Give Yourself an Extreme Money Makeover

There’s nothing like a job-layoff notice, getting a call from the bank saying you’ve bounced your account to the moon—or in my case back in the ‘80s learning that our home was about to be foreclosed—to tell you that you need an extreme money makeover..


Before picture. Any makeover worth its salt needs a great before picture. A personal financial snapshot is called a Statement of Net Worth—a realistic estimate of how much money you would have left if you sold all that you own and paid off all that you owe. It’s a picture you need no matter how dire your situation may seem to be.

Your attitude. Face it. The only thing you control absolutely is your attitude—the way you choose to respond to life and all of its challenges. This is a season in your life that has come and will go. It’s not forever. You can handle anything as long as you know it will end. Choose to face your extreme situation with an equally intense response.

Get a plan. Write a simple plan for how you will reach your goal keeping in mind that a good plan is specific, reasonable, realistic, finite with a way to measure results. Give yourself a date by which you plan to have this makeover complete. Now create stepping stones so you can measure your progress.

Freeze spending. Yes, it’s extreme but so is your makeover. Imposing a spending freeze for the next week or two will give you the jumpstart you need. Then move into a non-essential spending freeze for the foreseeable future. 

Track spending. Starting now—today—keep a written list of where your money goes. If you spend it, it better be written down. That is how critical tracking will be to your successful makeover.

Stop debting. Okay, it’s not really a word, but it should be. To debt means to use a credit card to create debt. This has to stop because of its negative effect on your net worth. No more debting.

Start saving. Even five bucks a week put aside consistently is going to change your attitude about living frugally. Money in the bank offers a kind of security that is difficult to describe. And the more you save, the more willing you are to find ways to make it happen in bigger and better ways.

Sell assets. Unless you use it regularly or it’s a cherished family heirloom, selling assets to raise cash is a great way to return the powerful jolt that brought you to your financial knees. Use the proceeds to catch-up on your bills, to start an emergency savings account or to pay down debt.

Downsize. If you are in over your head with a mortgage you cannot afford or rent that is beyond reasonable, move to a cheaper place. Or get a roommate. Yes, it’s extreme and but may be exactly what you need to do.

Get another job. It won’t be forever, but for right now working nights and weekends may be what you need to do. If a part-time job can net $400 a month, that’s $4,800 to apply to your situation.

Give up a vice. At $22 a pop, giving up a bi-weekly manicure habit will save you $650 annually. Emery boards and polish are cheap. Or switch to once a month. You’ll still save. Other vices like cigarettes, short cab rides and fancy coffee drinks are huge money drains.

Sell a car. Add up what it costs you to operate that second car—gas, payments, maintenance, insurance, registration, washes—and it won’t be so difficult to live without it. At least for a while.

The relief you will feel after taking such extreme measures to deal with your financial situation will far outweigh the temporary discomforts along the way. I’d love to know how you are doing with your makeover. Write to me here.

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6 replies
  1. Victoria Statz says:

    Your column today couldn’t have been more strategic, My husband and I have been trying to set up a meeting with a young couple who is in dyer straights with their finances. We hopefully will be meeting with them tonight. They need to do every single thing you have listed that will help them get back on their feet. One thing they have that I’m not sure how to help them with is their ten school loans they have, some with over 10 percent interest. They are in a six month deferment on them, but that time will go fast.Can you suggest some help in this consolidation of school loans process? I have read your column for many years,love what you do. Please send me help.

    • Mary Hunt says:

      That their loans are in deferment is not a good thing. That interest is just piling up and compounding on them. Their debt is growing every day by leaps and bounds because they are not even paying the interest. But consolidation is not necessarily a good idea, either. First, most people don’t even know what “consolidation” means. That aside, if they were to consolidate they would immediately lose all options for forgiveness. In the past few years Obama has introduced repayment options that include forgiveness of some of the debt for a variety of scenarios like working for a non-profit, public service teaching in an inner city or working in law enforcement and so on. They may also qualify for an income-based payment plan. The problem is you must have a good repayment record (on time payments) for that to be an option. I’m not sure how deferment plays into that. It is possible they would still qualify if they had a clean record of payment before they opted for deferment. See to learn more about all of this. Bless you for doing what you can to help them.

      • Mary Hunt says:

        Sallie Mae used to issue and service federal student loans. However, in Jul 2010 Congress passed the Health Care and Education Reconciliation Act of 2010. Effective on that date, all federal loans are originated directly by the U.S. Department of Education. All loans originated with Sallie Mae after Jul 2010 are private student loans. Sallie Mae still SERVICES federal loans, but they cannot make federal student loans. The Federal government now (as of 2010) lends directly to students, bypassing institutions like Sallie Mae. So … your friends may have federal loans that are being serviced by Sallie Mae or they could have Sallie Mae originated loans, and if they got them after Jul 2010 for sure they would be private loans—and not qualified for forgiveness programs. It might take a few phone calls for them to figure out exactly what they have if this is not clear on their paperwork. There is nothing about student loans—federal or private—that’s easy. Unfortunately, students (and their parents in many cases) do not discover this until after they have signed for and accepted all that easy money. Financial Aid officers make it sound so easy … and it appears to be that way until the deed is done. Even the “exit counseling” student debtors must have before they leave school makes it sound like repayment will be so much fun and so easy. Yippee. You are witnessing the very real (and sadly common) result of all that easy money.

  2. Miriam says:

    40 years ago I declared bankruptcy. I was a single mother with 3 kids and no idea how to manage my money. Since then I have several times built up credit card and paid it off. I have never had more month than money until just a few months ago when I finished construction (with my own hands) of a rental apartment in the lower walk out level of my rural home. Since then I actually have more money than month. What I have noticed is that, while I have been living frugally for a long time now, while I still had some debt (parked as I paid off on a credit card with .99% interest) and was paying it down, I was still spending on things we ‘needed’. Now that there is no debt and money in the bank I am really loathe to spend any of it. I want to hang on to it. Interesting.

    • Mary Hunt says:

      Good for you Miriam. Great story. I would love for you to read my book Debt-Proof Living for how to stay out of debt now and not feel paralyzed going forward. You cannot go forward in your life without spending money. You just need a plan and a roadmap. You’re in a good position now to begin saving for the future; building wealth and making sure you are in a good position to handle any financial unknowns that may be in your future. Here’ a link to that book:


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