Here’s a riddle for you. How is debt elimination like a diet? If you’ve ever tried either one, the answer should be obvious. There are many parallels, starting with the fact that both are frequently on New Year’s resolution lists. Here we are a couple of weeks past the holidays, and the credit card bills are coming in. If you’ve looked at the scales lately, you may find that your holiday treat overindulgence has come home to roost also. So here you are, with five extra pounds and who knows how much extra debt. How are you going to get rid of them? I’m of the opinion that diets don’t work. What I mean is the kind where you have to count…calories, grams, exchanges, anything. Of course they work for some of the people some of the time. But for most of the people most of the time, the benefits don’t last. That’s because diets are based on deprivation. Eat less of what you like, which of course is what you really want to eat, right? Even my favorite, Eight Minutes in the Morning, requires more discipline and will-power than I have most of the time. The minute I resolve to go on a diet, I begin to crave the very things that I shouldn't have. What I need is a whole makeover in the eating department, coupled with an eating plan that allows me to have my fill of delicious food, including some of my favorites and something sweet now and again. I’ve just ordered a cookbook from Rodale books that promises just that. I’ll report back when it arrives. But for now, let’s talk about money. Let’s say that five pounds of holiday fat I need to eliminate is analogous to $500 in new debt. I’d guess that’s low for most Americans. You can easily spend that outfitting one teenager with the snowboard and gear he wanted for Christmas. If the gift was a big flat-screen TV for the family, there’s an extra $3000 or so. OK, like the pumpkin pie you ate by yourself, what’s done is done. Now what are we going to do about it? If you are fortunate enough to have no other debt, it should be a piece of cake. Oops, pardon the reference to food! We’re on a diet, remember? How many of us, though, have no other debt? According to the Federal Reserve, credit card debt hit $1.98 trillion in 2003. I guarantee it hasn’t gone down since then. In June of last year, savings in the US hit a net of zero! Survival debt…paying your day-to-day expenses with credit cards…is on the rise. But you know all this. 90 million of us can’t pay the entire balance on our credit cards each month, and 30 million are only paying the minimum. It’s shocking, that’s true. We know we should be getting out of debt, so why don’t we? For many, it’s a matter of too little income to meet basic needs. But for most, I think it’s the same reason we don’t lose weight. Most of all, we are reluctant to contemplate months or years of what we view as deprivation. I have a confession to make. I still have some consumer debt, which I’m paying off at a reasonable rate. Why isn’t it gone, when I abhor debt so much? Because my husband and I felt it was important to reward ourselves for several years of working at it with a nice vacation this year. It set the final payoff back by about six months, but we thought it was worth it. The fact that we aren't paying interest on the debt helped the decision, but that's another thread. This reasoning was similar to the reason a smart dieter gives herself a treat when she has lost a few pounds...to stay motivated to continue. Something sweet now and again, or a trip to the spa. So, here’s a thought. Why not set a goal to pay off a certain amount of debt and then have a reward? It needn’t be a big-ticket item like a vacation or an expensive gadget. It just needs to be special. Are you economizing by having all your meals at home? Why not eat a nice meal out when you’ve eliminated a few hundred dollars’ worth of debt? (Only if you can do so without adding more debt, of course.) If you plan for it, it becomes an added incentive. Hmmm, do I seem obsessed with food? OK, make it a night out at the movies. One other thing I’d recommend, and we have done this for years, no matter what the financial picture has been. Through lean times and plenty, everyone needs to have a bit of money that they don’t have to account for to a spouse or anyone else. An allowance, if you will. Again, it doesn’t need to be a lot, especially if you are having trouble meeting basic needs. My husband hoards his lunch money, and I have learned to relax about it being used for something other than what I planned it for in the budget. If he wants to go without lunch to buy CDs, he gets to do that. He’s an adult and can make his own decisions. We each get spending money—not much, but it’s ours to do with as we will and answer to no one for it. I firmly believe that’s one reason we have managed to discipline ourselves in the big picture for so many years. It's easier to do without new furniture or a new car if you can enjoy something smaller that you really want...for me it's a massage or a new book. I have to save my spending money for two paydays to get a massage, so it's a really special treat. That last few hundred dollars of debt will finally be gone by this spring. Now if only I could say the same for the five pounds! Cheri

Cheri, Thanks for inviting me to your forum. This is a topic we should all benefit from. You are so right, getting out of debt and losing weight are both tough. I have never been very good with money. If I wanted something, I would get it and then figure a way to pay for it. Not a good thing to do. For years I was in the Financial Services business and coached others on making a Financial Gameplan. I helped them get out of debt. My trouble is that I can teach it, but not very good at practicing what I preach. Now, we are working on developing new habits. If we don't have the money, we just don't buy it. But we work hard, earn the money, then buy. The other trick is learning to save. :( Thanks for the great teaching. You are the best.

Hello, Cheri! Great advice! Don't forget pocket change. Every night both Jeff and I empty our pockets and put the loose change in a gallon water jug (sturdy, reusable one) and in no time at all, about 3 months, $60 to $100 is in each of our change jugs. I did not realize how much money was laying around the house until we started putting the change in the jugs consistently. I do not use credit cards because they are an evil trap, but there is no money tap and I face much the same problems as anyone else. And those responsibilities must be met. I'll be glad when the truck is paid off in 5 months and since I'm not the sort to run out and go buy another, that money will be well appreciated. And, yes, I am going to go out to dinner the month after the last truck payment is made. Thanks for your article, Kate

Debt is an odd thing isn't it? Banks love people who are in debt. That's exactly where they want to keep you. I would even go as far to say that if you are not in debt, banks don't want anything to do with you. I think one of the greatest things we can do for ourselves is to get a financial education. Not one taught by an educational institute but one taught by real life. If I might make a small recommendation to help get someone started in doing that, go to your local book store and pick up a copy of "Rich Dad, Poor Dad" by Robert Kiyosaki. He doesn't give you all the answers, but he certainly helps to open your mind to this area.

Thanks Chari, Great topic, To a some extent we have the political Bozos in Washington who are supposed to watching out for the common persons interest to thank for these problems. The financial serivces industry is one of the largest political donors and the poliitcians have their hands in its pocket up to their elbows. Recent results include a repeal of the usurary limits which kept financial institutions from raping the public on interest, particularly those with too little education to understand and those who can't afford to pay it. Then last year, the bankruptcy laws were changed to make it much more difficult for our good citizens to get relief from this crime. You probably noticed that the new law continued to allow corporations to use the code to shed pension obligations to retired workers who devoted theri entire working lives to them. The only real answer in the long run is to educate people as you have done so well here. People also need to understand that allowing Hollywood and Madison Avenue to set our values is like letting the fox loose in the chicken house. And last, the whole system of campaign finance that we have today should be made a crime. Public financing is the only way to go. I encourge all readers to contact their representatives and let them know how strongly we as a people feel about this. OTHERWISE NOTHING WILL CHANGE. The victimization by corporate interests of the good souls who call themselves average Americans wiil continue to escalate.