the future due to high fixed costs, including $9,500 in monthly debt payments and a total debt of $628,500. The couple’s spending habits, such as impulse purchases and luxury vacations, have contributed to their financial struggles. Self-made millionaire Ramit Sethi advised them on his podcast to make changes to improve their financial situation.
Sethi pointed out that Kevin and Michelle’s debt payments are the main reason for their financial difficulties. The couple owe $73,000 in credit card debt and $99,000 in auto loans for luxury cars, in addition to spending around $80,000 on home renovations and taking multiple vacations. Sethi emphasized that their high fixed costs are like a burning house that needs immediate attention. With a baby on the way and only $500 in savings, the couple has little room for error or emergencies.
Sethi offered advice to help Kevin and Michelle get back on track financially. They need to work together as a team, with Kevin taking a more active role in managing the finances. Setting boundaries is crucial for putting their financial security first and avoiding unnecessary expenses. The couple took immediate action by canceling an expensive dinner reservation in New York City, demonstrating their commitment to making changes for the better.
Michelle and Kevin need to focus on the long-term outlook and realize that temporary situations should not derail their efforts to improve their financial situation. Sethi warned that costly events will continue to arise, such as Kevin going back to school or the arrival of their second child, so it’s essential to change their financial dynamic for long-term stability. By making small changes and setting boundaries, the couple can begin to address their financial challenges and work towards a more secure future.
Despite their high income, Kevin and Michelle are struggling to save for the future due to high fixed costs and significant debt. Sethi advised them to work together, set boundaries, and think long-term to improve their financial situation. By canceling unnecessary expenses and making small changes, the couple can begin to address their financial challenges and work towards a more stable future. It will take time and effort, but with a commitment to change, Kevin and Michelle can achieve financial security and stability.
