There is a huge crisis in our society of overspending. Some sources estimate an average consumer debt of over $23, 000 per individual in the country. Many people are living above their means, buying essentials on credit, and not really owning a lot of what they
call their own.
In response, Oprah is currently airing a series of shows aimed at helping families get out of debt. She has enlisted three families to be part of her “debt diet.” They are working closely with some of the top financial experts in the country to cut debt. The truth is that nearly every one of us is in debt, and not just for our home. Consumer debt is a plague in our country that desperately needs to be diminished.
Oprah’s diet starts out with four steps, one for each week. The first step is to get real about the amount you actually owe. This involves sitting down, crunching some numbers, and totaling the debt that you have, along with the interest rates. Once you know the amount you really owe, then you can start working towards paying it off.
Oprah’s second step is to keep track of your spending, and learn to budget. This way, you can come up with extra money to use towards paying down your debt. David Bach, one of the debt diet advisors, coined a concept called the Latte Factor that people can use to pay down debt. He explains that a lot of us frivolously spend a few dollars here and there on things like coffee, cigarettes, fast food, or bottled water. Instead, if you put ten dollars a day towards paying off debt, you could put $3600 towards debt in one year.
Playing the credit card game is the third step. Basically, this step involves paying your credit card debt off in a smarter way, by getting lower interest rates, paying more than the minimums, and eventually paying credit cards off and getting rid of the accounts.
The last step is to simply spend less. The debt diet plan explains a lot of different ways to cut back on your expenses. A lot of these deal with being smart about credit cards, and only spending with cash or checks.
In my opinion, Oprah is doing a great service in offering this information to the general public. If you are interested in joining Oprah’s debt diet, click here to go to her website. On the website you will see her detailed explanation of the first four steps, along with a contract to sign as you begin this plan. I say, go for it, whether the debt you have is large or small. Imagine what a relief it will be once you are finished, and you are completely debt free.