Counting the Money Before it’s Hatched. As Erin ($40,000+ in debt) embarked on The Debt Diet, her husband got a new job—and a big raise. The first time we talked, she was excited about how quickly this would enable them to get back on their feet. We talked about them being debt free in a year. This week, she had a case of the guilts. “We’ve had an interesting week of struggles and successes,” she said, sheepishly, adding that she felt like she was talking to her mother. “We were feeling my husband’s raise before he got it. We spent $1900.” On what, I asked. A tablet computer so they can video chat while he’s traveling for the new position and an elliptical machine so she can exercise while he’s out of town. I asked whether either was necessary and she waffled before acknowledging no. “I know why we did it. We have a pattern we follow when we feel like we have extra money. We talk each other into buying things. We egg each other on. But I know if we had gotten into our car and driven away, we could have talked ourselves out of it.” I suggested she go back to The Debt Diet and read about The Purchasing Pause—a set of questions to ask yourself to make sure you really want to buy something before you do it. (Among them, do I need this? Where would I put it?) Another tactic that works: Write down how you’re feeling after you splurge. Then go back and read it as a reminder before you put yourself in a situation where it might happen again.
An Easy Fix. On the flipside (remember Erin talked about successes, too), she scored a big win. One Debt Diet exercise walks you through the easy-to-follow process of refinancing a car loan. With a phone call, Erin was able to refinance both of hers from 9.5% to around 4%. She’ll save $200 a month as a result.
I’ll be checking in with the participants, as I said, once a week or whenever they have questions. Then I’ll report back on their progress—good and bad. They’ll be blogging here as well. And if you have questions on The Debt Diet (or you need a boost) you can email me here as well and we’ll post some answers.
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Jean Chatzky An award-winning journalist and best-selling author, Jean Chatzky is making significant strides to help millions of men and women battle an epidemic with a devastating impact—debt. Jean is the financial editor for NBC’s Today Show, a contributing editor for More Magazine, a columnist for The New York Daily News, and a contributor to The Oprah Winfrey Show.
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