Oprah’s Debt Diet: I’m Not Impressed

Yesterday happened to be my short day at work and I made a point to be home in time for Oprah’s Debt Diet (Part 4, I think).  I generally like Oprah and was curious to see what her plan was all about.  She has the ability to influence a great number of people so I was hoping her plan would lead them in the right direction.  I was disappointed.  If you aren’t familiar with her plan go check out the steps, then come back and we’ll talk it over.

Before I tear it apart, I will admit that her plan probably has more potential to be followed by the masses than Dave Ramsey’s Baby Steps.  Mostly because it is much less drastic.  She supports the use of credit and suggests people maintain and groom their credit scores.  That jives well with today’s cultural addiction to The Great FICO (gag).

My greatest objection to the Debt Diet (DD) is simple: I don’t feel that it leads people to a state of financial peace.  It is not specific enough.  At the end of the DD’s Step 8 you would ideally have a handle on your spending, have low interest rates on your credit cards, and begin to save money.  Save money for what?  A new car?  A house?  Kid’s college?  Retirement?  In what order?  How much?  No, thank you.

I may have had a little more respect for the DD if not for the hideous pie chart.  The pie chart gives recommended percentages for spending in several categories.  Saving is only 10% of the pie!  That, apparently, is supposed to fund all those things I mentioned above (college, retirement, etc.).  Most experts recommend socking away 15% for retirement alone.  There is no room for that with the DD though because the pie allots 15% for “debt”.  You’re telling me that long term the ideal situation is to be putting more towards debt payments every month than towards my future!?  I don’t think so!!!

As I mentioned about, the DD encourages the regular use of credit and idolizing one’s credit score.  Why?  As Dave Ramsey says, “You’re basically going to go in debt now so that someday you can go in debt more.”  If you were to bank all those payments it would really add up.  You could benefit from your money each month instead of the bank taking it.  Hmm.

There are few good things about Oprah’s Debt Diet.  It does suggest slashing spending and working within a budget.  It also pushes people to take on extra jobs to raise their income.  It also seemed to bring some of the couples on the show closer together and open up the lines of communication about their finances.  Even the perks have their downfalls though… getting any extra job is a great idea if you’re intense about getting out of debt and cleaning things up.  However, I’ve heard time and time again that Dave Ramsey followers take on extra jobs and suffer with them for awhile until the debt is gone.  In the end that get to celebrating by stopping the 80 hour work weeks.  Focusing on a goal is what gets them through.  Is Oprah suggesting that her followers push themselves that hard indefinitely.  Or, until what point?  Again, the steps should be more clear.

I understand that I’m a little more of an extremist about debt and money than many people are.  Still, it is my opinion that the Debt Diet falls far short of the Baby Steps.  If a person or family commit to go down the latter path it leaves them at a place where their debt is gone FOREVER, they have money in the bank to cover rainy day, their family’s education is funded as well as their retirement, their home is paid for, and they get to celebrate by sharing it.  Come to think of it, Oprah’s pie chart doesn’t even have a place for tithing or giving.  It’ not even listed in the subcategories!  That alone is enough to make me steer clear of the plan.  What do you think?

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2 thoughts on “Oprah’s Debt Diet: I’m Not Impressed

  1. Kathi

    I too, have read all the Dave Ramsey books as I have the Suzie Orman books. In the first book by Ramsey, he does suggest starting off with saving 10% of your income weekly/bi-weekly/monthly, etc. for retirement UNTIL you’ve paid off all debt. It really doesn’t make sense to save too much money if you have outstanding debt (e.g. credit cards, car payment, mortgage, college loan, etc.). I personally believe that paying off the debt is numero uno BEFORE saving 10-15% for retirement…………I mean, who wants to be paying for a mortgage when their retired? Or do you spend all your retirement money at the time of retirement to ease out of that mortgage?

    Managing money is not hard, it just takes commitment and steadfast behavior. At the age of 46 I became debt free……….no house payment, no loans, no car payment………nothing. One way of configuring finances may be great for one person, but not another. In this day and age, I think ANY help that is out there, via cyberspace or networks, is a good thing.

    Reply
  2. Mermaid

    I can’t speak to Oprah’s plan because I’ve never heard of it, but you did an excellent analysis. I think you hit the point in the beginning: the masses won’t do something like Dave’s plan because they feel too entitled. They are lacking drive and pride in self to work hard to make it happen. Good analysis. I happen to like Dave Ramsey, so I’d stick with his plan. He advocates taking the bull by the horns and getting the job done – and then living like no one else later!

    Reply

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