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| Saturday, January 20, 2007 |
| 20/20 Debt Special |
As I mentioned the other day ABC's 20/20 ran a show called: Flat Broke: Begging and Borrowing in America. I did watch most of it last night (fell asleep during the last few moments - hate when that happens!) The show spent a lot of time with an overspending family - The Petersons. You can read the details of the financial mess they are in and how they got there in this article: Digging out of Debt
What the article doesn't mention, but which the camera clearly showed - their 4,000 square foot home is looking a bit rough around the edges. Torn screens in the windows (no money to fix it). A scruffy looking lawn (they have three or four dogs) and I assume no money or energy to deal with it. The pool was algae green - they can't swim in it. They can't afford to maintain their largest asset.
Robert Pagliarini, author of The Six-Day Financial Makeover had some harsh but necessary advice for the couple:Pagliarini devised a six-month action plan to rescue the Petersons from economic ruin. First, he advised them to dump their expensive time shares, even though this will mean the Petersons will lose $46,000 on their investment.
Pagliarini hopes they can recoup some of those losses by also selling their home and their second rental property. He believes those transactions will net the Petersons about $113,000.
Pagliarini then wants the Petersons to use that money to pay off their $60,000 credit card debts. If they take all of these steps, Pagliarini believes, the Petersons will actually have a few thousand dollars leftover to save and invest.
The catch? It's an all or nothing proposition. "Do all the big things or do none of them, because if you just do one, two or three, it's not going to work," said Pagliarini. Another family mentioned in the show - The Economides - who call themselves America's Cheapest Family, illustrated how a family of seven could live on $30,000 a year - own a home - and have no consummer debt (and no credit cards). They also have a book out: America's Cheapest Family Gets You Right on the Money: Your Guide to Living Better, Spending Less, and Cashing in on Your Dreams |
| posted by Boston Gal @ 11:52 AM *
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| 5 Comments: |
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As much as I love these getting out of debt stories, especially as I work towards that path myself, I just have a hard time feeling sorry for these people. They took 3 vacations last year alone! They have 2 houses, timeshares, etc. I don't doubt that they are struggling, but I can't feel all that sympathetic towards them as they just keep accumulating stuff & buying extravagant things they can't afford.
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I was surprised that the advisor didn't recommend that the wife get a job. Her kids are in school most of the day. She could contribute to the bottom line rather than being an expensive cost center.
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This story made me *physically* ill. I haven't taken 3 vacations in the past 5 years, and certainly not to Hawaii. These people are going to declare bankruptcy, and I will pay for those vacations.
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i worked with that guy i the 90's! (mr. peterson)
did anyone else notice the $ worries taking a toll on the wife's face? she had a permanent look of constant worry (& lack of sleep) despite what appeared to be denial in actions.
and yeah, did not feel sorry for them. if they did all suggested they would be $3000 on the plus side! not too shabby considering so many mistakes over such a long time (years).
the wife getting a job is a great suggestion, anon. i didn't think of that either. maybe b/c of all the other obvious things distracting me!!!
~ib
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oh, i had to add, she started TWO different scrapbook stores?!?!?! give me a break! had to go and do it twice, no less! i couldn't believe it.
~ib
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As much as I love these getting out of debt stories, especially as I work towards that path myself, I just have a hard time feeling sorry for these people. They took 3 vacations last year alone! They have 2 houses, timeshares, etc. I don't doubt that they are struggling, but I can't feel all that sympathetic towards them as they just keep accumulating stuff & buying extravagant things they can't afford.