Household Debt Panel
By Yolander Prinzel
I think the goal of almost every single person on Earth is to go through many stages of upgrading his or her life. Remember the car you drove when you were a teenager? Well there is no way you want to drive that car foreve – heck no, you want to upgrade. From the car you once drove, the last apartment you lived in, the job you had or the neighborhood you were located in, chances are you have spent a great portion of the last 10 to 20 years upgrading and you probably plan to continue to do so.
But where does all of this upgrading put us? Sure we have nicer cars, bigger homes and better job titles but if our assets are not much greater than our liabilities then all this forward movement isn’t really an upgrade – it’s a lie and eventually it will catch up to you. It’s like every episode of Scooby-Doo, when they pull the face off the ghost, ghoul, goblin or other spooky character. When they do, you find that the face was nothing more than a mask to hide the villain’s true identity, just like the expensive SUV, the big house and the Coach purse is nothing more than a mask that many people wear to hide their true financial identity.
If this sounds like you then it may be time for you to create your own debt panel. President Obama recently created a bipartisan debt panel to make many of the big decisions about which programs and funding efforts our government needs to cut and what taxes might need to be increased in order to get our national debt under control. Sometimes even in our own personal budget it is a good idea to get some outside feedback to help us decide what bills and services we should cut and how we should arrange our budget to reduce our debt.
While many people turn to professionals in order to help get them on the right track, you don’t have to take that route. Instead, you can go to friends and family members that you trust and create your own personal debt panel. In order for it to work you must be completely honest with them about your finances and you must be willing to adopt the changes they ask you to make in your spending.
Steps to Creating and Instituting Your Personal Debt Panel
1. Make a list of family and friends whom you trust with your personal financial details, whose financial judgment you trust and who will understand the commitment, scope and purpose of the project and ask them to join your debt panel. You should have at least three people on your panel in order to ensure a good number of ideas and input and no more than five to avoid confusion.
2. Gather your last 3 or more bank statements, credit card statements, mortgage statements and any other relevant financial records. These documents should give the full picture of your income, expenses and debts. Make copies of them and give a copy of the entire packet to each of your debt panel members.
3. Schedule an initial meeting between the debt panel members so that they can go over your financial situation and create a course of action. You should not be present at this meeting.
4. Schedule another meeting during which the debt panel members will meet with you to discuss their findings and give you direction for future spending.
5. Set up a monthly, recurring meeting that allows the entire panel to get together and review your finances and your progress.
Photo credit: P Matthews 86
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