How to Financially Thrive in Marriage (Even if You or Your Partner is In Debt!)

Mindy:
Welcome to the BiggerPockets Money Podcast, show number 159 where we interview Tai and Talaat McNeely and talk about how to get your spouse on the same financial page.

Tai:
Not to live on two incomes. We tell everybody that whatever you do, do not over leverage yourself based off of the two incomes that’s coming in the household because life will change. It may not change right now or right away, but it will eventually change. So live off one, use the other to save, invest, build wealth, start a business, do some fun things, take some risks.

Mindy:
Hello, hello, hello. My name is Mindy Jensen and with me as always is my down-to-earth co-host, Scott Trench.

Scott:
Thanks for grounding me today, Mindy. Great to be here.

Mindy:
Scott and I are here to make financial independence less scary just for somebody else. We’re here to introduce you to every money story because we truly believe financial freedom is attainable for everyone no matter where or when you’re starting.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or confess your messy debts to your spouse for the first time. We’ll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.

Mindy:
Scott, today we have the Talaat and Tai McNeely from His and Her Money. Talaat and Tai are financial educators that are on a mission to get couples on the same page financially so that they can experience the joys of financial freedom. This episode was so much fun to record, Scott and it is just going to be killer. If you are at a different place in your finances than your spouse, maybe a different mindset, this is an episode that you are going to want to listen to with your spouse because Tai and Talaat have some killer advice for how to connect with your spouse financially and get on the same page.

Scott:
Yeah. Loved interviewing them. They are amazing. I just learned so much from them today and I can’t wait to bring them in. So should we bring them in, Mindy?

Mindy:
Talaat and Ty McNeely from His and Her Money. Welcome to the BiggerPockets Money Podcast. I am so excited to have you guys today.

Tai:
Well, hello.

Talaat:
Hey, Mindy. Hey, Scott.

Tai:
Hey.

Talaat:
We are just as excited to be here.

Tai:
Absolutely.

Talaat:
Love the work that you guys are doing here with BiggerPockets Money and we are happy to be able to contribute.

Mindy:
Well, that’s awesome. Let’s start off first with a bit of your background. Where does your journey with money begin and then I want to jump into kind of your area of expertise is getting your spouse on the same financial page so that you can live your most beautiful financial life together.

Talaat:
I think our story started with a 13-year-old, Tai. Ain’t that right?

Tai:
Well, sort of. Our story, we pretty much grew up in similar homes, middle class, income families and both our parents were… I don’t like to use word frugal, but I just feel like they were very money conscious.

Talaat:
Cheap.

Tai:
Yeah. He says cheap and I think that’s why he went like down the wrong direction. I went the opposite direction. So at the age of 13, I remember having the thought that I knew I wanted to go to college. That was non-negotiable, but I wanted to do it completely debt-free. I was thinking about this at 13. I knew that the weight burden of having to figure out college, you couldn’t get around that whether you get a student loan or you have to either cashflow it yourself as well too. But I knew that one day I wanted to get married, I want to have a family and I did not want the burden of my financial habits to actually be a burden on my future spouse. So I met this guy here in high school.

Talaat:
It’s a good thing that she was thinking that way at 13 because it gave me so much room to mess up. So what happened was like Tai said, I had a similar upbringing, but to me you know all the couponing and the and the discount shopping was a turn off. So when I graduated high school at 17, I immediately went into the military. A thousand miles away from home and have my own income. So now that I have my money and my parents never got me anything name brand growing up, I decided that everything that I was going to buy was going to be name brand.
So I kept spending money until I didn’t have any money anymore and then I kept spending more money on credit cards and loans and all that and I wound up in a mountain of debt. Nothing good to show for, nothing like you guys talk about like real estate or an education. It was just stuff. It was just a bunch of stuff that had payments attached to it cars, furniture, the sound system in the car, everything on the credit card closed.
So I was in a mess and I got frustrated and I kept trying to dig my way out and kept messing up. Eventually, I started reading books and starting to get a little bit smarter and that’s at the point where we got engaged. But now the problem was I was engaged to a financial rock star, in my opinion. She had put herself through college, completely debt-free by working jobs here and there and everywhere. She got a degree in finance. She was working in the financial industry, had a perfect credit score and here I was with a terrible credit score, a mountain of debt and bad spending habits. So what do we do, Scott?

Scott:
How old were you when you were in this situation and what year is this? Around what year is this?

Talaat:
So I started military at 17. We got engaged. I was 24.

Scott:
Okay. So 24, you’re describing your kind of peak-

Tai:
Financial mess.

Scott:
Financial mess at 24 when you guys meet. Is that right?

Talaat:
Yeah. I really stunk up the joint. We met in high school, but now we’re at the point of engagement at 24 years old. I would pretend it like I had my stuff together because I had my stuff together in other areas of life, but I couldn’t get this together. So I pretended that I did and what happened was I lied. I lied to her. I didn’t tell her how messed up my financial path was because I tried to create a plan of my own where I could clean up the mess before we got married, but that didn’t work out. God didn’t let that happen. And due to the fact that my wife, soon to be wife was super knowledgeable about money, she started asking questions on top of questions and my lies caught up with me and I had to confess.
We almost did not get married because of my lies. Not so much because of the money, the debt, but the trust that I had broken over this financial situation almost caused us to not get married.

Scott:
Could you describe the reality of your situation? What were the numbers behind the mess you just described?

Talaat:
Yeah. Something over $30,000 of debt and like I said, just stuff. No real estate. Nothing to do with college. I was in the military. It was just all consumerism out of control. I had loans to pay off other loans. I had payday loans. I had fresh start loans. I had car loans. I had furniture loans. I had credit card debt. All just dumbness.

Tai:
Remember, you called yourself dumb.

Mindy:
So what I’m hearing is, first of all you married up. Second of all-

Talaat:
Big time.

Mindy:
Second of all, what I’m hearing is the two responses to growing up in a life of frugalness or even cheapness is, “I’m going to continue the path or I’m going to break free and have everything that was denied for me.” It’s funny that the two of you met and fell in love, and got married from these different positions. Also, what I’m hearing is that she will always find out so never lie to your spouse. And I’m not talking to you, Talaat, I’m talking to everybody who is listening, she will always find out because that’s how it goes. Oh, look, they’re nodding along with me because they know I’m right.

Talaat:
Facts.

Tai:
True.

Mindy:
Truth. So what happened? I’m really curious at what happened when she finally was like, “You are lying to me. I want to know all of your financial situation.” How did that conversation look? Because that’s a really, really difficult conversation to have from either side? She’s so perfect in every single possible way and then you are slightly less so-

Talaat:
Jacked up.

Mindy:
… jacked up. So she is thinking you’re great and then wait, what? And you are like, “Oh, she’ll never find out. Oh, crap. She found out.” I can see love conquers all, but sometimes love doesn’t conquer all it did in this case and that’s great. But what does that conversation look like? How do you start that conversation, Tai? And how do you finally come clean?

Tai:
Yeah. Well, I’d like to note that this was after premarital counseling. So we had all the right conversations with our pastor during our counseling sessions. I knew to pull credit reports and we discussed it. I highlighted things. I penciled things in, but things just wasn’t adding up. Because I believe… Probably because of my financial background I knew that what he was saying was a lie. So he had to come clean and he probably eventually had to come clean anyway because when we got married, what was now his became mine and there was no way to really hide that after marriage.
So it hit the fan. It really hit the fan. “It wasn’t because of debt,” I tell people. People always ask, “Hey, Talaat. Should I marry somebody that’s in debt that has debt?” “Sure.” The issue is how do they handle it? Do you see them wanting to do different? Do you see them changing their mindset? And I really took a step back and I saw those things in him. I didn’t know that’s what he was doing. I saw him with the second job. I just thought he was just saving more money maybe for our future.
I saw him saying no and denying himself from certain things. So once I was ready to take a step back and I saw, “Okay, he already had the mindset changed. He already knew that he wanted to do different.” It wasn’t necessarily because I was this rock star per se, he made the decision that this is not how he wanted to live for the rest of his life. So I was able to work with somebody like that, but it also had me reflect upon myself. What was it about me that would not allow my soon-to-be husband to be honest and transparent with me?
So I started to do a lot of soul-searching in myself within myself like character development and things like that. Did I make it appear that I had it all together? I sure didn’t think I did. Or was it just that my life made him uncomfortable because he saw the way that I was moving and the way that I lived my life? So yeah, we had a lot of conversations, a lot of communication. At that point, it wasn’t about the wedding day for me, it was about my future.
Can I trust this person to actually trust him with my life, my future? Was he hiding something else from me? So we were having to deal with all of those conversations. So a lot of prayer, a lot of talking, a lot of communication, but also coming up with a [inaudible 00:10:35]. We knew we were not going to handle debt the same way that he handled debt within his singleness when we got married.
So we had to discuss what would that look like within marriage, who would handle the budget? What we would do with our income, when we share accounts? Things like this, we start to have more in-depth conversations that I believe was deeper than our premarital counseling.

Talaat:
Spoiler alert, we did get married.

Tai:
We did get married. 14 years in.

Scott:
Tai, what was your position entering the marriage?

Tai:
Mine?

Scott:
Yes.

Tai:
I was completely debt-free, completely debt-free. I put myself through college, completely debt-free. I had to do it in five years so I could have it typical.

Scott:
Did you have assets as well on top of that though?

Tai:
Well, I had a paid off vehicle. I purchased my own $13,000 car at the age of 19, paid that off in 11 months. So I had a vehicle at the time and a paid for paid-off degree. At the time, I had just started my career within the financial industry. So I was building as well, but I had a little bit of a headstart because I didn’t have to carry student loan debt with me.

Scott:
Got it. Okay. So it sounds like you had a really healthy needed discussion here and what was it that enabled you to move past that and then how did you begin handling your money going forward as a couple?

Talaat:
I think it was just… We did a whole lot of praying and a whole lot of just me [crosstalk 00:11:55] confessing everything and me putting everything out there not laying anything and stay in my back pocket and then it was, like Tai said a reflection of this was a part of me, but this wasn’t the totality of who I was. There were some good things about me too. This was a mess up that I shouldn’t have done, but this can be over overcome.
So through a whole lot of dialogue, we decided to move forward. What was magnificent in my eyes was Tai’s approach to… She could have said, “This is your mess. You go clean it up. You let me know when you’re done, and then we could proceed.” But she took the stance that this is now our situation and we are going to figure this out together. So we took all the information that I now shared all the details and nitty-gritty and we used that to make a plan of attack to move forward in paying off the debt and we ended up getting rid of all that debt within the first year of our marriage.

Tai:
Yeah. We were committed. We had perseverance like we didn’t give up and most couples in their newlywed stage such as maybe, Scott, maybe like you’re going out every weekend, you’re really just enjoying life. We didn’t have children at the time. We wasn’t enjoying a lot of that. We were sitting at home eating-

Talaat:
Was on the grind.

Tai:
Right. Watching our favorite television shows while we saved our money and we paid down this debt.

Talaat:
Taking our lunch to work, getting laughed at.

Tai:
That was a sacrifice, but it was one that was not drudgery, did not feel like drudgery for us because we knew that we were building a lifetime together. This was a temporary adjustment in order to have you know such a beautiful life afterwards in the area of our money.

Mindy:
I want to point out that you said when you were telling you know from your point of view, I had to look to me and see what was it about me that made him think that I was perfect. I love that you did not say, “Oh, well. You’re a big mess. I’m leaving. Or, “You know what, you’re a big mess. This is yours to to deal with.” I think that sometimes being the better with money spouse can feel like, “Ugh, why can’t you do it right? Why am I the one that has to do everything right? This is 100% your fault.”
It can be, “Oh, I present this perfect image.” But I love that you were willing to work together. I love that you sat down and, “Okay, let’s look at everything. Let’s lay it all bare and let’s work together. It’s not just Talaat who is having a hard time with the repayment because he has to take his lunch, but you get to go out and he has to stay home all the time, but you can go out with the girls.
I think it’s fantastic and I can’t remember who said it, but one of the guests before previously on our show said, “It isn’t me against him. It is us against the world.” I think that’s so powerful when you’re looking at how to tackle this. Yes, he racked up the debt, but he also changed his mindset, which is huge. I mean, changing the way that you look at money and being conscious that this way is not the right way to go is a huge hurdle. What advice do you have for people who haven’t gotten to that hurdle yet?

Talaat:
Be willing to at least be introspective. Be willing to say that, “Maybe, I need to look at this differently. Be willing to have enough gumption to say, “That maybe there’s something else that I haven’t thought about.” Because likely I thought there’s been conversations within our head where we’ve formulated this narrative about what the situation is and who this other person is, but maybe it’s been a one-sided narrative that we’ve been telling ourselves. We haven’t allowed ourselves to think a little more deeply and we haven’t allowed ourselves to zoom out from the situation to see again is this the person or was this a part of the person an error the person made?
Maybe it’s not the totality of the person or maybe there’s some signs of momentum change that I haven’t allowed myself to see because I’m so frustrated and focused on this one thing about them, and I think that if we are intentional with our ability to zoom out and take an objective view at the totality of the situation, we’ll find some pieces to the puzzle that we didn’t see because the truth is before this, whatever this is, you loved that person. You were committed to this person. You saw a future with this person.
So you have to take some time to put all that into the what was the things that allowed you to fall in love with this person? What was it that made you see a future with this person and put that into the equation along with some of the challenges that they have currently.

Mindy:
I love that. I love that so much. Oh my goodness. Okay. If you’re listening to this show right now and you want to get your finances in order, go to His and Her Money. Go listen to their podcast. This is all that they do is talk about getting your spouse on board. I mean how much happier are you now that you don’t have to lie to Tai? How much happier are you now that… I mean, even like 14 years ago, how much easier was it to have a conversation with her when she knew all the bad things?

Talaat:
Yeah. It was a game changer because again, the self-created narratives go on both sides of the equation because I created a self-narrative that said if I told her all this, it would push her away. I would lose her. So then I told myself I can’t tell her. But when I did tell her, when she did have all the information, she came closer. She said. All right. Well, we going to figure this out. It’s the total opposite of what I told myself would be that outcome.
So when she took that approach, it was a weight that just lifted off my shoulders because I had a teammate now. I had somebody who knew all the bad stuff and still love me despite the bad stuff. It’s one level when you feel like somebody loves you because when anybody’s dating. You always want to present your best parts of you. You always want to put your best foot forward to be impressive. But it’s another level. It’s another depthness of your love when they can see your flaws and still love you through it, when they can see mistakes that you made and still love you past it. That’s a whole another level of love. When you feel that, you feel like you can take on anything.

Scott:
Awesome. Going back to this first year, you get married and you begin paying off the debt. You pay off $30,000 in the first year. Can you describe what your spending was and how you were able to do that on a more tactical level? What was your housing expense? How much were you paying for food? Can we get an idea of what percentage of your income you were saving to get to that level?

Tai:
We can definitely talk about the income side of it. To be honest, 14 years ago, I don’t remember what our grocery budget things like that was, but we did adopt the principle of not falling for the two income trap. So it’s something that we teach now as well too most times when couples get married. They’re leveraging their entire lives on both incomes. That means the house that they buy, that means the vehicles they buy. That means the way they spend money. The vacations or the trips.
So we knew in order to get a hold of this thing and get a hold of it so fast and which we did within the first year of marriage, we had to live off one income and then use the other income to pay down debt and to also save for our future. So that’s what we did. So we had to literally fit everything into the income, the one particular income at the time and if it wasn’t in the budget, if that income could not carry it, we couldn’t do it.
So that allowed us to take the other person’s income and to throw it at that debt aggressively, to throw it at savings such as… Because at the same time we were also building our emergency fund at the same time. We were just brand new, newly married coming together combining our finances. So we had to build an emergency fund, at the same time we had to get out of debt and at the same time we have to figure out money in marriage, what does that look like? Who gets to have the say? Who gets to do the budget?

Talaat:
We messed up with that one.

Tai:
Yeah, exactly. So we had to figure things out at the same time while we were paying off debt.

Scott:
What were your friends and colleagues doing at the same time in contrast, if there was a contrast?

Talaat:
The exact opposite.

Tai:
It’s a blur to me, honestly.

Talaat:
It’s not for me.

Tai:
Because I felt like I had tunnel vision. I didn’t care what anybody outside of our house was doing or I don’t even remember. It was just like the McNeely household, what were we doing inside of the house and how would we-

Talaat:
I remember because I use people’s doubts.

Tai:
Yeah, your guys.

Talaat:
I use people’s jokes as fuel, as motivation.

Tai:
Yeah, that’s true.

Talaat:
So at work everybody went out for lunch and I had the Hot Pockets that I was warming up in the microwave, and people had stuff to say about that. Even family, even close people like, “Man, it doesn’t take all that.” When after church, everybody’s going out, well, we can’t go out this time. You know what I mean? We had to make those conscious decisions.

Tai:
Or we went out, we were pulling out cash and they were like, “Is it that serious? What are you doing? Why are you counting cash right out of the envelope?”

Talaat:
So we were willing to do that because we were future minded. We had a goal and we didn’t really care. That goes back to what you were saying. We adopted that principle, us against everybody else. Everybody can laugh. Everybody can [crosstalk 00:21:12]. Everybody can have comments, but we’re still going to do our thing. You know what I mean? We had thick skin. None of it got to us, but for me, I always, in situations like that, use it as motivation like, “Okay, keep watching.”

Tai:
I think you bring up a good point especially for me and that was probably an eagle thing for you having to deal with that with maybe your colleagues. For me, my colleagues saw me bringing my lunch bag to work and I didn’t care what they thought. They didn’t care what I was doing. I think, for me, it was something that they always saw me doing. For you, you had to now change the way that you were doing things.

Talaat:
Yeah.

Tai:
Because now you are married and you want to better your financial life so they’re probably like, “Oh, wait a minute. You can’t go out now? What’s going on?”

Talaat:
Oh, she wearing the pants.

Tai:
Yeah, for me I was consistent. I was consistent and so nothing really changed from their point of view.

Talaat:
Yeah.

Scott:
Yeah. Well, I think that that’s… This isn’t a something that I think people struggle with is because in many relationships there’s going to be one person who at least comes in or begins with a heavier bias one way or the other around how we’re going to handle money. The distinction between you guys, I think was very extreme in this, but everyone deals with that in their relationships, right? At least some dichotomy there, Some differences. And I think what’s powerful here is… So I think it would have been really hard for you to change your mentality around money and make these changes perhaps if it hadn’t been for Tai you embracing his problems or his mess as what we just called earlier as your own and going in there all in and doing the same thing in conjunction.
For example, do you think… I don’t know, but do you think that there would have been a difference in your ability, Talaat to change your approach with money if she had left you more on your own or you had differentiated finances during this period in the first year?

Talaat:
Yeah, I think it was a game changer because I felt the responsibility of being somebody’s husband. I knew that this new season that I was going into would require me to be different. I couldn’t be the same way that I was because at that point in my life, even though I didn’t have the game plan figured out, I knew that the results that I was getting was not the results that I wanted. So if I wanted some different results, I was going to have to take some different actions plus the fact that I was going to be a husband, plus it’s not just about me anymore, and I’m trying to build a future.
One day we want to have kids, that’s for sure. So again, all these things, I always look to the future even to this day fueled what I was willing to do in my present tense. So that new level of responsibility was a huge factor in my progression on a personal level with my understanding of money and my interactions with money. I think that if I wasn’t in that season of about to get married, my progress would have been much slower if there would have been much progress at all. It might have took me a little longer to be willing to buckle down and do the work necessary. So me becoming a husband was a big, big part in my advanced progression.

Mindy:
Okay. So Tai you said that we were getting ready to combine finances. Do you recommend that couples combine their finances when they get married? Or if they haven’t combined them and they’re already married and they want to change their financial picture, do you recommend that they start to combine them?

Tai:
Yeah. So this is like one of the number one questions we get.

Talaat:
You about to get y’all in trouble, Mindy.

Mindy:
That’s okay.

Tai:
I honestly feel like people ask this question because it’s like they kind of want to see like, “What do you think? What do you think?” So yes, we believe that couples should combine finances. We don’t believe in just making decisions to have children or making decisions to build a lifetime together. My children are worth much more than my money and if I can trust this man to be the father of my children, I could definitely clearly trust them to handle the money.

Mindy:
You can share DNA, you can share money.

Tai:
That’s how I look at it. Now again-

Mindy:
I love it.

Tai:
… we’re not talking about those cases, unusual cases, right? So yes, if you have a spouse that clearly the signs are on the wall or clearly they’re being dishonest in a way where you have to now fend for yourself, protect yourself, you and your children, that’s a whole different story. We’re not talking about that. We’re talking about the average couple who maybe things are going well like no issues whatsoever, but things could be a little bit better. We tell people don’t knock it unless you try it. And for us, it taught us to grow more trust with each other.
If you can trust this person with your money, that’s one of the world’s biggest exercises. You know what I mean? Like to be able to trust them with your money. And we always feel like when two are focused in a thing together you can gain whatever it is that you’re trying to gain a whole lot quicker. So for us yes, we believe there there’s no I in marriage. It’s we, it’s us. And we make that decision. We made the decision now. Within our money, of course we have individuality, right?
That’s where budget comes in where he gets his own spending money. I get my own spending money. He could do whatever he wants. He doesn’t have to be accountable. I can do whatever I want. I don’t have to be accountable. So you could still interweave some individualness, some independency within having combined finance.

Talaat:
Yeah. But the overall plan was crafted together to include the individual spending money that we get to do what we want with. I think that we all know like we’ve heard countless amounts of research to say one of the number one marriage killers is financial issues. So we know that that’s one of the number one ways that marriage is in. Why would we put division in it? Why would we proactively put division in an area that is known to divide marriages permanently.
So I just think it’s a dangerous proposition for you to allow that to be because then that just leaves so much wiggle room for you to build up this wall of independency that prohibits you from joining in other areas of your life because you see yourself as this independent person. And what tends to happen is your marriage becomes more contractual than covenantal and you all are almost like business partners and roommates.
I used to have roommates and I remember on the first of the month, we each put our check on on the dresser. It was three of us total. One-third of rent, one-third of electric, one-third of gas. You know what I mean? It feels more like a roommate situation than this is who I’m spending the rest of my life with.

Tai:
I feel like it just adds more work having individual things where it’s like, “Okay, who’s going to cover the mortgage? Okay. We got to eat. Who’s picking up the tab?” I’m married to this person. I don’t want to have to figure out-

Talaat:
I paid for the steak last time. Wait, I didn’t have an appetizer. You didn’t have an appetizer.

Tai:
Yeah. To me like I don’t want to keep notes and keep tally and keep checking on how we’re spending our money. Have you spent your fair share? And because things change within a marriage, right? I started out working in the beginning prior to us having children and I was bringing in more of the income, but it was our income in the house and then there was one day we had children and I decided to be a stay-at-home mom.
We get emails and questions from people, especially single moms. Mot single moms, but stay-at-home moms where they feel burdened like, “Oh gosh, I feel like I have to help my husband.” They have so much pressure. Here it is. They’re taking care of children which is one of the greatest jobs in the world.

Talaat:
The most challenging.

Tai:
The most challenging, right. And at the same time you’re trying to figure out-

Talaat:
And most underpaid.

Tai:
You’re trying to figure out, “Oh, I don’t want to feel like I’m not doing my fair share.” What? To me, it’s just backwards. It’s backwards. No, we highly recommend and that’s something that we stand on that we don’t waver on unless of course there are extreme situations where you need to have your own.

Talaat:
So please send all your comments and questions to [email protected].

Scott:
That’s right.

Mindy:
Yes, please because I 100% agree with everything that you’re saying. I almost said this is my first marriage. It’s my only marriage too.

Tai:
How long you’ve been married?

Mindy:
I am not going to be dating anybody ever again. I’ve been married for 19 years.

Tai:
Oh, okay. [crosstalk 00:29:03]

Talaat:
Nice. Congratulations.

Mindy:
Thank you, yeah.

Scott:
I’ve been married for 19 days.

Talaat:
Yeah. [inaudible 00:29:08], Scott. Welcome to the club, brother.

Scott:
I think it literally is 19. Yeah, about 19 days.

Tai:
Wow. That’s awesome.

Mindy:
That’s hilarious. But when we got together, we had basically nothing. Both of us brought nothing into the marriage. He brought up the idea of a prenup and I’m like no.

Scott:
21 days, sorry.

Mindy:
Oh, 21 days.

Tai:
Okay. Awesome.

Mindy:
Your golden anniversary. You got married on the 21st. So [crosstalk 00:29:37] we were both bringing in nothing to the relationship. So it’s not like we had anything to protect. I think I had a condo and he had a house and they were worth about the same. Maybe his house is worth more, but not much. So we combined our finances. We took all of my money and put it into his bank accounts because he’s a computer guy and this was 20 years ago, 19 years ago and he had already automatic debits coming out of his bank account.
So he just put my name on his account, all my money in his account and then continued on. Because I don’t know if you know how to… If you’ve ever had to change your automatic withdrawals, but it is a nightmare and a half. So we just did all that. That was great. And that was 19 years ago. I can’t even imagine now we’ve had the same bank because it’s such a disaster. But we have always combined finances and when I was not a mother, I had a job.
Then when I became a mom, I was a stay-at-home mom. He made about four times what I made. So it was a no-brainer for me to stay home. Because seriously my paycheck would have covered the entire amount of daycare. I would not bring anything home. I wanted to be a stay-at-home mom. And this is not judgment on anybody who doesn’t want to be a stay-at-home mom or can’t, this is just my situation. When I was home, I would go to the grocery store and I never felt like I had to ask him if it was okay because this is our money.
But then when I was going out to buy a purse that I did not need, because I already had three at home, I would reach out to him, “Hey, do you care if I… There’s this purse that’s $20, but it’s really cute.” He’s like, “I don’t care.” I’m not buying $500 purses because then he would care.

Tai:
Right.

Mindy:
Talaat, you think your parents are cheap. Let me introduce you to my husband. I’m working on him. But I grew up cheap too. I grew up like super frugal. But I think it’s so much… It’s so important to combine finances and what you said, exactly what you said is like perfect. I want to cut that part out of the video and make it a standalone video. Should I combine finances with my spouse? Yes, here’s why.

Tai:
Exactly.

Mindy:
[email protected]. Send me and I will forward them on too Tai and Talaat.

Scott:
No, it’s funny because we’re talking about this right now, Virginia and I and those types of things. And really we’ve agreed I think to combine finances. It’s just a matter of mechanically making that work. So thank you. I think we’re going to probably do… I’m going to suggest like what you just described, Mindy for Virginia just adding that into the one that I’m using because… We’ll see. But we have to just work out the mechanics basically of it, but that’s the mentality that we want to have is what you guys just described around money. I think that’s really healthy one, the one that we’re in the process of adopting.

Tai:
Let me tell you, we received feedback emails updates from people that say at first when you said it, I thought you all were crazy, but when we tried it, I didn’t think that I could be even closer to my husband than I am now. I didn’t even think that we could pay off our debt a whole lot sooner than we are now. I feel like our visions are more aligned because there’s oneness. So that’s why I tell people don’t knock it unless you try it, but it’s definitely something that has worked well for us and it’s something that we highly recommend anybody do.

Talaat:
It’s counter-cultural unfortunately to have this type of mentality because people literally gave us advice, both individually, separately that we should have some money on the side.

Tai:
Girl, you better have your separate account.

Talaat:
Just in case.

Tai:
You never know.

Talaat:
It’s almost like you’re preparing yourself for a disaster ahead of time. And just we’re not with that. We’re believing and we’re putting them to work to make this a lifetime situation. This is who I said I want to spend my life with. So I want to do everything in my power that I do have control over to make that happen. So again, if this is an area that destroys most marriages, we need to put a whole lot of intentionality around making sure that we don’t fall inside that statistic.

Scott:
Yep. Well I think it’s wonderful advice and I’m learning a lot from you guys here, so I appreciate it personally.

Tai:
Oh, man. Great.

Scott:
So I’m thinking about going through some of these things right now. So let’s go back to your story though real quick. You guys just paid off $30,000 in your first year of marriage which was I believe you said 14 years ago?

Tai:
Yeah.

Talaat:
Yeah.

Scott:
What happens in the second year? What do you guys begin doing once you get back to zero and how do you begin approaching your philosophy around money at that point?

Talaat:
Yeah. The dope part about getting out of debt is your ability to take some risk. So we tried some things entrepreneurially. We tried some things investment wise. We took our first foray into-

Tai:
Real estate.

Talaat:
… invest in real estate. We bought a house, rehabbed the house, put it on the market just in time for the great recession to take place and it didn’t work out at all right but because we have positioned ourselves to be out of debt, to have an emergency fund in place, we were able to take risks. So even the losses that we took, one we took them together because we tried all these different things together, several different business ideas that we tried. It was fun.

Scott:
Can I ask a couple questions here? You were able to have $30,000 in debt the first year. Were you able to kind of accumulate wealth at that rate or greater in the following years just from your personal home cash flow situation or did that change? Did you ease off a little bit for example after you paid off the debt?

Tai:
At that time, we had started saving money to put money down on our first real estate, our first rental property that we did not end up renting out. So we were able to then beef up our emergency fund a little bit more, but at the same time we were able to try different entrepreneur ventures.

Scott:
We were doing you know the 401k game and all that type stuff.

Tai:
Right and we started traveling more so we started to really enjoy what should have been probably our first year marriage. We started enjoying our second year of marriage. So we started just disseminating our money in those ways, but for the intent to invest in real estate.

Scott:
Yeah, awesome. I assume your incomes are growing as well during this period. So it sounds like you’re accumulating wealth at a 20, 25, $30,000 rate in these first couple of years. Then you’re saying you did entrepreneurship and real estate investing. I think this is really important because once you get off paying the debt, this is the fun stuff of finance, right?

Tai:
Right.

Scott:
Were you guys maybe doing a little less retirement account contributions at this point and more in the context of liquidity or how… Okay.

Tai:
No.

Talaat:
No. We-

Tai:
We actually ramped up our investing [crosstalk 00:35:59].

Talaat:
After we got out of debt.

Tai:
We actually ramped it up. I think it was probably like 15% at the time, but something too that I don’t want to forget. We also started to give more. So we had the ability to give more. We were…

Talaat:
That felt just as good.

Tai:
It felt just as good. I mean, we were doing things that people didn’t know about like paying other people’s mortgages and things like that and giving trips and vacations. We started to find radical ways to be able to give to others.

Talaat:
Find toys for our kids that didn’t have Christmas gifts.

Tai:
Yup. Christmas and things like that. So it wasn’t like we were hoarding this money. Honestly, we were now putting it to things that really tugged on our hurt. So the giving increased, but also our investing increased into our own individual 401ks and then saving for real estate.

Scott:
Awesome. So with the saving for real estate and entrepreneurial ventures, one of the things I want to get this mindset around, how much cash do I need to feel comfortable with that? So how are you treating your emergency reserve in the context of going into real estate or entrepreneurial ventures?

Tai:
Back then, man, I wish, we had that interview 14 years ago.

Talaat:
I mean, they were two different funds. We focused almost primarily on getting the emergency fund a little higher. And then once we checked that box off, then the cash was going towards the investment property. It was based on… Man, that time, the going rate at that time we knew we needed a certain amount of down payment and we knew that we were getting the type of property that was going to need rehab.

Tai:
We put 20% down. That I remember. I don’t know remember how much it was, but I knew it was 20%.

Talaat:
Yeah. And we knew that we were going to have to fix it up and things like that. So we factored all that into it.

Tai:
Cash flowing.

Talaat:
We had carrying costs. Like I said, it didn’t work out. We had that house a whole extra year than we thought we were.

Tai:
And we have to bring this part up as well too. In the timeframe when I decided that I now wanted to stay home, because now three years into our marriage, we had our first child. So by that first year after he turned one, I ended up coming home. He also was going through a job transition to become a teacher.

Talaat:
Yup. I was a grad student.

Tai:
So he then now exits the military. He’s in grad school, getting his degree and he’s doing his student teaching. So money wasn’t coming in from him.

Talaat:
And she decided she want to quit, Scott.

Tai:
I did.

Scott:
What year are we in right now?

Tai:
This was three years into our marriage. So this was like 2009, 2010.

Scott:
Okay. So you’re in the midst… So a bunch of things are happening. There’s job transitions.

Talaat:
A whole lot, Scott.

Tai:
A whole lot.

Talaat:
So much going on. So much was going on.

Scott:
And you’re losing money on real estate. You’re transitioning jobs.

Tai:
Exactly.

Scott:
You’ve got a one-year-old and yet you’re fine because you’ve had these disciplined financial habits for years in a row and you’re really smart about your money. Is that it?

Tai:
That’s exactly it. The discipline. The work that we put in on the front end, we were able to then reap the rewards from that in a time where we were going through major life transitions. So because-

Scott:
And the rest of the world is on fire economically.

Tai:
Exactly, exactly. And we weren’t even like sweating in a sense. So we were able to live off our emergency fund while he was doing the student teaching until you were able to finally do some substitute teaching. And then he finally got into his degree.

Talaat:
Official teaching. Then we got crazy, Scott. We bought our first single-family home and we told ourselves that we weren’t going to take 30 years to pay it off. We told ourselves we were going to pay it off in five years and five years from the date that we closed on the house, we walked into the bank with our now three kids and we made our final mortgage payment, $330,000 five years. So we are 100% debt-free.

Scott:
And where where is this located?

Talaat:
Illinois.

Scott:
Illinois, okay.

Talaat:
Chicago land area, yeah. Midwestern.

Scott:
So we have this big inflection point in 2009, it sounds like.

Tai:
Yes.

Scott:
And then we’ve got another inflection point five years later when we’re paying down the mortgage.

Tai:
Right.

Scott:
I just want to walk through these couple of steps here. During that period where you’re paying off the mortgage, are you also investing in other assets or building wealth in other ways or is it really just throwing every extra dollar at the mortgage?

Talaat:
So for us, we set our investing at a certain threshold. We automated it and then all the other dollars that we brought in, that was beyond that point. The goal was for the house to be paid off. So we did some extra jobs. We had every tax return that came in, went that way. When we got pay raises, we didn’t up our living expenses. [crosstalk 00:40:30] We would literally call the bank if I got a raise and adjust our extra payment that we would send and automate the process. So a lot of it was on automation, but a lot of it was we were like looking around selling stuff and doing extra flipping stuff from the thrift stores.

Tai:
Because we knew that we did it before. We knew that we can be disciplined enough to do it again. So we created an entire series on our YouTube channel for those who are very interested in how we did it. Just go to our YouTube channel, youtube.com/hisandhermoney. We have a playlist for how we pay off our mortgage. So we give insight and tips, the reason why we did it, that would actually be longer than a 30-minute episode here. But for the most part, we made adjustments. We made a lot of adjustments because at the time, you have to realize, now we have three children.

Talaat:
And no income.

Tai:
Right. And children cost money. At the same time, we were building His and Her Money. I think we didn’t get to that part how we ended up coming to the His and Her Money thing. But people saw us pay off that consumer debt within our first year of marriage and people started asking us how’d you do it?

Talaat:
The people that was laughing.

Tai:
Yeah. They started asking, “How did you do it?” We were inviting people into our home. They were sitting on our couches and we were counseling them and then we were like, “Wait, maybe we should take this to the world. If they’re at our little corner, they’re asking us questions, they’re probably… So many other families that need the answers as well too. So that’s really how His and Her Money was born and then at the same time we want to show the world through His and Her Money that, hey, you don’t have to stop there just with your consumer debt. You can now go on and pay off your mortgage and that’s what we did.

Scott:
Are they now enjoying Hot Pockets, some of these folks?

Talaat:
Yeah, they made some changes. You know what I mean After they saw the result… Actions speak louder than words sometimes and so sometimes when you’re in the midst of the fight, you’re saying, “Listen, guys. I’m getting out of debt. I’m making some progress.” Then like, “Oh, yeah, yeah. Okay, whatever.” Then when the finality happens and you have a result, an outcome, then their ears start perking up.

Tai:
Exactly. We had somebody recently, which was interesting. We were doing a live on our YouTube channel about a week ago and somebody back from those days literally put a comment.

Talaat:
Yeah. He jumped in on the live.

Tai:
He said he will bring his lunch to work.

Talaat:
I remember he used to bring his lunch to work.

Tai:
I was like, “What?” So it was like he remembered that and then also he was watching you really tell your story and instruct others how to live their lives financially.

Talaat:
It’s like all that stuff led to the life we live now. And this is what we had in our head. You know what I mean? The reason. This was our why to get to be able to control our life, control our days.

Scott:
Well, I want to get to that point because that’s the fun part here, but we still have parts of the story. So I’m hearing that we’re sitting in 2014-2015, is that right, when you pay off the house?

Talaat:
No, no. We started the process in 2013 and we ended the process in 2018.

Tai:
2018.

Scott:
Great. So we’re in 2018 and we’ve got a position with a paid-off house, what I imagine are some strong retirement account contributions that have compounded over the years and then maybe a cash cushion. Is there any other wealth to speak of at that point or is that mostly the… It’s a wonderful position. I’m just [crosstalk 00:43:39].

Tai:
We started putting a lot of focus into our own personal brand, our own personal business.

Talaat:
We were reinvesting back in business.

Tai:
Because we knew that one day he was going to walk off his job. I wasn’t working at the time. I was working in the company, His and Her Money and taking care of our baby so at this point I was still a stay-at-home, work-at-home mom. We knew that eventually he was going to walk away from this educational career.

Scott:
Which you can do because you have a paid off house. [crosstalk 00:44:06] emergency reserves and other investments which allow you to-

Talaat:
Paid the price.

Scott:
… flex those entrepreneurial muscles.

Tai:
Exactly, exactly. So we were really crazy with trying some so many different things like our risk levels and all that. We were really conservative simply because our main goal, we wanted to pay off this mortgage. We knew that to some people it may not make mathematical sense to pay off your mortgage, but for us, personal finance is personal. Nobody can take away how this feels especially in the middle of a pandemic and we’re working full-time in our own business while we’re doing remote learning across the hall with our children.
Nobody can take that away from us how that feels when we’re not stressed like, “Oh my gosh, we have to pay our mortgage.” Because mortgage payments is probably the highest payment or debt payment that anyone has in their life. So if you can knock that out, my gosh the options and the different things that you can do.

Talaat:
There’s so many things that don’t go on a calculator. I was a few minutes behind on this interview because I had to go help my mom. I’m an only child. So when she needs help, I can just go. I don’t have to ask somebody permission to go help my mom with X, Y and Z because we paid the price upfront. So now we can control our situation and we’re self-employed. So when others need help that we love and care about, we can just go do it. So you can’t crunch that inside of a calculator.

Scott:
Okay, wonderful. So let’s walk through this part as well. So you’re building His and Her Money. How is that growing during this period and when do you thought transition out of your job and how does that work?

Tai:
So he transitioned out of his job, not even a year after we paid off the house.

Talaat:
Yeah, less than…

Tai:
A month. No, two months.

Talaat:
No, no, no. We paid up the house in July.

Tai:
You left in March.

Talaat:
Right. That’s more than two months.

Tai:
Okay.

Talaat:
I’ll say less than a year.

Tai:
About seven months.

Talaat:
Less than a year. Less than a year.

Tai:
About seven months.

Talaat:
Exactly. Less than a year, you walked away.

Tai:
Yeah.

Scott:
[crosstalk 00:46:05] What I think a big factor in this is, is I love the fact you paid off the house, but you still have taxes, insurance, those types of things with it and you still have other expenses for the household. In order to feel comfortable walking away from the job, I imagine that there’s an emergency reserve that’s what a lot of folks have and enough of a perception of the upside or opportunity from your business to make that call as well. And that’s what I’m trying to-

Tai:
Yes and no honestly. Talaat was not going to walk away from his job at the time that he did. He was actually going to still finish out that school year because we were still in the planning phases. We knew it was coming, but we were still planning. We were still trying to beef up the savings and stuff like that. At that point, we beat up the emergency fund.

Talaat:
To 12 months.

Tai:
Right. But there were some things that led to… We think that now is the time for him to leave. So we didn’t even really have it all together, honestly like this picture-perfect ideal situation.

Talaat:
One person.

Tai:
No. His and Her Money was steady and growing. So at the point when you walked away from your job, I don’t even know if the company made six figures that year.

Talaat:
I think we had just our first.

Tai:
We had just had our first six-year figure. Just had our first six-year figure.

Talaat:
Six-figure year.

Tai:
Yes, right. Six-figure year. So we were like, “Oh my gosh. This is really going to work.” But we knew that he and I together because we were able to pay off our mortgage, we were able to become completely consumer deferred within our first year. We knew that there was nothing that will stop us from doing.

Talaat:
We created the margin necessary to take the risk.

Tai:
Yeah, exactly. So we knew that there was nothing that we could not do. Because we didn’t have the mortgage, we knew, “Okay, we don’t have to have the stress. We don’t really have to pay ourselves from the business, which we weren’t. We just really honestly started paying ourselves a salary from our company.

Talaat:
And our level of expenses didn’t require a whole lot.

Tai:
Exactly.

Talaat:
So again, we put margin in place to allow us to take the risk. Even like Tai said though the situation wasn’t perfect, we stacked the deck in our favor to at least try to do it.

Scott:
That’s exactly what I was hoping to get to. It’s never perfect with those type. You guys did all the work up front to… And again, you had this emergency reserve and you had enough income to feel like it was the better move for your future to make that transition at that point. The point is most people can’t take that risk because they haven’t, as you’ve said several times now, paid the price up front with that stuff, with the years, the grind [crosstalk 00:48:31].

Talaat:
Hot Pockets.

Tai:
[inaudible 00:48:34]

Scott:
I haven’t had lunch yet so that actually sounds really good.

Mindy:
Today’s episode is brought to you by Hot Pockets.

Tai:
Right, exactly. [inaudible 00:48:41]

Mindy:
First off, that is the best argument that I have ever heard for paying off your house early. I have only ever heard the financial argument and money is so cheap right now. Why wouldn’t you get a loan? I have a client. I just talked to her today and she’s like, “Well, we want to buy this house with cash. Okay. I can make a financial argument, a money argument, “Hey, that’s… I got a quote for 2.8% on a mortgage. That’s practically free money.” But it’s not free. It still comes with a monthly payment every single month.What are your expenses without the mortgage? Since you don’t have a mortgage, let’s say His and Her Money stops bringing in any income at all.

Tai:
Right.

Mindy:
What kind of job do you have to go get to feed your family?

Tai:
To be to be honest and this is not to sound prideful, I don’t think that we would ever go back to work a nine to five. I believe that we have adjusted our lifestyles to the point that where we are now today that we could literally make it work and take care of our family even if we had a side hustle.

Talaat:
Yeah.

Tai:
I want you to talk I wanted to talk a little bit about that point how you said, “Money is so cheap.” Now interest rates, 2.8. We had a great credit score when we got our home. We had a very good rate and we still paid $25,000 in interest on our mortgage. So we want people to see that. A lot of times you just think that you’re buying your home for this dollar amount. That interest adds up, right? By the time you pay off this home in 30 years, you have probably paid for that house twice, two and a half times.
So you want to get smarter than the banks, right? I don’t want to buy any real estate where if I have equity in our home, really that equity is nothing if I’m paying more in interest, right? It doesn’t make sense. So you really have to literally do the math and figure out a way to get yourself ahead of the curve. So for us, it was paying off our mortgage.

Talaat:
The banks are not dumb. You think just because you got a 2.8 that the system is in your favor.

Tai:
It’s not.

Talaat:
And you’re sadly mistaken. Look at your amortization statement then with your 2.8%, all right? Look at what happens in the first five to seven years of that amortization statement. Guess what? It’s not an accident that you pay nearly all the interest in the first five to seven years of that loan. You know why you pay it? Because they have done their research and they understand that the average homeowner moves every five to seven years. So they have stacked the deck in their favor even with that 2.8% to make sure that they going to get their money and then when you move, guess what? The clock starts over.

Tai:
All over again.

Talaat:
And they get more money. They want you to refi because the clock starts over. And they get their money even at 2.8%. You still have taken an L.

Tai:
That’s why I tell people do the math. Sometimes people look down on people that are renting. More than likely over your lifetime, you may have paid more in paying mortgage payments by the time you had interest than somebody that was actually renting an apartment. So just because you have this asset is not truly an asset if you don’t win in the end.

Scott:
Mindy and I just wrote a book on first time home buying and I ran the analysis on buying versus renting and I have chosen to rent. I’ve owned house hacks or properties in the past and yeah, I am sitting here renting because I think it’s the better move for me right now. Because I don’t think I’m going to be in this look in a house that I’d buy right now for more than five to seven years, realistically. It’s just me and Virginia right now. We don’t have a family yet. Why would we need to buy before we need it and why would we… I’m paying more for stuff that I don’t need right now and it’s a good time to be renting, I think.

Mindy:
Because your home is an investment, Scott.

Tai:
Scott, where can they go find your book?

Scott:
Oh, yeah. We should plug the book. When is it… It’s launching-

Mindy:
It comes out in March, I think.

Scott:
March 11th.

Tai:
Okay.

Scott:
Yes. First-Time Home Buyer. It’s been released March 11th.

Tai:
I think that’s great.

Scott:
Don’t worry. We’ll give everybody a chance to hear about the book in great detail. We’re very proud of it.

Tai:
Yeah, that’s great.

Scott:
It was probably the first time we mentioned in the podcast, but it won’t be the last time we mention it in the podcast.

Mindy:
So Talaat’s point about the amateur… I just ran on Google and I just plugged in some random numbers based on the mortgage that I just got on the first payment. $300,000 at 3.5% because that’s my mortgage. The principal amount of my payment is $472. The interest is $875.

Tai:
More than the principal, double.

Talaat:
Double.

Mindy:
I am paying twice as much interest as I am on the principal in the beginning. And then of course if you scroll down for 30 years your last payment is $4 to interest and $1,343 to principal. But that is not the beginning. Am I going to be in this house for 30 years? No, I can guarantee that.

Tai:
On the amortization schedule, does it tell you how much you paid in interest payments?

Mindy:
This one says my payments for interest will be $184,968 which-

Tai:
How many houses can you buy with that?

Talaat:
With a great rate.

Mindy:
Oh, with a great rate, yeah.

Tai:
You know what I’m saying? So it’s like you want people-

Mindy:
In my area you can’t buy anything for $184,000.

Tai:
But it may not be your area. Maybe you can invest in a different state, right?

Mindy:
Oh my god. I could buy [crosstalk 00:54:09] like four houses.

Tai:
Exactly. This is what I’m saying. So it’s like do the math, people. Do the math. I’ve heard people say it’s dumb to pay off your mortgage. Well, for us, it’s actually put us in a better place because now we’re able to now run our company without having the stress, again especially in the middle of a pandemic where a lot of people unfortunately are trying to figure out how to keep it on their head.

Talaat:
Stay afloat.

Tai:
Right. And now the whole purpose of getting out of debt, the entire purpose of paying off a mortgage is not to feel comfortable where we are right now. It’s for our future. We don’t know what the future holds. So we want to put ourselves in the best-

Talaat:
Stack the deck in your favor.

Tai:
… possible position because we don’t know what the future holds. Nobody knew that the entire world would be impacted at the same exact time like it has in 2020, right?

Scott:
This whole world of finance is just a spectrum of freedom, right? When you started off, you weren’t free because you were $30,000 in debt and you were like we’re not going to relax for one second here until we’re out of that debt. Then you still didn’t relax. You built up an emergency reserve and made some decisions there. And then you invested in things that had the potential to move your position forward, but couldn’t wreck you.

Tai:
There you go.

Scott:
You invested in position of financial strength. It didn’t work out, but yo you always had that freedom and so when the time came and the economy tanked, you weren’t struggling like a lot of other people, right?

Tai:
Mm-hmm (affirmative).

Scott:
And then now you again continue to build that freedom and now you have total discretionary power over your day and how you spend your time.

Tai:
Exactly.

Scott:
Unlike the vast majority of people on this planet, right? That’s the power of this thing. It’s not like you just start reaping the rewards all at the very end of it at the end of the day, it just keeps getting better and better and better as you build a stronger and stronger position, with of course the caveat you have to be disciplined throughout that.

Tai:
That’s right.

Scott:
That’s the price you pay.

Talaat:
We went through all those ups and downs that you talked about. We made all the sacrifices that we’ve talked about and some things like we talked about are intangible, the way that we get to be in our kid’s lives and their activities being our parents lives. They’ve needed our help in situations. We’ve been able to get in the car and go. But there’s also been some very tangible things that have happened as us doing this, been able to build a business together.
We’ve been able to achieve millionaire status together all because of the prices that we paid. It wasn’t one big massive thing, it was us doing the little things consistently over and over and over again being willing to be different, being willing to go counter cultural, having goals that we set together and then we blocked out the noise of everybody else and we just put one foot in front of the other and we kept going.

Scott:
Now you’re an overnight success in just 14 years.

Talaat:
Overnight.

Mindy:
14 short years. Let’s go back to the 14 years ago when Tai had a job, when Talaat had a job. And bring those two people to now. You both have jobs and you’ve got kids home from school because of a pandemic. What do you do with your kids? I hope you didn’t predict this pandemic because I would have liked to share that with me please. But my husband doesn’t work and he’s there teaching the kids at the end of last year. Oh my goodness, what a disaster. But I don’t even know what people are doing. My heart goes out to all these parents-

Tai:
Mine too.

Mindy:
… who have no way to… I have to send my kids to school because there’s nothing I could… I have to be in the office. I have a job where I have to be there.

Tai:
Right.

Mindy:
And just the freedoms that like you said, you can never predict what’s going to happen. So do you miss the whole brand name lifestyle and having a car with a car payment and a nice stereo? Do you miss that, Talaat.

Tai:
I still like things. That didn’t go away.

Scott:
But you can get it now.

Mindy:
That’s okay.

Tai:
Let me tell you, he gets his things. People think that when you have living a debt-free life like you don’t get to splurge, this man-

Talaat:
We plan for it. We plan for it.

Tai:
… get stuff I promise you every single month. I’m like, “Okay, What you getting this month?”

Talaat:
Planned for.

Tai:
He still loves things. He just plan for it.

Scott:
Well, guess what, I don’t know because it’s… And it’s probably impossible to assess because how do you value a business. But I’d pick you guys as millionaires. It’s probably well past that mark, right?

Talaat:
Yeah.

Scott:
As having paid that price, you get to buy whatever now.

Tai:
Whatever you want, exactly.

Scott:
Now, you can buy the… This guy… People are like-

Talaat:
That’s real.

Scott:
… Oh, a millionaire. Can I get a Tesla? Yeah, you can get a Tesla. You’re a millionaire.

Tai:
Exactly.

Talaat:
We were willing to just not do nothing for years, right? Not get things at the level. We still have fun. We still went on trips. We still got stuff, but not at the level. We restricted ourselves so that we could get to a place where we wouldn’t have to restrict ourselves.

Tai:
You miss the payments.

Talaat:
Oh, miss that nonpayment.

Tai:
That one.

Mindy:
Okay. I’m going to correct all of you because you’re saying we paid the price. No, you put in the work. I don’t even like to call it a sacrifice because it seems like it’s going to be a sacrifice. People who are listening now, who are… Maybe this is the first episode they’ve ever listened to of the show and they’re like, “Oh, man. I can’t have anything.” I’m going to borrow from Paula Pant. “You can afford anything. You can’t afford everything.” And when you go to make these changes, don’t cut everything out all at once. That sucks. That really is a horrible, horrible way to live and have no fun at all ever and don’t do anything.

Tai:
There you go.

Mindy:
Don’t do that because you’re going to fail. You’re setting yourself up for failure. You’re going to be like, “Well, see? I said I couldn’t do it and look, I can’t. I was right.”

Tai:
Exactly.

Mindy:
So look at your budget. Look, I’m always going to harp on tracking your spending. What did you spend money on last month? Really, really look at that. Did you need all of that? And yes, it’s January. So it was Christmas and you needed Christmas gifts and blah, blah, blah. I’m not trying to beat you up about last month, but look at where your money is going. Is that really where you want your money to go?

Tai:
Right.

Mindy:
And once you see where your money is going, it’s super easy to make changes. You don’t have to cut everything out. Try one thing. And not even cutting it out. Just reduce it. You spent $1,000 at Target last month. Maybe you spend 850 at Target this month. You still get to go to Target. You still get to spend money at Target, you’re just not spending as much. And then if you were okay with 850, cut it back to 800 or 750. Try to step it back a little bit and see what you miss and what you don’t. Replace the things that you miss and if you don’t miss it then you never needed it in the first place, but you have to be conscious about your spending. So no you didn’t pay the price because that makes it sound bad.

Tai:
But we incorporated celebrations as well. So we tell people that… So when we pay off our mortgage, we did $10,000 increments because it was such a… It felt like a daunting task like we were having to tell ourselves no a lot. So every $10,000 increments, we would then celebrate where we would take ourselves. We have a beautiful city, beautiful downtown area and we would get a nice hotel and go to a nice steak restaurant and enjoy ourselves, talk about life, dream. And then we got done with that. It’s like, okay, let’s go back and hit the grind some more. So incorporate fun, fun within this time. It doesn’t have to feel-

Talaat:
Not just the fun.

Tai:
Yeah. It doesn’t have to feel like, “Oh gosh, five years. I can’t sacrifice that. I cannot get five years without doing the things that I love.” Well, you can still do the things you love, just make sure that you account for that like plan for it.

Talaat:
Make a plan.

Mindy:
I love that. I love that. That’s a great idea. Okay, so incorporate rewards.

Tai:
There you go.

Mindy:
Okay. So we’ve got… Boy, I’ve been typing up these little notes and I see number one, don’t place blame on the spouse who has brought some debt into or has a different mindset that isn’t where you want to be. Number two is lay out all your debts. Get them all out there. I read a book… Oh, I’m blanking on her name, but this woman wrote a book where how she… Her husband would go to work and then she would go out to the car and bring in all the things that she bought yesterday and put them in her closet real quick so he didn’t know that she had new clothes. And she did all the finances.
When she finally came clean to him, they had something like $40,000 in credit card debt and he’s like, “What? Are you kidding me? I had no idea. So I didn’t realize that you could lie to your spouse about money, which is I’m so naive sometimes. But why would you? That’s your partners. But again, I’m not trying to make you feel bad, Talaat for saying that.

Tai:
Oh, no.

Talaat:
I’m all right.

Tai:
He’s good.

Talaat:
Listen, I’m healed.

Tai:
He’s trying to score as little bit [inaudible 01:02:47], so it’s good.

Mindy:
So if you truly are going to come clean to your spouse or lay out all the debts. Don’t try to hide anything-

Tai:
There you go.

Mindy:
… just get it all out there. Number three, make a clear plan of attack together. Number four, combine your finances so that you are in this together. It is you against the world. Number five is do not fall into the two-income trap and number six is give yourself rewards at set intervals. Budget for the fun.

Tai:
There you go.

Mindy:
Is there anything else you would recommend to people who are looking to change their financial picture and get their spouse on board to tackle the world?

Talaat:
I would say to borrow from Dr. Stephen Covey one of his habits of highly effective people. Begin with the end in mind. You have to dream about what you want your life to look like. It’s easy to just focus on where you’re at right now and the fact that you may not be where you want to be, but take some time, some intentionality toward what you do want your life to look like. And then when you paint this picture of what you want the future to be five years from now, you use that picture. You use that information to backwards plan to get yourself your family from the place that you are right now to the place that you want to be.
You use that as your guiding pulse because there will be times where you’re a little less than motivated, but if you have this picture, if you have this information of where you’re trying to get to, you’ll hang in there and you’ll stay consistent.

Tai:
And I will say be the change that you want to see in your spouse. So sometimes spouses, they’ll get frustrated if they can’t get their spouse on board and then a year will pass and they’ve made no traction. You figure out what you can do. So one of the things that I knew that I can control, I can control whether I spend money out for lunch or bring my own lunch.
So what happens is your spouse should be able to take notice like, “Wow, I do see you making sacrifices.” Sacrifice is not always a bad thing. I do see you telling yourself, no and it causes them to reflect and to look at themselves. So do what you can do until your spouse comes fully on board.

Scott:
Yeah. For someone who’s new to this, it’s going to be a really tough sell to say stop spending money on all these things that you’re spending money on and it’s going to be a lot easier if you’re able to say in three to five years, we could be sitting pretty with $50,000 in emergency fund, the option for one of us to stay home and be with the kids. And in seven to 10 to 15 years, we could be self-employed or early retired business owners with complete discretion over how we spend our time in every aspect of life. That’s what you’re selling, not stop spending money on new clothes. I think that’s where they begin with the end of mind and and painting that vision I think is so critical.

Talaat:
Yeah. It’s a game changer because it’s not about the work that you have to do as much as it is about the destination that you’re trying to get to.

Mindy:
Ooh, that’s good. That’s really good. I love that. Okay. Is there anything else you want to cover before we move on to our financial scan?

Talaat:
We would just want people to know that it’s worth it. It’s worth it. The work that’s necessary, the changes that you have to make, the new habits that you have to develop, it is absolutely worth it to be sitting on this side of that scenario. We want you to know that it is absolutely worth it.

Mindy:
I love that. I love that so much. Oh, you guys are so good. You should see my notes. I’m like, “Oh my god, I love them. I love them. This is so great.” This is going to be like killer. This is going to be such-

Scott:
This is a great episode.

Mindy:
… a killer episode. This is so much fun. It is time for our financial scan. This is where we look at where you are investing your money. I’m not looking for dollar figures, I’m just looking for percentages of your investment. 100% bitcoin?

Talaat:
Nah. Our focus right now is on index funds like Scott teaches in his fantastic book. And right now, we are sticking cash to the side looking for the right real estate deal. Those are the two areas that our investment dollars are going towards.

Mindy:
So Scott, did you hear that? Kind of a boring answer. What’s our best answer?

Scott:
Boring, right?

Mindy:
Boring.

Scott:
Simple. Let me just say that they do get a chance to be excited with their finances because you own a business. So I think that’s the right way to do it. Everything else sounds like is stupid simple, paid off house, index funds. Love it like cash, boom. Now, we get to be exciting with our business and personal lives.

Talaat:
That works.

Mindy:
Cash for real estate.

Talaat:
Yeah.

Scott:
Yes.

Mindy:
Yeah. I love it. Whenever anybody is like, “Oh, this is how I invest. I’m 100% in bitcoin and I’m always watching my net worth go like this.” It’s always index funds or maybe a little bit of individual stocks, real estate, some bonds.

Talaat:
We’re reinvesting still into our business. We’re buying better equipment. We’re buying better software. We’re just continuing trying to make our business top-notch.

Mindy:
Well, you guys are crushing it so is that a YouTube award that I see behind you?

Talaat:
It is.

Tai:
Yeah. We hit over a hundred thousand subscribers in March of 2020.

Talaat:
Headed towards 200 now.

Tai:
Yeah.

Mindy:
That’s awesome. That is fabulous.

Scott:
Now, you got one more.

Tai:
Thank you.

Talaat:
Thank you so much.

Mindy:
Okay. One last question in terms of our financial scan. In terms of annual spending, how much do you keep in cash or easily liquidable assets?

Tai:
So I would just say we have a 12-month emergency fund.

Mindy:
Love it.

Tai:
Simply because that’s what makes me comfortable. If Talaat had his way, he would probably have a six-month. So I like to tell him I’m a mom and as a mom sometimes just that extra security just makes me feel good. So we have 12-month emergency fund. Everything else above that is fair game.

Mindy:
I love that.

Scott:
Let me ask you this, because when you have a mortgage payment, 12 months is a little bit more expensive because you have that mortgage payment. Were you able to reduce the emergency fund once you paid off the mortgage as a result of that?

Tai:
Well, we were actually able to now grow the emergency fund more to a 12-month because at the time when we were paying off our mortgage, we only had like a six-month.

Scott:
Okay, got it.

Mindy:
Okay. So people who know about money have a 12-month emergency fund. I just want anybody listening to hear that again.

Tai:
I didn’t even know that. I just thought I was the one that was just being wild and unique. So I’m happy to hear that. That was fun.

Mindy:
No, I’m saying you are the ones who know about money. [crosstalk 01:09:17] You have a 12-month emergency fund.

Tai:
Great. Okay. Well, we’re doing all right then.

Scott:
And I would say that many of our guests, we asked them this question. All answer with that same six to 12 months.

Tai:
Yeah, that’s good.

Scott:
And a lot of the folks who have clearly crossed over the threshold of financial independence which you guys are clearly in, a lot of them are biased more towards that higher emergency. Not all. Some folks have lower ones, but that tends to be… The tendency is towards that I think.

Tai:
Yeah, absolutely.

Talaat:
[crosstalk 01:09:48]

Tai:
It does.

Mindy:
Yeah. You know what, if you decide, hey, 12 months is too much now. I can go back to six. You can always just spend that six months worth of emergency fund or invested in something.

Tai:
That’s true.

Mindy:
But you can’t instantly grasp six months.

Tai:
Promote with it, exactly. Exactly.

Mindy:
It takes a while to grab that six months.

Tai:
Exactly.

Mindy:
Okay. Let’s move on to our famous four. These are the same four questions we ask of all of our guests. And you can each have your own answer. You don’t have to agree on this. So what is your favorite finance book?

Tai:
Mine is The Richest Man in Babylon. I can’t think of the first name.

Mindy:
THat’s mine too.

Tai:
Is it George? I think it’s George, something like that.

Mindy:
George S. Clayson.

Tai:
Yes.

Talaat:
Clayson.

Tai:
Okay. Yep, that’s mine.

Mindy:
It was written a hundred years ago.

Tai:
Really? So it’s a hundred years. I like it. I think the basic-

Scott:
I thought it was written 5,000 years ago. No, just kidding.

Tai:
I like the basic principles of the book.

Talaat:
Yeah. For me, I’m a super practical guy, so I am a fan of I Will Teach You To Be Rich by Ramit Sethi. I think that there’s so many strategies. He’s very transparent like even down to the software and the funds that he invest in. So I just think he gives a complete game plan to lay a firm foundation financially.

Scott:
Although we both love Ramit as well. He’s been on the the Money Show now twice.

Tai:
Oh, wow.

Scott:
I got a chance to talk to him.

Talaat:
Good stuff.

Scott:
What was your biggest money mistake?

Talaat:
So for me, it was lying about the amount of debt that I had and it almost cost me the woman of my dreams. So not being transparent with the totality of my financial situation.

Tai:
Yeah. For me, we created a video on that money mistakes I think we wish we would have made while single. I think I probably would have wanted to start investing a lot sooner than I did.

Scott:
Well, I love the opportunity cost one as well. We obviously discussed yours at length on that.

Mindy:
What is your best piece of advice for people who are just starting out?

Tai:
I would tell couples not to live on two incomes. We tell everybody that whatever you do, do not over leverage yourself based off of the two incomes that’s coming in the household because life will change. It may not change right now or right away, but it will eventually change. So live off one. Use the other to save, invest, build wealth, start a business, do some fun things, take some risks.

Talaat:
Yeah. I think I would tell people to position themselves for a house hack. I think that it’s a heck of a chess piece that if you can-

Tai:
That’s a mistake. Wasn’t that one of the money mistakes?

Talaat:
That was one of them.

Tai:
Now I think about it. That was one of the money mistakes that we talked about.

Talaat:
I wish we would have done first, but I would tell people to position themselves for a house hack because it’s a major chess piece and where you will end up financially five to 10 years down the road.

Scott:
I love it. That was… When I started out, that was my… Once I realized there’s a house hack component, that was just my number one thing. I’m getting into that as soon as possible because it’s just like what a powerful chess piece.

Tai:
Exactly.

Scott:
That propelled my wealth by hundreds of thousands of dollars and my savings rate and all those different types of things. I was able to house hack for seven years before moving back to renting now.

Tai:
Wow. I wish we would have done that and we didn’t have children at the time too, so it would have been more favorable for us. Not to say that people can’t do it with children. I personally just feel like it can be a little bit more difficult when you have, say three children like we do and maybe staying in a one to two bedroom home and house hacking still.

Scott:
All right. What is your favorite joke to tell at parties?

Talaat:
I’m not a joker. I’m such a serious person, Scott.

Tai:
I’m not a joker. No, you’re not. No, he says that I’m serious. He says that I’m serious. He loves to laugh at jokes and it takes a lot to really make me laugh.

Scott:
Well, what do you call a French guy being mauled by a lion?

Talaat:
A baguette.

Tai:
That’s what I said in my head, but that’s all I know when it comes to Frenches of baguettes, so I don’t know.

Scott:
Claude.

Talaat:
I get it.

Scott:
There we go.

Talaat:
I thought croissant.

Tai:
Oh, okay. I don’t think I’m laughing more at your [crosstalk 01:13:53].

Talaat:
#dadjokes.

Scott:
Hashtag or @dadsaysjokes.

Mindy:
Why do fixed interest rates smell so bad? Because they never change.

Tai:
Oh, that’s good. That’s a good one.

Talaat:
That’s a good one. I like that one. That’s a good one.

Mindy:
Okay, Tai and Talaat, please tell people where they can find out more about you.

Tai:
Sure. You all can find us over at our website at hisandhermony.com. We also have a YouTube channel, a podcast called the His and Her Money Show. We’re on all outlets.

Mindy:
Everywhere.

Tai:
Yep. And social media we’re @HisandHerMoney.

Mindy:
This has been fantastic. We are going to link to all of those things in our show notes which can be found at biggerpockets.com/moneyshow159. And if you are serious about getting your spouse on board with finances listen to their show, listen to this show. Listen to the show with your spouse. Talk about from a non-confrontational, non-judgmental point of view. Be like Tai, be like Tai.

Talaat:
Everybody should be like Tai.

Mindy:
Everybody should be like Tai. Because you can get yourself on the same financial page. And like you said, it’s so worth it to not have money fights. My husband and I don’t fight a lot, but when we do fight, it’s really just soul crushing. I don’t want anybody to be like that. I can’t imagine fighting about money. That would just be so heavy and weighing. So if that’s your biggest fight, if you really just want to fix your finances, Tai and Talaat can help you.

Tai:
Thank you guys so much. This was fun.

Talaat:
We appreciate you having us. Keep up the good work guys.

Mindy:
We thank you for coming on.

Scott:
Yeah, thank you guys.

Mindy:
This is fabulous. Okay. We’ll, talk to you soon.

Tai:
All right. Bye.

Talaat:
Bye.

Mindy:
Holy cow, Scott. That was fantastic. What did you think?

Scott:
I really enjoyed it. I thought they had an incredible story and we were able to interweave a lot of really good learnings about how couples can get on the same page financially with this stuff and manage the finances. As you know, obviously me and my wife have talked about finances to some degree otherwise, I’d be completely hypocritical around this. But we got married and guess what, we’re only a few weeks into our marriage and we still have some things to do to dot the I’s and cross the T’s as far as merging and combining our finances. I think it’s really powerful to hear that and I learned a tremendous amount as a new non-bachelor, new husband. That’s what the word is.

Mindy:
Newlywed.

Scott:
Newlywed, yeah. So I really enjoyed picking their brains and then their money story was just incredible. I mean, I love it. That’s the right way to do it. They have complete freedom now and they’re never going to have to worry about the stress of their lives ever. The snowball may just keep growing and compounding for them, but they’re never going to be in a position where they’re reliant on a paycheck or outside lacking control or freedom over their time again.

Mindy:
Yeah. I just was super excited the entire time we were recording. Scott and I share a Google doc when we record so we can take little notes and I’m like, “Oh my god. I love them so much. This is so fantastic.” I learned so much and I’ve been married for 19 years. The way that they phrase things, the way that they put frames around the outlook for this, is just so wonderful. I have never heard somebody make such a good argument for paying off your mortgage.
At the end of the show, if you decide that that’s not for you, great. That’s your choice. But that is what worked for them and that’s why it worked for them. And I thought that was a really great way to frame that. I just loved every minute of this show and I’m so happy that we had them on.

Scott:
Agreed. Loved it.

Mindy:
Should we get out of here, Scott? This episode ran pretty long today.

Scott:
Let’s do it. But I had a lot of fun. It was the perfect length, Mindy today because we used every minute of it and I got value at every minute of it even if it went a little long, longer than usual.

Mindy:
That’s okay. Yeah, it was great. Oh, this was so fabulous. This is probably my favorite episode. Okay. From episode 159 of the BiggerPockets Money Podcast, he is Scott Trench and I am Mindy Jensen saying gotta shake, rattlesnake.