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Oprah’s Great American Debt Diet – The Spending Plan
By JLP | August 4, 2006
I meant to write about this a couple of weeks ago when Oprah had her Great American Debt Diet Series but forgot about it until I was cleaning off my desk today. Anyway, here’s the spending plan that they recommend (the percentages are based on net or take-home pay):
Here’s a link to a printable PDF of the graphic if you are interested.
These numbers look acceptable to me. I would like to see savings at 15%, which I suppose they could be by the time you factor in tax savings on contributions to a 401(k) plan. I also like the way everything is broken down:
Housing – 35%
-Mortgage/Rent
-Repairs
-Taxes
-Utilities
-Insurance
Other Living Expenses – 25%
-Eating Out
-Vacations
-Entertainment
-Clothing
Transportation – 15%
-Car Payments
-Gas
-Insurance
-Repairs
-Parking/Tolls
-Train/Bus Fares
Debt – 15%
-Student Loans
-Credit Cards
-Personal Loans
Savings – 10%
It seems to me that as a person ages, the debt category (15%) could go away and that 15% could go towards savings, which would boost it to 25%. Just imagine being able to save 25% of your take-home pay! Here’s what the budget would look like at various income levels:
One thing they left out was tithing/giving. I suppose they are lumping all that in the “Other Living Expenses” category. For my family, it is a category in and of itself.
What’s your opinion of this budget? What do you like? What do you dislike? Is it reasonable for most people?
Topics: Budgeting | 17 Comments »
August 4th, 2006 at 6:44 pm
I agree with you, tithing is a huge financial principle that should get a spot of it’s own.
I’m not a mathy girl. (I do people) I took my budget guidelines from The Richest Man in Babylon- I basically do 10-10-10-70. Tithe, save, invest, and living expenses- in that order.
As mentioned, no one budget works for everyone- but it should have the 4 components- no matter how you divide them up.
August 4th, 2006 at 7:08 pm
I’d like the addition of a charitable giving category as well.
A tithing category would likely be defined as 10%. I would suggest carving 3% from both housing and other living expenses, then 2% from both the transportation and debt categories (if 10% is reasonable – adjust for your personal charitable level, more or less, as necessary).
August 4th, 2006 at 8:09 pm
I’m a debt bigot – unless you’re young and servicing student loans, non-mortgage debt should be zero. This plan allows a whole lot of debt, if you consider the fact that mortgages and car loans are not in the debt category.
August 5th, 2006 at 1:09 pm
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August 5th, 2006 at 5:05 pm
I don’t imagine saving 25% of my take home. I do it. Of course, I don’t tithe because I am not a religious person. I give my time on my days off to organizations that mean something to me however. So it all works out in my opinion.
August 5th, 2006 at 5:51 pm
One other nit I’d pick with this idea is the “elasticity” of the plan; in a “living below your means” approach, one would hit certain maximums and not go beyond them, no matter what your income. For example, why double your transportation expenses because you have twice the income? Unless you’re a car fanatic and really gotta have a Jaguar or Mercedes, the Camry that worked at $50K should still get the job done at $100K. Also, as your income goes up, your debt should go down or disappear – after all, you have more money – and your savings should go up both in absolute terms and in percentage terms.
Housing will tend to scale as your income goes up, especially if you want to live in a good school district, etc. But most other expenses should hit “utility maximums” and start going down percentage-wise, and even housing should taper down as your income goes up.
August 5th, 2006 at 6:05 pm
Foobarista,
Good points.
I think the purpose of this spending plan is to be a roadmap for those who don’t have their financial lives straight. In other words, for someone who may not have a budget and is wondering what a budget should look like.
August 6th, 2006 at 3:13 pm
My only comment- NO CHILD CARE.
Makes it very hard for most of us
September 20th, 2006 at 1:53 pm
I need to lose weight, there I said it. I'd love to start a weekly motivation group with the goal of documenting our weight loss.
I was thinking we could do one layout a week with different weight loss topics.
The first topic is:
Title Page with a current picture and your current weight and goal weight (you may want to blur these before posting online.) I plan on printing this one and putting it on my bathroom mirror, although the fridge would be a better place!
Who else is on board with me???
A couple more things, we need to figure out a night for a weekly motivation chat AND I'd love to have a nifty little name for us like:
PAW- Pound a Week
CHEESE- Choose Health Exercise Eating Sensible Everyday
I'm sure you can come up with something better!
October 21st, 2006 at 8:16 pm
So who is paying for the groceries? I didn’t see a slot for that, or did I miss something!
Lisa
http://thoughts-and-ramblings.blogspot.com/
December 11th, 2006 at 2:18 pm
I missed this series so thanks for the article and diagrams, very interesting. Thanks.
July 1st, 2007 at 8:25 pm
I am attempting to get out of debt. I tried a debt counselling service for one year (12/05-12/06 ) but they seem to have gotten me deeper in trouble. I have worked hard to get my debt down from $52,000 to about $27,000.
My largest debt however, was cahanged from one company to another (MBNA to Bank of America)
The account is with a company called creditors Interchange, I recently found out these people are lawyers. Since May of last year 2006, I have been faithfully paying down the debt from about $23,000 to $18,000 in December the charged me 24% interest retroactively and continued the interest. Despite my payemnts of over $6,000 I now owe (according to them) over $25,000.00. I contacted creditor interchange, then told me to contact Bank of America. I contacted Bank of America and the said to contact creditors interchange. I proposed a payment schedule that would pay all the principal and they have refused to accept it. Creditors Interchange had verbally assured me no interest chargers would be made if I paid monthly, but now have backed away from this
Do you have any suggestions or references.
Thanks for any help you can give me.
Jim Piccolo
July 1st, 2007 at 8:25 pm
I am attempting to get out of debt. I tried a debt counselling service for one year (12/05-12/06 ) but they seem to have gotten me deeper in trouble. I have worked hard to get my debt down from $52,000 to about $27,000.
My largest debt however, was cahanged from one company to another (MBNA to Bank of America)
The account is with a company called creditors Interchange, I recently found out these people are lawyers. Since May of last year 2006, I have been faithfully paying down the debt from about $23,000 to $18,000 in December the charged me 24% interest retroactively and continued the interest. Despite my payemnts of over $6,000 I now owe (according to them) over $25,000.00. I contacted creditor interchange, then told me to contact Bank of America. I contacted Bank of America and the said to contact creditors interchange. I proposed a payment schedule that would pay all the principal and they have refused to accept it. Creditors Interchange had verbally assured me no interest chargers would be made if I paid monthly, but now have backed away from this
Do you have any suggestions or references.
Thanks for any help you can give me.
Jim Piccolo
October 19th, 2007 at 1:09 pm
I am assuming that you signed something with them, or signed up for a 6 month no interest schedule. That would mean that you paid for 6 months, and since it wasn’t paid off in that time, they retroactively charge you the interest that was acruing. This is very usual. You have to be aware of what you are signing up for, and read the fine print. Most credit cards companies, and debt consolidation, and stores that offer their store credit will do this. They do an introductory fee, and then back charge you if the balance isn’t paid in full. I would just go to your bank, get a consolidation loan (through a federally accredited bank or credit union), and pay it off through them with lower interest rates. Some may make you sign something that says you will not open up any lines of credits in the time that you will be paying off your loan. Which is a good thing, considering the whole point of the consolidation loan is to pay the large sum you owe.
Another thing, if you are trying to pay off multiple credit cards, do not get a consolidation loan. See if you can transfer your balances to one credit card with the lowest interest (and you may even be able to call the credit card company to lower your interest – just threaten to close your account). If you can’t transfer, then pay the minimum on the one with the lower interest rates, and pay excess on one of the cards with the higher rates. Pay off one at a time, starting with the higher rated cards. Do not use them anymore, and don’t open up any new ones. And remember that after you have your debt paid off, you won’t have the sleepless nights, and stressed out life. Make a plan, and stick with it.
Good luck!
April 11th, 2009 at 1:30 am
Response to Jim Piccolo:
‘Rubber Duck’ Reports:
In a fairly recent 2008 memorandum decision in the Supreme Court of New York State, the modus operandi, and therefore inherent personification of the entity, “Creditor Interchange”, its ownership, management and counselor’s is made public for all to see.
Although the defendant was ultimately awarded dismissal, the plaintiff’s reference to the use of misleading oral promises, as well of employing ‘dark legal practice’ in the phrasing of written contracts by Creditor Interchange is eloquently described within the context of the decision, and could be construed as a warning to others deliberating on whether to enter into any business agreements with the parent company, Credint Holdings, LLC, Creditor Interchange, LLC, its ownership, management, counselor’s and others, directly or indirectly involved with its affiliated businesses and/or ad hoc associations.
The text of the above referenced proceeding is posted on the internet at: http://www.nycourts.gov/courts/comdiv/PDFs/8th%20JD%20DOIs/Gouchie%20MD.pdf
The plaintiff in the proceeding, Mr. Kenneth Gouchie, may or may not be petitioned for advice regarding Creditor Interchange and his original complaint. It’s possible that he may be contacted at:
Kenneth P. Gouchie
1800 Highland Ave
Fall River, MA 02720
(508) 567-3395
It is of additional interest that the planned acquisition of Creditor Interchange by Debt Resolve, Inc. (AMEX: DRV), terminated by the buyer, was due to Creditors Interchange’s breach of its representations and warranties under the purchase agreement related to its financial condition as well as the existence of a material adverse change in the financial condition of Creditors Interchange.
Debt Resolve Co-Chairman and CEO, James D. Burchetta said: “We are extremely disappointed we had to terminate our efforts to acquire Creditors Interchange. Unfortunately, the deterioration of the financial condition of Creditors Interchange left us no choice.”
Additional references:
1) Chairman, providing guidance for Creditor Interchange is: Mr. Bryan Daniels, of Prairie Capital:
300 S. Wacker Drive #1050
Chicago IL 60606
(312) 360-1133
bdaniels@prairie-capital.com
http://www.prairie-capital.com
2) March 12, 2008 Gary Holter Named as President & CEO of Creditors Interchange.
BACKGROUND
Gary Holter has been President and Chief Executive Officer of Creditors Interchange, Inc. since March 13, 2008. Mr. Holter has been Chief Financial Officer of Creditors Interchange, Inc. since 2003. Mr. Holter is responsible for all aspects of the Creditors Interchange’s operations. He has over twenty-five years of operational management experience through various executive level positions in a broad range of industries.
3) Joseph Jerge acts as Senior Vice President of Collections at corporate headquarters.
4} Thomas Wilcox acts as Director of Marketing at corporate headquarters.
5) Additional court dockets involving Creditors Interchange: http://dockets.justia.com/search?q=Creditors+Interchange
6) Creditors Interchange Corporate Office:
80 Holtz Drive,
Cheektowaga, New York 14225
Phone: 716-614-7500
Fax: 716-614-7546
http://www.Creditorsinterchange.com
7) It was last reported that Prairie Capital and Caffery Capital Partners were in discussions to acquire Creditors Interchange. Watch press releases at http://www.prairie-capital.com and http://www.cafferycapital.com for the latest news on that subject.
NOTICE: The information contained in this report is based on publicly available records and press releases. Regardless of the information researched and reported on here, it shall not imply that the entities referenced are any less than professional and law abiding in their commercial dealings.
-end report
December 23rd, 2010 at 5:42 am
Hi,
I am new here.
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December 23rd, 2010 at 5:42 am
Hi