Review: Bank of Mom and Dad

So last night I sat down and watched two episodes of “Bank of Mom and Dad” – which is a new show on the Soap network. I watched it through Hulu – link goes to Hulu where you can watch all three available episodes yourself.

Essentially they are highlighting these young women (I’m not sure why they don’t have any episodes with guys) who are in their late twenties or early thirties who are living with tons of debt. They have credit cards, horrible spending sprees, expensive tastes, and have no desire (for a variety of reasons) to change this.

I watched Christina and Dina.

These girls didn’t want to change their ways, so their parents come and live with them for a week. And with the help of a financial advisor, the parents take control of the girl’s finances and start to put them on the right course for life.

However… in some ways I kinda felt the steps they were taking TOO small. (And this coming from a girl with the blog name “Small Steps for Big Change”)

For instance… Dina doesn’t have a job because she is an aspiring actress/model. She lives, rent-free, with her boyfriend. She make very little money passing out promotional fliers each month – and she has about $30,000 worth of debt. Half of which is in collections.

So the financial advisor (and her family) try to convince Dina that what she should do is get a PART TIME job where you can make enough money to put about $400 towards debt – $200/month on her non-collected upon debt and $200/month in a savings account so that she can get enough eventually to bargain with the collection agency to reduce the debt load.

Okay… in theory this all sounds good.

But, in reality this is MESSED UP.

So let’s just say that she has $15,000 worth of debt (since they say that half of it is in collections). I have a VERY hard time believing that just putting $200/month on this debt will be enough to even come close to paying her minimum requirements. So she will a) continue to keep getting fines for not paying her finance charge and b) never see her debt grow.

Well at some point – maybe 2 or 3 months down the road – she’s going to look at her balance and see “WTH? My debt hasn’t gone down AT ALL?!” And she is going to get discouraged. And most likely this discouragement is going to cause her to lapse back into her old habits.

Sure, maybe I’m being pessimistic – but what motivation does she have to continue if she didn’t want to address the debt in the first place and now that she is it isn’t getting any better? The amount that they’re asking her to pay is barely enough to break even. And sometimes, treading water can be more harmful than drowning – at least it was for me.

When I was breaking even with my debt every month I didn’t bother to fix it. Because I could “handle” it – it wasn’t until I started DROWNING in my debt that I woke up and realized that I needed to DO SOMETHING!

Anyway… I think the better option for Dina (granted I’m not a personal finance expert or anything) would be to put all $400 on her debt until she can get ONE THING paid off. THEN, start splitting her money so that she can save for the collections and put money on her debt.

I dunno… but I’d like your thoughts on this. Was the financial advisor right on this call? Is this just a way for her to START? Or would you have addressed Dina’s situation differently. Please, watch the episode and tell me what you think. =)

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9 Responses to Review: Bank of Mom and Dad

  1. TeacHer says:

    Haha, I watched the same 2 episodes. I found Christina a lot more shocking. At 33 she was overspending by $1000 per month! It was a case of: who does this girl think she is?! She was living a really high-end lifestyle on a very moderate income. What I didn’t get about her was that she had all these student loans, so she obviously had some education, yet she was working as a bartender…and no one suggested that she get a different job that paid more money.

    I like that show in a guilty pleasure kind of way 🙂

    • SS4BC says:

      Oh yeah Christina was just nuts – and I LOVED it when she found out she liked tap water better than her expensive bottled water. They did a similar taste test like that on Bullsh*t with Penn and Teller – and they found that New Yorkers generally PREFER their tap water when given the choice, bu there is something about SEEING the bottles that makes them think it is better.

      I think Christina has a lot of direction that she needs in her life. Obviously she HAS to get rid of the car and has to pay down her debt before she can continue travelling. Perhaps her student loans were all for different points in her life where she STARTED school but then quit after a semester or two?

  2. I agree that the financial planner (based on your assessment above) didn’t do such a hot job.

    I guess it might be because we’re more PF-geared, but… I really feel like sometimes they go too easy on them, when they should be getting really tough love.

    I wish I could watch the show *sigh*

  3. Jessie says:

    Canadian’s don’t get access to Hulu 😦

  4. TMcImmy says:

    The show may have focused on women because it is on SOAP net. It also may be that women are more inclined to suckle at the financial teat of mom and dad more than men. When young men screw up financially I think parents are a little quicker to give them tough love than girls. I think a portion of women go through their college years and twenties sort of expecting to meet a guy who will marry them and support them financially. Certainly far more women have that financial “plan” than men.

    It does sound like the steps the financial adviser recommended will only put a small dent in Dina’s debt.

    Of course, TV should often edit out some of the nitty gritty details. For example, given the show name of “Bank of Mom and Dad”, there’s an implication the parents may have capacity to help their adult child out, but they want to give a hand-up, not a hand-out. Paying off her debt without her first changing her habits would just encourage more bad spending and debt. On the other hand, if Dina could stop the financial bleeding and at least start moving in the right direction, as a parent that would give more incentive to bail her out.

    Dina actually might be a great candidate for personal bankruptcy. She’s not married, has no assets and huge debts. Presumably she doesn’t have serious plans to buy property in 5-10 years, and losing access to credit would arguably be a good thing for her.

    I watched part of the Christina episode. I can’t help but wonder what she majored in, or if she finished. Of her $35k debt, $25k was student loans, and $4k was medical expenses attributable to not having a job that provides insurance. Although her spending being in excess of 1,000 a month of her income is a problem, a huge portion of her sticker debt is a direct result of her education not landing her a career that could pay off her student loans and give her insurance.

    • SS4BC says:

      HOWEVER, even though the name of the show is “Bank of Mom and Dad” – it is obvious that these girls aren’t living off mom and dad anymore. They’re living off debt. So really the only point of the “mom and dad” angle is that the parents are moving in.

      As for Christina, it is a real wonder what she did major in. Also, it is curious why she lives in NYC. She obviously prefers a lifestyle that would necessitate a car. Perhaps LA would be a better place for her. 😉

  5. Serendipity says:

    I saw this episode! She cracked me up with her promotional work and I’m a model attitude. But, as for suggesting the debt repayment plan, I would have tackled it as paying off one debt first while slowly building a e-fund. I liked your perspective of paying single debts off first as to not get discoraged, since her’s are already in collections anyways.

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