Meet Lisa and Steven Bradley, and their two children, Madison and Michael. Lisa works as a case manager, while Steven is a government employee. Together, they make $102,000 a year.
From the outside, the Bradley family seems to have it all. They live in a $300,000 house and recently purchased two new cars. Lisa admits she spends thousands of dollars every month projecting the image that "everything is perfect." "For me it's very important to look the part no matter what the cost," says Lisa. "I like to get my hair done weekly...I will only buy high-end jeans."
But the Bradleys' financial reality is a far cry from the image they maintain. The truth is that the Bradleys are $170,000 in debt!
Lisa Bradley admits her spending is out of control. At the time the couple purchased their new home, Lisa says, "Steve even told me we couldn't afford it, but I wanted it." Lisa admits to maxing out all her credit cards and not being able to make the payments. In one month, her cell phone bill was a whopping $398.84. In order to purchase her pricey new truck, Lisa admits she forged her husband's signature. Now, she has $1,100 in car payments every month.
Eating out is another big expense for the Bradleys. Lisa says she doesn't cook—instead, they spend about $100 a day on takeout. And because Lisa doesn't like to do dishes, the family uses only plastic dishes and utensils—another expense that can really add up.
Lisa recently leased a piano for her daughter, which will end up costing more than buying it in the long run. How will she convince her husband to agree to the pricey lease? "I'm just going to let the truck show up with the piano so that when he comes home, it's there," says Lisa. "There's nothing he can say at that point."
$170,000 in debt, Lisa and Steven say they are on the verge of divorce because of her reckless spending.
Lisa and Steven Bradley say the money madness that's going on behind closed doors is tearing their marriage apart. "My marriage is very close to being over," says Lisa. "I know my husband has reached a point of frustration to no return."
Steven agrees, saying they argue about money on a daily basis. He says he wasn't even aware of the couple's $79,547 student loan debt. "We make good money as a family and it just shouldn't be this way," says Steven. "I'm tired of it."
The truth is, Lisa and Steven have been living in financial denial for the past three years. Lisa says she throws away the bills and ignores calls from collection agencies while their debt piles up. Lisa says services such as electricity, water, trash pickup and the phone get cut off all the time because she can't keep up with the bills.
Our Debt Diet expert shocks the Bradleys with drastic emergency measures.
Financial expert Jean Chatzky
, author of Pay It Down!
, coaches the Bradleys as they take the Debt Diet challenge.
Jean says the Bradleys can shrink their debt immediately by simply spending less.
- Instead of spending $7,000 a year on her hair, Lisa will have to spend half that amount.
- The Bradleys spend $30,000 eating out, but on the Debt Diet, they'll have to cut that amount in two.
- They spend $5,000 a year on their cell phone bill—that's 1 out of every 4 waking minutes! On the Debt Diet, the Bradleys will have to limit their phone chats and cut that bill in half.
- They will also have to give up 2 of their 5 cars.
- Jean also says the Bradleys need to start using real dishes and silverware, instead of disposable dinnerware.
- And that piano Lisa leased? It's going back to the showroom!
Lisa and Steven say they're on board with Jean's plan, and sign the Debt Diet contract
to prove their commitment. "Your entire life is on payments," says Jean. "You don't own your life. But when you are finished with this process, you are going to own
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