Have you seen the CNBC reality TV show Til Debt Do Us Part? It focuses on helping couples who have accumulated significant debt start paying it down and take control of their financial lives. The show’s star, Gail Vaz-Oxlade, says she takes a tough love approach to helping couples get out of debt and on the road to financial recovery.
What I find most interesting about the show is that Gail analyzes each couples’ spending habits at the beginning of each episode and presents them with an analysis of what they’re spending each month. She also provides an eye-opening projection of how much their debt will grow over a five-year period if they maintain their current spending habits. Every couple is astounded at the results and claims to have no idea they were spending and accumulating debt at the rates Gail presents.
Why? Because no one is guarding the hen house.
What all of these couples have in common is a lack of communication about their finances and no household budget or spending plan in place. While they know they’re overspending, they are surprised to learn they are overspending by three or four times what they thought they were on a monthly basis. Some of these couples are spending several thousand more than they make each month, which has a devastating cumulative impact.
One of the first steps Gail Vaz-Oxlade takes is to require each couple to watch proactively over their money and spending. She helps couples establish a monthly household budget and spending plan to achieve three primary goals:
- Track expenses to determine how and where your money is really being spent each month. (This can be an illuminating experience, trust me!)
- Identify areas where you can cut back on spending.
- Redirect budget savings to start paying down debt, bolster emergency savings, and save more for retirement.
This is a great exercise whether you’re part of a couple or single. I encourage you to take a few minutes this week to take a close look at your spending habits and share your findings with us.
Were you spending more than you thought? Less? Did the exercise encourage you to be a better guardian of your own financial hen house and start paying down your debt?