The CNBC television show, Til Debt Do Us Part, features renowned financial expert, Gail Vaz-Oxlade helping couples get out of debt and manage their money better. The financial author and columnist comes into their home to dissect their current financial situation.
I love this show, and I’ve learned a lot about money. If you’re looking to get out of debt or simply have a better control on your money, you should give it a try. Here’s how it works.
Find the Problem
The show always starts out with explaining what the problem is and how people got into debt. There are many different reasons why these couples are in debt and need the help of Gail. Here are some of the common reasons why people are in debt and why you might be in debt too:
- They don’t know how much they’re spending.
Most of the time, people think they spend far less than what they actually are spending every month. Little stops to the store and a quick visit to the drive thru often gets overlooked.
- They don’t know how much they’re earning.
Surprisingly, many people don’t know how much they are earning. They may not realize how much they are getting after taxes and just assume they’re making more. This is especially true for people who work on a freelance basis or another form of unsteady work.
- They’re not earning enough.
Simply put, many people are not earning enough to cover their bills. So instead of making a change, they are putting things on credit cards or taking out loans. Besides having a low income, this is also caused by one partner not working for one reason or another. It also happens when one or both of the partners work in a job that does not generate a steady stream of income and what they make fluctuates every month.
- They spend more than they earn.
Regardless of how much people are earning, many on the show spend far more than they make. They may not realize it because they are putting things on credit.
Dissect the Finances
Once the problems are identified, Gail goes through their finances. Many times people don’t even realize what the issue is until they see it. Here are some common problems:
- Housing costs are too high.
They may have bitten off more than they could chew with expensive housing. Gail often suggests they downsize to live a more manageable life.
- They don’t know what their debt is.
Often at this stage of the process, people are surprised to learn they owe much more than they thought. They may have been avoiding knowing the truth or simply thought they owed less.
- They don’t understand interest.
A lot of times, people are shelling out hundreds towards debt repayment each month. But, because they are making minimum payments, they don’t realize they are not even making a dent in this debt. So they are essentially on this merry-go-round of debt that is not going to stop unless they start making larger payments every month.
Take Life Lesson Challenges
Once Gail has identified what the couple’s problem is and really understood their finances, she gives them three life challenges. These are meant to teach the couple about their debt and encourage them to change how they’re living. Here are examples of these life lesson challenges. If you’re in debt or trying to get a better handle on your finances, you can try them yourself.
- Create a budget.
Every couple is asked to create a realistic budget. To do this, they first figure out what they’re actually making. Then, they have to write down every bill they have including rent, phone, cable, tuition, medical expenses, food, transportation costs, and so on. They also need to include a debt repayment plan. This means that they can’t simply put the minimum payments down as their budget. They need to be paying more towards their debt so it starts to disappear.
- Make the budget work.
Sometimes making the budget isn’t so easy. Many times people need to find a way to make it work. They may need to find a way to cut what they are spending every month. This includes reducing on what they’re spending on wants and finding creative ways to save on food, transportation, and bills.
- Start spending less.
Depending on what the couple spends their money on, Gail usually comes up with a unique challenge to encourage them to spend less. For example, if a couple throws lavish parties and overspends, she may ask them to have a party for a group of friends with $40. If they spend a lot on toys and activities for their kids, she may challenge them to find free things to do in their area or use what they have. A common problem for couples is they spend way too much on going out to restaurants, buying fast food, and other types of entertainment. In this case, she may ask that they learn how to cook or find cheap activities to do as a couple as opposed to spending money.
- Start working together.
Unfortunately, many times the couples featured on the show aren’t in a good place in their relationship. Many times one person blames the other for the debt or they may argue about money and what to be spending the money on. Also, in several circumstances, there is a lot of deception and lies about the money. One person may be misleading the other about the finances and not sharing how much they are really spending. There are various challenges that help them start working together and communicating with each other better. They realize they need to be open and honest with each other and face their debt together instead of running away from it. The challenges prove that things go much smoother when you are able to work as a team.
What are your thoughts on Til Debt Do Us Part? What are your favorite shows that deal with finances?