TABLE OF CONTENTS
SECTION ONE: THINKING THIN
Chapter One: The Debt Diet
Do You Have a Mild, Moderate, or Mongo Weight Problem?
Fiscal Fitness Workout-Top Ten ‘‘Money Moves’’ Quiz
Chapter Two: A Long Line of Big Spenders
Why Do You Do That Thing You Do?
Fiscal Fitness Workout- ‘‘Are You Better or Worse Off Than Your Parents?’’
Chapter Three: I Would Be Happy If I Were Rich and Thin
Our Attitude About Money
Fiscal Fitness Workout- Money Attitude Quiz
Chapter Four: Beauty and the Beast Revisited
Plastic Problems: Real Solutions
Fiscal Fitness Workout-Tips From a Beauty
SECTION TWO: FISCAL FITNESS
Chapter Five: The Celebrity Diet
How to Become a Millionaire
Fiscal Fitness Workout- The ‘‘Sharing’’ Challenge
Chapter Six: New Health Trends
The FICO Approach to Fiscal Fitness
Fiscal Fitness Workout- How to Have Your Piece of the Pie
Chapter Seven: The Sixty-Minute Money Workout
A Guide to a Fight-Free Zone for Couples
Fiscal Fitness Workout- The One-Hour Money Workout
Chapter Eight: Savings Factors
Three Major Ways to Drop Debt and Beef Up on Cash
Fiscal Fitness Workout- House Maintenance Checklist
SECTION THREE: FOREVER FREE
Chapter Nine: The Personal Trainer Gets Personal
Getting the Right Kind of Help When You Need It
Fiscal Fitness Workout- ‘‘Do I Need a Financial Advisor?’’ Quiz
Chapter Ten: Raising Fiscally Fit Kids
Ten Things Your Child Should Know About Money
Fiscal Fitness Workout- Fiscal Report Card
Chapter Eleven: College Crunches
How to Help Your Kids and Still Keep Your Future
Fiscal Fitness Workout- Surf Your Way to College Savings
Chapter Twelve: Visiting the Spa
The ‘‘Treat’’ of Shopping to Share
Fiscal Fitness Workout- Setting Goals for Savings
Appendix A: Recommended Resources
Appendix B: Glossary of Terms
Getting out of debt is like going on a diet. What do you do if you want to lose weight? You eat less and exercise more. This sounds simple, but most of us know it sure isn’t easy. We wish there were another answer, an easier, less painful answer. But there isn’t. Most experts agree: Diet and exercise are the only things that really work. The way to get out of debt is much the same—the only thing that really works is to spend less and save more.
One of the amazing discoveries I made in writing The Debt Diet was that the same disciplines that are required to achieve physical health are required for financial health as well. And just as there is always a “new” diet breakthrough, there is usually also something new to be learned when it comes to finances. But beware of “fads” and so-called “quick fixes.”
Sure, there are always “new” and “improved” ways of looking at money. You can sign on with a for-profit financial counselor who promises the moon. You can try to win the lottery. Or fall prey to a get-rich-quick scheme. But if you spend more than you make, you’re still going to be in debt. And you won’t be there alone.
Research by the Federal Reserve indicates: “Household debt is at a record high relative to disposable income. Some analysts are concerned that this unprecedented level might pose a risk to the financial health of American households.” Is debt putting your household—your marriage—at risk?
In his bestselling book Debt-Free Living, Larry Burkett says, “It is interesting that the increase in the American divorce rate can be tracked on a curve matching the growth of debt in this country.” Debt doesn’t benefit a marriage or a family and it certainly doesn’t benefit your future. Just as being overweight leads to health and emotional concerns, so debt has its consequences as well. You may want to consider the following:
• Debt puts your marriage at risk.
• Debt makes you a servant to the lender.
• Debt borrows from your future.
• Debt hinders sharing with others.
• Debt erodes resources through high-interest payments.
On the other hand, if you have a low debt load, you will experience many benefits. You will have the ability to give generously in order to meet the financial needs of others. You and your spouse will argue less over money. You will not be anxious over floating bills to pay minimums. You can confidently answer your phone instead of using your answering machine to screen calls from creditors. And you will avoid the stigma and burden of bankruptcy.
Getting out of debt may be easier than you think, even for major debt, such as a mortgage. Sometimes we quit before we start because the task seems far too great. If you have to lose fifty pounds, you concentrate on the first five pounds, not the entire amount!
Bob and I have experienced the incredible miracle of overcoming seemingly insurmountable debt. When we got married, we had $40,000 in consumer debt. Like many young people, we didn’t realize the price we would pay for instant gratification.
We decided to get out of debt and made immediate changes in our lifestyle to accomplish this. Within two and a half years we were debt free, and we haven’t looked back since.
I hope this book will help you on your own journey toward financial freedom and that you too will “never look back” as you work toward a checkbook that is at least as buff as the rest of you.
A Guide to a Fight-Free Zone for Couples
“When choosing between two evils, I always like to try the one I’ve never tried before.” —Mae West
Some couples may feel like Mae West when it comes to the idea of a “discussion” of money matters. Justin and Betty, a couple I counseled, said, “We would either fight over money or let the tension simmer under the surface while we carefully avoided the topic.” Lenn Furrow, a counselor friend who works for a major government family support center, said, “Most couples would rather discuss problems in their sex life than discuss their finances.”
David Berky, a writer for a wonderful Web site called SimpleJoe.com, said, “It has been estimated that half of all divorces occur to some degree because of disagreements over money and finances.” The statistics agree with Berky’s assessment. “Money problems” are cited as the primary reason for divorce in 51% of the cases.
But as odd as it sounds, conflicts over money are not always about money, according to Jack Otter, with SmartMoney magazine. A new survey conducted by both SmartMoney and Redbook magazines shows that money is really a control issue between couples. Otter says, “It’s not just what you’re buying, but it’s who gets to decide what you’re buying.” Here are some of the results of the survey, taken from “Investing in America: Spending Survey” (for the complete results, go to money.know-more.com/ MONEY):
Amnesia and Price Tags
Many couples don’t come clean about their spending, and even those that are honest aren’t always completely honest about exactly how much they spend. Some 36% of men admit to fudging on the price of an item while 40% of women claim the item cost less than it actually did.
Perhaps the most emotional and divisive arguments tend to occur in blended families with children from a previous marriage. Since that group represents such a large number of people, let’s take a closer look. According to Otter, “The issues of how to handle the finances from the children of their previous marriage were hard to resolve because they already had a routine with their children.” There is also the added factor of child support, legal expenses, and other monetary issues that magnify the money problems found in blended families.
One Checkbook or Two?
The majority of couples keep joint accounts, but 14% keep all accounts separate, while 18% have both joint and separate accounts.
Timing Is Everything
This fascinating survey indicated that most couples discussed their finances under the worst possible conditions—when they were tense and frustrated. It’s no huge surprise to realize that most of these “discussions” (we call them fights at our house) were not resolved in a satisfactory manner.
These survey results are not surprising or revelatory, but they are worth looking at. In fact, they are the main reason I developed the “Sixty-Minute Money Workout,” so that you can have a purposeful time discussing money and an effective tool to maximize the discussion without fighting or wishing you were having a root canal rather than a discussion about money.
Here’s a mini-quiz to see if you are a candidate for the “The Sixty-Minute Money Workout” approach to finances:
1. Are money arguments the No. 1 cause of disagreements in your home?
2. Do you seem to disagree more than you agree on your finances?
3. Do you instantly feel tension over the mere thought of talking money issues with your mate?
4. Do you seem to misunderstand the majority of the financial principles involved in household finances? Does your mate?
5. Would you say that either you or your mate tend to behave selfishly (either regularly or frequently) when it comes to money?
6. Would you rather your mate understand your perspective on money rather than understanding your mate first?
7. Do you think that winning the lottery, inheriting a small fortune, or getting a dream job with a dream salary would solve your financial problems?
8. Do you have trouble expressing financial goals?
9. Do you have enough patience to have a complete and honest discussion about finances?
10. Would you rather baby-sit teething triplets with a stomach virus than discuss finances?
If you answered yes to two or more of these questions, you are a prime candidate to greatly improve your marriage by improving your ability to discuss money issues. This workout is very much like the physical workout you have at the gym or when you hit the treadmill at “Home Sweet Home.” Well, it can be sweet, if you follow my workout! When it comes to exercise, you’re not going to be able to run a marathon after your first workout or enter a “Mr. Universe” contest after lifting a 100-pound barbell for ten reps and two sets! But if you’ve ever gotten into the habit of getting fit, then you know that over the course of a few months, you begin to feel stronger (and look smashing)! The same is true of the money workout—you’ll get hooked on the payoffs (literally!) of your hard work and be ready to leave your bad spending habits in the dust.
The Debt Diet by Ellie Kay
Copyright © 2004 ; ISBN 0764200011
Reprinted with permission from Bethany House Publishers. Unauthorized duplication prohibited.