Big Spender - 10/13/07

Here is what happened this week on A&E's "Big Spender". The show is on Saturdays at 11:30 am.

Background:

The episode focused on Jordana, a 25 year old real estate agent, and her husband Brandon. She has credit cards that she's never paid and are in collection. She spends $1000's every month to look pretty. When Larry first approached her, she thought he was a creditor. She lies to her husband about her purchases, and they are considering divorce.

She spends $800 each month on hair, nails, and makeup. She throws out her clothes after she's worn them 3 or 4 times and buys all new clothes. They have already made $21,000 this month alone, but have already blown through it. (Holy crap!)

Average Income: $8,250
Total Expenses: $6,977
Missing: $1,273

Since their income varies so much, they took an average. They obviously have more than enough money, but what concerns Larry is the fact that they have no idea where the missing money went.

Contract:

Here is what Larry asked Jordana and Brandon to do:

• Spend according to budget
• Keep a daily journal
• Cash allowance
• Open an interest-earning checking account (anything earned over amount for bills will be saved to pay in months when they earn less)
• No more salon visits that exceed budget
  

Budget:

Here is a partial list of their new budget:

• Overdraft: $272 --> $0
• Collections: $0 --> $2500
• Savings: $0 --> $1000
• Personal Care: $800 --> $200
• Entertainment: $300 --> $100
• Shopping/Clothing: $800 --> $100

They still have an extra $200/month left, and by paying extra towards their accounts in collection, they will have it paid off in less than 1 year.

Update:

After a few weeks, Larry checked up on Jordana and Brandon. Here is how they are doing:

• Jordana met with a beautician to teach her how to do her hair herself, saving her $500/month ($6,000/year).
• They created a list of goals for the future.
• Jordana went shopping but didn't want to spend the money.
• They are no longer talking about divorce.
• They spent about $50 on personal care ($200 budgeted).
• Jordana said they never had a day before where they didn't spend.
• They cut up their debit card on their own, making it more difficult to spend.
• They opened 3 accounts: 1) monthly bills, 2) cash allowance, and 3) savings.
• They will put a minimum of $1,000 each month into the savings account.
• They paid 3 accounts in full and closed them. They are working on the others.