Managing Debt

The Debt Diet Challenge Week #2: Shedding Debt, Losing Weight

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The Debt Diet is an online behavioral change program to help users get out of debt by putting aside $10 a day.  It was developed by Pro-Change Behavior Systems and Jean Chatzky, author of the best-selling Pay It Down and a coach on The Debt Diet series on the Oprah show.

Jean Chatzky read the applications solicited by Credit.com and chose 5 participants.  She got them started on The Debt Diet and is now speaking to them once a week, answering their questions and helping them to get off to a good start.  For their part, our participants are doing The Debt Diet exercises which include tracking their spending, negotiating monthly bills (using The Debt Diet scripts) and trying to modify their heavy-spending ways.  You can find The Debt Diet ($49.95) at jeanchatzky.com. The participants also blog regularly on Credit.com about their experiences with The Debt Diet.

Debt Dieting, it seems, is good for your waistline as well as your wallet.

I first noticed this phenomenon when I coached the Debt Diet for The Oprah Winfrey Show. Some of the participants not only seemed to be getting their financial acts together, they seemed to be getting their physical ones together, too. I’m seeing the same with this round of Dieters.

Erin reports that she’s been using the elliptical trainer she and her husband bought the first weekend they were on the program. (It may help that it was pricey—in her mind, she’s amortizing. It may also help that it’s so high-tech her husband, while away on business, can connect to the machine to see how much use it’s actually gotten. That’s motivating!) And Chris said, “I’ve actually lost weight—that’s been a benefit.”

[Related article: Jean Chatzky's Debt Diet: A Behind the Scenes Look]

What’s up with this phenomenon? In part, it’s a result of tracking your spending. Just like logging what you eat (a move Good Housekeeping magazine once called the secret weapon in the weight loss war) tracking your spending makes you more conscious of all the money you spend. And many of us spend a lot more than we would ever think eating out. Seeing the tallies is all it takes for many people to get them to start eating at home. And eating at home—particularly when you grocery shop for the week— is generally much cheaper.

But there’s also a growing body of research that shows making progress in one segment of your like (i.e. with your money) can give you the skills and the boost you need to improve in another part (i.e. physically). Once you learn how to resist one kind of temptation—to convince yourself to walk away from the new iPod or new shoes—you also have the skills to walk away from the cookie. That’s not to say it’s the easiest thing in the world (or that change happens instantaneously—I’m ready for the Debt Dieters to tell me they had a bad day or week). As Dr. Jim Prochaska of Pro-Change Behavior Systems, my partner in devloping the Debt Diet likes to say, “Change is not an event, it’s a process.”

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Here are a couple of highlights from the week:

Penny found a way to pick up some extra cash. In Penny’s part of the country—like so many others—the business of selling houses is moving like molasses. I’d suggested to Penny since that seemed unlikely to change soon, she might want to look for other ways to bring in some extra income. (You have to remember there are two sides to the equation. You can pay down debt by spending less to free up cash. Or you can do it by just making more money. Tough in this economy, but not impossible.) Penny applied for part-time jobs at Wal-Mart and her local bank. Then she got a call from a firm conducting auctions of homes in foreclosure. They needed some help at an open house. Penny picked up $200 in an afternoon. “I hope there’s more where that came from,” she says.

Chris saved $768 with a single phone call. How? She called her cable company and told them she was prepared to switch to a package with a competitor. “I know if I do that, you’ll call me and offer me promotional pricing to get me back,” she said. “So why not just give me the promo pricing now?” They didn’t even blink—and she’s now saving $64.73 a month.

Lastly, I’m a little worried about Kim. She’s missing phone calls and not filing blog posts. Kim—if you’re out there…I’m here for you!

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