Are you a big spender? Watch this, feel better
By HELEN HUNTLEY
Published July 16, 2006
It may not be as exciting as watching Paris Hilton milk a cow, but the latest incarnation of reality TV offers some useful information on getting your financial life in order.
Big Spender, which premiered last week on A&E Television Network, is about people whose finances have careened out of control. Host Larry Winget, an author and motivational speaker who bills himself as "the pitbull of personal development," stars as the enforcer, getting spendthrift families to face reality and adopt "no more excuses" reform plans.
No matter how bad your finances might be, if you choose to watch, chances are good that you'll find yourself feeling superior in at least a few ways to the big spending family of the week. The show, filmed in South Florida by NorthSouth Productions, is shown at 5:30 p.m. Sundays on A&E.
Ana and Frank Amador, the 30-something stars of the first installment, were spending $6,620 a month while bringing in just $3,155 after he lost his job. They were making up the difference by spending the proceeds from the sale of their previous home and siphoning cash from their daughter's savings account. They even skipped their mortgage payment to finance a family vacation.
Winget, who favors fancy cowboy shirts and Dr. Phil-style tough love, pronounced the couple "on the brink of disaster." Then he made them sign a pledge to follow his plan.
I felt sorry for Ana and Frank when they were reduced to handing their checkbook over to relatives at Winget's insistence. But when they complained about giving up DirectTV and Ana whined "I need retail therapy," I was glad Winget was there to talk some sense into them.
Here are some other things Winget told them to do:
- Never delay your mortgage payment.
- Keep a daily spending journal so you know where your money is going.
- Get a job even if it doesn't pay much Frank was holding out for a high-paying offer.
- Sell that expensive vehicle whose payments you can't afford.
- Hold a yard sale to raise cash.
- Stop discretionary spending until your income and expenses are in balance.
While those steps might seem obvious to you, they apparently aren't to these couples.
"A lot really don't understand the magnitude of the situation," NorthSouth producer Jennifer Holbach said. "They've never sat down and done a budget. They're trying to live in this fantasy world and impress their friends and family."
How else can you explain Lourdes and James Allen, the couple featured in today's episode, who appeared prosperous but were $400,000 in debt (not counting their mortgage)?
Producer Holbach said only one couple has failed Winget's financial boot camp approach, which requires serious changes in just three weeks.
"They said they felt so constrained by the budget, they had to go out and spend more money," she said. "They were more in debt than when we came out."
Consumer Credit Counseling Service of Greater Atlanta, which has an office in West Palm Beach, did the behind-the-scenes work of analyzing the families' finances and recommending changes.Although this year's 13 episodes are being shot in South Florida, NorthSouth hopes to take production on the road next year. Families who want to volunteer can e-mail firstname.lastname@example.org.
I have a house in the Tampa Bay area worth about $224,000 and 10 acres in north Florida worth $100,000, both owned free and clear. I would like to build a house on the land and move there when I retire. What is the best way to raise the money to do this? I am 63.
A home equity loan on your Tampa Bay area property may be your best option. When you sell the house, you will pay off the loan and presumably have cash left over that you can invest to supplement your retirement income. A construction loan is another possibility.
Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, go to www.sptimes.com/blogs/money or write Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.