Thursday, January 10, 2008

Kudos to PF bloggers out there paying down debt

One of my favorite shows is Maxed Out. It’s a reality show. Usually it features a person/couple who is deep in debt and hasn’t a clue what to do and comes on the show for help.

The first part of the show is taking stock. The expert comes in and asks about the financial situation (i.e. income, expenses, debt etc.). Then she puts together a presentation of what the actual situation is. Usually the shock sets in.

Yesterday, this girl thought she had about $15K in debt when really she was about $30K in debt. She owed money on credit card, student loans, to her parents, and to her boyfriend. Worst thing is when the expert showed her a break down of her income and expenses, she had no idea that she had a monthly short fall of $450. How did she not know when 2 seconds before there was a clip of her asking her parents for money because she wasn’t going to make rent that month?

I think that is one of her worst mistakes – not being aware. By not being aware of her debt situation she’s less motivated to pay it down. It’s like keeping her head in the sand so she can tell herself it’s not so bad and she’ll get to it one day. By not being aware of her income and expenses, she’s freer on spending (over last 2 years she spent $10K on just her personal purchases) and gets herself deeper into debt.

This is why I think those PF bloggers out there who are actively monitoring their debts and diligently paying it down is way ahead of the game. Good on you guys. If you ever feel discouraged, watch Maxed Out and you’ll feel better.


PiggyBankBlues said...

i think that pf bloggers blogging about debt is one of the great benefits of the blogoshere. it creates this pocket online community of people encouraging each other towards financial goals, and making sure that we stay in check in the meantime. who knows, maybe a few join us in the process...