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Battling Debt: From Big Challenges Come Big Changes

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Penny in Arkansas has read more books than she can remember about how to manage her money and get out of debt. None of them did much good. But as she talked about Jean Chatzky’s Debt Diet, tears started rolling down her face.

“Aw, now I’m crying about it,” said Penny, 52. “I read and read, but I don’t comprehend a lot of it, until now.”

For Melissa in Massachusetts, doing the Debt Diet has been emotional too, but in a different way. She had a burst of euphoria in the beginning, when she and her husband used vacation time to cut down on daycare bills. But now that they have little vacation time left and her two children are back in daycare, the reality that she’s still four years away from being debt-free has been hard to take.

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“It’s been painful,” Melissa says. “We’ve made a lot of progress, but it’s been an emotional roller coaster.”

A family’s debt is a lot more than just checkbooks and monthly statements. We go into debt to buy big-ticket items—homes, cars, education, clothes, vacations. These things are more than just things; taken together, they come to define much of our lives. It’s no wonder that changing our attitude toward debt often triggers larger emotional changes, too.

“In our society, debt is shameful. It shouldn’t be, but it is,” says Chatzky, who’s best known as the Today Show’s consumer finance editor. “It’s hard to acknowledge that you have it.”

This summer, Chatzky and Credit.com joined together to offer five consumers a very rare opportunity: Free participation in the Debt Diet (which normally costs $49.95 for one year of access), plus regular communication with Chatzky about how to incorporate the program’s lessons into their daily lives. One person chosen to be part of the challenge never showed up. Another tried participating for a few weeks, but then dropped out.

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For the three who stuck with it, however, the Debt Diet has been a revolutionary experience.

“It makes me so angry that I didn’t get know all this years ago,” Penny says. “But I thank God it happened now.”

The process of working together didn’t just change the three consumers involved. It also helped Chatzky see the strengths and weaknesses of her own program, and now she’s considering some big changes.

“I’ve been talking to one of our distributors about building a coaching program” into the Debt Diet, Chatzky says. “I think you need to find somebody in your life to talk about this process as you’re going through it.”

Mindfulness: The Key to Success

The Debt Diet has all kinds of tools to help people reduce their debts. And during the Debt Diet Challenge, participants got to talk regularly with Chatzky, one of the nation’s foremost authorities on debt and consumer finance.

But all three women who stuck with the program since July said the most useful tool was also the simplest: A document where they record every single thing they buy. Writing down every purchase forced them to actually pay attention to where their money was going, including all the silly little things they buy without paying attention.

“It’s a pattern of mindlessness,” says Chris, 57, who lives in Iowa. “It’s so easy to spend money without thinking about it.”

Melissa agrees.

“In your mind it’s like, ‘I’m not spending that much money,'” she says. “And then you add it up, and you see that actually you are.”

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Keeping a daily record of everything you buy isn’t hard, Chatzky says. Yet it’s one of the major stumbling blocks for many people trying to rein in debt. Why?

“It’s tedious,” Chatzky says. “There’s no rocket science, there’s no magic. But you have to do it consistently in order for it to work.”

After four months, Chris is the only participant who says she records every purchase every day. For her, the payoff is obvious.

“I have a lot of no-spend days now,” she says. “I don’t think I ever had those before, unless I was sick or hospitalized.”

Penny and Melissa both admit that they haven’t been as consistent. For Melissa the issue is time, as she tries to juggle a job, a marriage and two children. For Penny, it’s a simple matter of staying focused.

“I got away from it a little lately,” she says.

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For all three women, tracking their actual expenses helped them ferret out places where they’re spending money on things that don’t actually matter to them. Chris stopped buying DVDs and started renting them instead. Melissa ditched her subscriptions to Netflix and Weight Watchers, and stopped drinking so much coffee.

The small change that made the biggest difference? All three women cut way back on how often they eat in restaurants. By looking at their daily expenses, they were able to see how even seemingly inexpensive fast food was costing them lots of money because they were going more often than they realized.

“Tracking my daily expenses showed me we were eating out a lot, probably five times a week,” Penny says.  “It was nothing fancy, but it was costing about $20 a meal. So we cut back.”

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