'We're 2 months from going bankrupt, but I pretend things are fine': This California couple owns 5 motorcycles, spends half their income on rent — here's the real hard truth they had to face

Even as the pair is on the brink of financial ruin, Courtney admits she consistently downplays the situation. “We’re two months from going bankrupt, but I pretend things are fine,” she confessed on a recent episode of Sethi’s “I Will Teach You To Be Rich” podcast.

Sethi’s deep dive into their financial lives paints a grim picture, but he sees hope for them on the horizon.

Expensive events popped up

A lot has changed for the couple in a short period of time, they say.

“Four years or so ago we were doing really well,” Alex claimed. “We were in a place where the rent was cheap, we didn’t have a child, we were both working and making decent money. And saving money!”

In fact, their financial situation was so good that Alex claims they’d managed to pay everything off and were living debt free.

“I had more money in the bank than I ever had,” he said.

So how’d they get so far off track? Well, first the couple got married. Alex says they spent $15,000 on the whole event, including the rings and bachelor/bachelorette parties.

Then they had a baby. With the family expanding, they decided to swap their apartment for a large house. This left them paying rent that “was about $800 or $900 more than we were paying at our original place,” Alex said — adding on that they’re now also making less money than they did before.

On the verge of bankruptcy

Getting married and starting a family are common money drains for young couples like Courtney and Alex. But not everyone ends up on the precipice of financial ruin for it.

As the conversation continued, Sethi started to identify the factors that were making life so hard for the couple.

The couple has roughly $45,000 in assets, mostly in vehicles (Alex has five motorcycles), and $130,000 in total debt. And considering over $100,000 of that debt is in student loans, Courtney treats it differently from their other debts — something Sethi warns is common but problematic since you’re still on the hook for that money plus interest.

On the income side, Alex and Courtney make $4,000 and $5,000 a month, respectively. However, their rent in Orange County, Calif., which is $4,100 a month, swallows up one of those incomes completely.

“It’s high, but also worth it,” Courtney said.

Sethi and Alex disagree with her.

“I think it’s high,” Alex said. “It’s much higher than anything I’ve ever paid.”

They don’t have much to fall back on — with just $15,000 in cash savings, which could only cover their living expenses for two months at most.

“That is as red-flag as it gets for me,” Sethi said. “If I was down to two months of expenses, I would be making drastic moves.”

What’s missing and moving on

Sethi finally got to the heart of their issues and offered his theory as to why they have money troubles.

“The way that you approach money has got to radically change,” he said. “Here's what I see is missing from the way that the two of you talk about money: there's no shared vision.”

He told the couple they should be true to themselves and face their individual fears about money matters. Better communication and adjusting expectations could lead them to have a unified vision about their financial life.