Self-made millionaire's advice to help a couple rein in their spending after racking up $65,000 in credit card debt: 'It's not about whack-a-mole'

Forest, 40, and Kathleen, 42, have been living large in California. 

The couple earns over $286,000 a year, which should be enough to live fairly comfortably with their two children. But years of reckless spending have landed the couple deep in the red, they recently told self-made millionaire Ramit Sethi, author of the forthcoming book, "Money for Couples," on an episode of his podcast. Their last names were not used. 

"We're living on the edge," Forest said. "If my income stopped coming in, it would not be good from a financial perspective. We would pretty quickly lose everything."

Credit card debt is a common problem in America, with half of cardholders carrying a balance from month to month, according to a recent Bankrate survey. Forest and Kathleen have nearly 10 times more credit card debt than the average millennial, who, according to Experian, owes just over $6,500.

While many Americans can place at least partial blame on economic conditions like inflation driving up prices and high interest rates that make it difficult to avoid or get out of credit card debt, that isn't so much the case for Forest and Kathleen.

"Forest likes to ski and cycle, and I like to go to yoga and travel," Kathleen said on the podcast. "And I know those are bougie things…I do care about the adventure and the fun and that kind of lifestyle."

Here's how they racked up tens of thousands of dollars on cards, and Sethi's advice for the couple about how to get out debt.

While there have been several big-ticket items that have contributed to Forest and Kathleen's debt — two $5,000-plus bikes, a trip to Montana, the aforementioned yoga classes and skiing — the root problem, Sethi said, is that the couple had no guiding principle for their spending.

Kathleen said that her principles have been, "It was all going to work out eventually," and "Let's not worry about it."

While it may sound like they could just quit doing those expensive things and focus solely on paying off their debt, it's not that straightforward, Sethi said.

"It's not simply one decision or two, because if we simply try to do it by decisions, it's like playing whack-a-mole," Sethi said. "It's about going deeper. It's about understanding the principle, not the tactic."

He walked the couple through a few exercises to see how they feel and think about money. They're both anxious and know their situation is quite dire, but they haven't sought help because they don't like feeling bad about their decisions. They want to feel proud, empowered and like they actually are as well off as their salary and lifestyle suggests.

They say they're committed to making the necessary changes to get there, but they also accepted that it's not going to be easy.

Forest and Kathleen suggested several ideas that may help ease their debt burden. 

They could sell those pricey bikes and make a plan to eat at home rather than restaurants, but, Sethi reminded them, they needed to commit to a simple and practical course of action.

In the past, Forest has done things like using balance transfer cards and a 401(k) withdrawal to pay down credit card debt. Sethi advised not doing that again.

"You have to have clear rules, and one of those rules has got to be no gimmicks," he told the couple.

He's on board with them selling as many of their possessions as they can to make a sizable dent in their debt balance. That includes the bikes, one of their cars, a rowing machine and potentially more, as they take stock of all the items that helped get them into this situation.

Looking forward, Kathleen said she expects to begin working full-time again soon, so that will increase the couple's income. Sethi encouraged them to set some rules for how to use that extra cash, like putting a certain percentage toward debt and another portion toward their emergency savings — which at the time of recording was almost nonexistent.

Additionally, Sethi encouraged Forest and Kathleen to make an appointment with a therapist who could help them unpack some of the emotions they have around money, and better communicate with each other. 

"There will be times you go backwards, you make a mistake. That's okay," Sethi said. "More important is that you create a healthy culture of money so that whenever these things happen, you can recognize it and you can correct it. "

Check out the full episode here.

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