‘I stress over money — but we’re seeing Taylor Swift in France’: NYC couple struggles to come together on financial responsibility. Ramit Sethi responds

Financial incompatibility

Having different perspectives about money and debt isn’t uncommon. According to a recent survey by financial services firm Bread Financial, 64% of couples said they felt financially incompatible with their spouse or partner.

For Taylor and Steve, the disconnect is palpable. Taylor earns $12,000 a month, roughly four times more than Steve. Also, the couple’s perspectives on work and ambition are misaligned.

"It's like, you know that quote, 'All work and no play'? He's like, all play, no work," Taylor told Sethi.

Steve said part of the reason for his lower income and ambition is a need for more self-confidence. A recent study published in the journal Psychological Science found a link between respondents’ income and self-esteem over time.

However, Steve has a questionable game plan to improve his self-esteem. “Honestly I feel like taking mushrooms could help,” he said.

Discover how a simple decision today could lead to an extra $1.3 million in retirement

Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.

Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.

Read More

Unsustainable money hacks

As he’s struggled to find steady employment, Steve is spending 138% of his monthly income, according to Sethi’s analysis. The gap is financed by “money hacks” like credit card churning — when you repeatedly open credit cards to earn intro bonuses. Points from these cards partially financed the couple’s trip to France to see Taylor Swift live.

Steve’s other money hacks are riskier. He borrowed $60,000 on credit cards to take advantage of the zero-percent introductory rates and placed the cash in certificate of deposit (CD) accounts to earn high interest. “What the f—!?” Sethi said.

Unfortunately, Steve has other leveraged investments outstanding. He day-trades stocks with borrowed capital in a margin account to supplement some of his income.

“Trading on margin picking and individual stocks, especially in a situation where you're making $3,000 a month; It just makes no sense at all,” Sethi said.

According to the Policygenius 2024 Financial Planning Survey, approaches like margin picking are increasingly gaining traction with younger Americans. Sixty percent of Millennial and Gen Z Americans have used at least one of six “money hacks” including day trading, infinite banking, maximizing credit card rewards, as well as more conservative approaches like cash stuffing (a.k.a. envelope budgeting), no-spend challenges and extreme couponing.

However, for the sake of his relationship, Sethi advised Steve to cut back on the hacks and focus on genuine income streams. Sethi said that people have trouble letting go of habits that have become part of their identities, but when trying to be financially responsible they have sacrifice something.

“I think that's totally fair,” Steve admits. “I obviously should be spending much more time increasing my income versus these side projects.”