Ramit Sethi’s advice to a couple with $30,000 in credit card debt

Americans owe more than $1 trillion in credit card debt as of the third quarter of this year, according to Federal Reserve data. The average consumer’s outstanding balance breached $6,000 as of September, according to TransUnion.

Ron and Cristina, however, have around $30,000 in credit card debt, the couple recently told self-made millionaire Ramit Sethi on the Netflix star’s “I Will Teach You to be Rich” podcast. Only their first names were used.

That number may seem daunting to the average consumer, but the couple didn’t seem too worried about it — they even bought a $10,000 timeshare last year. But Sethi revealed their larger financial issues at play.

“The two of you were so calm about this credit card debt, and it’s because you don’t understand the implications of this debt,” Sethi told them. “If you can’t pay this debt off quickly, it will stay with you for five, 10 years.”

Tackling the debt will be a challenge in and of itself. But a lack of financial literacy has led to habits that are holding Cristina and Ron back from achieving financial freedom and building wealth.

Here are the habits that got the couple into a tough financial situation, and how Sethi suggests getting out.

When Sethi asked Ron to describe his feelings toward money in a single word, he said “afraid.” Cristina handles all of the couple’s budgeting and is the only one who keeps an eye on their account balances.

As a result, the couple said, Ron never wants to spend money and leaves it up to Cristina to decide everything on her own, which has caused rifts in their relationship.

Ron considers himself frugal. He is loath to spend money on things like dinner at a restaurant or the occasional vacation Cristina wants to plan. But Sethi explained that there’s a difference between being frugal and being cheap.

“If you are a conscious spender … your frugality only affects you,” Sethi said. “But if you’re cheap, your cheapness affects everyone around…