Biggest Loser

The Challenge
I've made it a point to challenge all of my friends to become the Biggest Loser they can.

By biggest loser, I of course am referring to their credit card debt. I can't think of any easier way for someone to move ahead in life than by living the debt-free way. It's too common for people to just shrug it off and say "I can't help it, it's the economy" or "I got laid off" or "I'm only doing it through college; once I graduate I'll pay everything off in a few years..."

Bull shit! You know it, and I know it!

Financial Framework
If your financial posture lays the foundation for how you live your financial life, these people have got a raging case of financial-scoliosis. Their view of how money works is so twisted and skewed that by the time they come into any real money (i.e. a living wage that does not require the use of additional financing in the form of credit card debt) they're so trapped by their past mistakes that they will use any reasoning they can to justify their wants and wishes.

"I know I've got $15,000 in credit card debt, but I've finally accomplished something, so I think I'll buy a 64" plasma screen to reward myself..."

Tools of the Trade
Knowledge is power; and as Suze Orman is fond of saying, people need to "face it to fix it!" One way to do just that is by signing up to track your monthly net worth, as many uses have done over at NetWorthIQ.com.

Just like charting your weight from week to week, NetWorthIQ (and other similar services) offers users a chance to easily chart their finances over a period of time. It automatically generates graphs, and better yet, accountability when users choose to share their pages with friends and family members. Now, no one might know when you choose to sneak an extra snickers while on your diet; but if you charge it to your credit card and don't pay it off that month someones going to know about it.

Flash from the Past
While I was in school, I was taught the power of accountability as part of my initiation into the Society of Leadership and Success (which, hokey as the name may sound actually has an outstanding leadership certification program). Even overwhelming goals can be made possible by doing three simple things:

1. Clearly define what you seek to accomplish
2. Share this with a group of 5 to 6 individuals with similiar goals and values
3. Make it a point to hold one another accountable for reaching their success

In this instance, failure is not an option. Eventually, one of two things happens: you either do what you say you will, or you'll be too embarrased to face the group.

Sad but true, shame is at times a better motivator than the benefits from doing what's good for ourselves.

Food for Thought
My last thought to leave you with is this one: if you made it a goal to reduce your outstanding debt by at least 1.5% per month, each and every month, in 5 years 6 months and 2 weeks from the time you start you can be completely debt free and on your way to building a positive net worth. The only thing that makes this process difficult is not taking on additional debt as part of this process.

(To put things in perspective, if you currently have $35,000 in debt, that's only $525 a month paid directly on the principal to completely eliminate it.)