Lifehacker points to Oprah’s Debt Diet, which is a sensible approach to debt elimination and sound personal finance. The “diet” is divided into two phases of four steps each.
Short-Term
Within a month, you should be able to complete each of these four short-term goals, perhaps pursuing one task per week. These are steps that can be taken now to stop the bleeding and to begin the financial healing process.
- How much debt do you really have? List all of your debts and determine how much they are costing you.
- Track your spending. Discover those little leaks where you’re spending money daily. Start using this money to pay off debts instead.
- Learn to play the credit card game. Reduce your interest rates, pay more than the minimum, pay on time.
- Stop spending! Small changes can make a big difference — learn how to trick yourself into spending less.
Long-Term
These are ongoing tasks. If you stick with them, they can help you maintain solid financial health. Eventually, they’ll steer you toward your goals and dreams.
- Create a budget. Learn to stick to it. Use it to save.
- Grow your income. Sell your stuff. Get a second job. Do whatever it takes to get more money.
- Prioritize your debts. Oprah’s Debt Diet provides a sensible list of which debts to pay first.
- Understand your spending issues. Try to discover why you have trouble with money, and change the way you relate to it. Learn to save instead of spend!
Oprah has a wide reach and tremendous influence on her audience — it’s fanastic to see her pushing solid financial information.
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I recently researched ways to improve my FICO score, which is pretty good but not qualifying for the very best interest rates (I’ll need a car loan soon). Every article said that moving credit card debt around from card to card lowers your credit score. Isn’t this a no-win situation? They say it’s better to keep the accounts you have and pay them off . . .but I have high interest rates and not much luck in getting the companies to lower them, and definitely they won’t lower them to, say, single-digit rates. Any suggestions? (And thank you — I love this site.)
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[...] My favorite blog, Get Rich Slowly, was recently talking about Oprah’s Debt Diet. I find this interesting and coincidental- I am currently working on a sequence called “Money Management Bootcamp” that covers such topics as budgeting, paying bills, and paying down your debt. This is going to be the part of my website that’s “less blog” and “more content”. I think Oprah’s Debt Diet is a good step in the right direction but my Money Management Bootcamp is going to take it to the next level. I’m currently working on a calculator program that will analyze your debt and show you the best strategy to pay it off quickly. I hope to have the first articles of Money Management Bootcamp on the site in the next few days. [...]
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