Review: Bank of Mom and Dad
October 21, 2009 9 Comments
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. =)