Thursday, January 22, 2009

I Don't Want to Be a PF Biggest Loser

Debt is analogous to weight: It’s quick and easy to pack on, but is excruciatingly slow and difficult to eliminate. Additionally, with temptation abound, sliding from healthy habits is way too easy.

I recently read this article on AOL about the 3rd season Biggest Loser champ, Erik Chopin, who lost 214 lbs only to gain back half of it once the show ended.

Why am I not surprised? I’ve only watched a couple episodes but I recall thinking that the participants' transformations were so unrealistic that they were destined to fail once the show is over. Looks like I was right.

Thusly, I’ve concluded that I don’t want to be the PF equivalent of the “Biggest Loser”. So how can I avoid becoming a PF Biggest Loser?

1. Be Motivated For the Right Reasons
The AOL article states:
Weighing in close to 300 pounds, Chopin says once he stopped getting attention from the show, he fell into depression and stopped exercising.
I suspect Mr. Chopin initially wanted to improve his health, but sometime during filiming, the emotional highs of being a TV celebrity replaced (or surpassed) that motivation. Once that celebrity faded, he lost his way.

In my case, I only seem to be motivated by anger or disappointment rather than an innate desire to improve myself. For example, I wasn’t motivated to improve my pathetic financial state until American Express rejected me for a credit card. And I’ve only recently become motivated to speed up my credit card payments when Chase unilaterally changed the terms of my debt repayment.

A fickle or passing emotion is never a good foundation upon which to establish healthy habits, financial or otherwise. I need to learn to do the right thing for my own sake.

2. Debt Elimination and Weight Loss Are Long Term
On the Oprah Show, Mr. Chopin says, "When you're going on that kind of a journey [on The Biggest Loser], there's a finish line... Beyond the finish line, I'd heard from so many people maintenance is the hardest thing. [I used to think], 'Try losing 200 pounds.' But maintenance really is a lifetime."

Similarly, I think many people implement an unrealistically Spartan and stringent debt elimination regimen that probably can't be sustained for the long term (think Dave Ramsey's "gazelle intensity"). It's easy to slide back to old (bad) habits when you feel deprived during the process.

That's why I think it's more important to develop realistic and moderate plans that can be incorporated into your normal lifestyle. I know I lack "gazelle intensity" but that's okay. I'd rather have a slow, steady plan that I know I'm capable of accomplishing than one that may cause me to regress.

3. Life Happens - Be Prepared to Deal with It
At some point, things happen that are out of our control, causing us to spend/eat more than we planned. Often times, binges come about due to lack of planning and preparation.

A while back, a commenter to one of my posts made the following remark:

“$12,500 in credit card debt is not [Shtinkykat’s] problem nor is the car loan. The problem is [her] $100k student loans. … And btw stop 'saving' and start paying off that … debt. Your savings is pointless if you continue to have a large debt.”

I’ve continued to struggle with whether to stop saving and to dedicate all of my paycheck minus monthly expenses towards eliminating debt.

The commenter definitely makes a good point. For instance, in 2006, I stopped contributing to my 401k while I struggled to get my monthly expenses below my monthly income. As I previously stated, this was the smartest move I made, since I stopped contributing at the height of the stock market bubble. Secondly, I also recognize that paying off debts provide guaranteed returns, as opposed to the stock market, where I have to take risks to get some returns.

But we all know emergencies don't come about neatly one at a time. When you don't have a security net or an emergency fund, it's easy to get right back into debt.

Now that my monthly expenses are within my monthly income, I’ve started contributing to my 401k again and I’ve been putting a little bit of money aside into my savings every month. I may not be eliminating my debt as quickly as the folks on Biggest Loser shed their weight, but I'm not regaining my debt either since I have the fund to pay off most emergencies.

4. Have An Ongoing Support Network
I suspect the biggest problem for the folks on the Biggest Loser after the show ends is that their support group of professional fitness trainers and dieticians disappear. It's important to have an ongoing network of people who will support, encourage and provide guidance and useful tips.

Normally, that support group should be the family. For example, Ambercouric from Becoming Debt Free in 2009 dealt with her husband's pay cut by asking her entire family (including kids) to provide input as to what gets cut from the family budget. By getting her family involved, this becomes a group effort and the entire family is in it together.

For me, the PF blogging community has been my support group. I haven't been able to confess my debts to any of my friends or family members so I air my frustrations and jubilations on my blog. And for that, thank you all. You've been great. With your help, hopefully, I won't be a PF Biggest Loser!


Miss M said...

As I've written I actually still struggle with spending money, I can't stop saving now! Some day we'll hopefully all find balance. As for the comment about only focusing on debt, I also wrote about doing both and how it was the right choice for me. I think by getting yourself in the habit of saving now, you help protect against the dreaded debt monster. Even if I start spending more, I save so much, my budget will still be in balance. I like my savings, I'm proud of them, and that helps keep me within my means.

Ms. MoneyChat said...

Right on, you shall not be a PF loser. In my opinion, the key word in personal finance is personal. There are so many different ways to deal with our finances that I think part of the success if finding what fits you best. We're here for you kiddo;-).

Sharon Rose said...

Hi there-what a fabulous post my dear!! A real good read and you have a real good approach to tackling the debt payments too. Its great to be part of the PF blogging community, we just need to motivate and encourage each other!!

Debtfree2009 said...

Thanks for linking to me.

I struggle all the time with savings vs. debt vs. living vs. whatever is happening at the moment. Ms. MoneyChat is right it is PERSONAL and each of us will go about it slightly different.

We are all here routing you on. We will be here as you reach each goal, pass each goal, and make new goals.

Sallie's Niece said...

Call me biased because I also have over $100k in student loans but I don't think you should stop saving just to pay off debt. Saving protects you for the future and lets you live your life without getting into more debt.

paranoidasteroid said...

I really like this post. For me, I think of growing savings as sort of building muscle mass. Your problem may be your excess weight (debt), but the muscle mass is going to help.

Luckily, maintaining good finances is easier than maintaining a weight.

Just think about your opera ticket as a treat for good behavior.

RTC said...

I like your reasoning, especially on #2--the long term strategy. That is what I want to develop as I get debt free--a plan for the long term, so that I don't end up back in debt. Thanks for the insight!

DogAteMyFinances said...

This is really a great post, I've been thinking about it for a while.

I believe (JMO) that level of obesity permanently changes your body, that he will always feel hungry, that he will always need the Biggest Loser-extreme, probably unhealthy, lifestyle to be healthy weight.

However, I believe we can change our financial decisions, at least enough to make change. We don't have to live at the extremes of Biggest Loser to succeed, at least in money.

Some of the blogs do, beating themselves up over the (financial) cost of a candy bar. Me, I just try to keep going in the right direction.

jpkittie said...

yippee! with all of the support you have around you , you should be just fine ;)

Escape Brooklyn said...

I'm with Sallie's Niece. My student loan debt is at such a low interest rate (3.25%) that it makes no sense to stop all other saving just to pay that off. Especially considering the interest is tax deductible!

High interest credit card debt is another story, of course.

K-money said...

One of the ways that works to keep me saving is that I do something that prevents me from feeling deprived. If I can afford to eat out a few times a week then I feel rich and it is easy to say no to other purchases. Others may feel rich if they give to charity or buy a new clothing item once a month. Just like with dieting, part of maintaining is letting yourself live a little.

The PF blogging community is enormously helpful in keeping me interested in saving.

Fit Wallet said...

It's so easy to fall back into old habits. I lost 25lbs last year and have gained half of it back, so I can't judge Eric!

I'm not sure why, but budgeting and debt repayment has been much easier for me to stick with than a fitness regimen. Maybe that's because hitting a "submit payment" button doesn't take as much commitment as a 30 minute workout, heh.

T.W. said...

I also save while I pay off my debt. I realize that by saving the money I may have to pay a few extra dollars in interest.

However, I feel that the psychological momentum you gain by watching your savings account grow is worth these few extra dollars.

Many financial advisers recommend building an emergency fund even before you begin aggressively paying down your debt. If you lose your job, you still need to have enough in the EF to make the debt payments.

Also, consider if your student loan interest is tax deductible. In some situations, it makes sense to take as long as possible to pay down your student debt while focusing on other goals like saving for a down payment, contributing to retirement savings, etc.

Slinky said...

I agree! I CAN do gazelle intensity, but it's much better to make changes that you can live with and to live in a way that makes you happy. I'm perfectly comfortable and happy living on what I do, which isn't a whole lot.

I too save while repaying debt. Something that people often forget to factor into priorities is time. I may not be fully funding my retirement accounts, but by starting now....I probably don't need to! Debt is an awful thing, but life doesn't stop while you pay it off either.