Americans are drowning in credit card debt and defaulting at an alarming rate. As of the third quarter of this year, U.S. consumers owe more than $1 trillion in credit card debt, with the average outstanding balance per consumer breaching $6,000, according to Federal Reserve data and TransUnion.
In a recent episode of the “I Will Teach You to be Rich” podcast, self-made millionaire Ramit Sethi spoke with a couple, Ron and Cristina, who revealed they have around $30,000 in credit card debt. Despite the staggering amount, the couple seemed unfazed, even admitting to purchasing a $10,000 timeshare within the last year. But Sethi identified their larger financial issues at play.
The couple’s lack of financial literacy and certain habits have led them into a tough financial situation. Ron’s aversion to spending money, leaving it up to Cristina to decide everything on her own, and their lack of understanding of money traps are some of the habits that got them into this financial situation.
Sethi addressed these habits and suggested ways for the couple to improve their financial situation. He emphasized the importance of open money conversations within the couple, aligning attitudes and understanding of money, and avoiding common money traps.
Sethi encouraged the couple to learn together and manage money efficiently. He also highlighted the financial implications of decisions such as purchasing a timeshare, urging them to make informed financial choices. However, despite their current financial challenges, Ron and Cristina have an opportunity to turn things around.
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