Liz gets her act together — sort of.

Liz makes good money — and she likes to spend it. “It’s not so much that I buy big, I just buy a lot,” she says. “I’ll buy any books that I want, any CDs, clothing." Appropriate rewards for all that hard work, she figures. The problem is that she doesn’t know how much she spends, or where it goes.

Makeover Candidate: Liz
Her Job: Executive producer for a New York studio that edits TV commercials. She’s also a novelist and screenwriter.
Home: A studio apartment for $970/month
Her Background: A tiny town in upstate, New York
She Earns: $92,000 with bonus
She Spends: $92,000 with bonus
Her Problem: She’s paid off $17,000 of credit card debt but still can't control her spending.

Expensive Habits

Car Service: $24/day — or more

Books and Magazines: $400/month

Eating Out: $599/month

Gifts for friends and family: $400/month

In June 1999, she found out how big her problem really was: she added up the balances on her five credit cards and found herself with a whopping $21,219 tab.

At the urging of a friend, she contacted the Consumer Credit Counseling Service of Maryland and Delaware, and asked for help. Thus Liz began a new way of dealing with money — by dealing with money.

The first thing the Consumer Credit Counseling Service did was to connect her with a counselor for a long heart-to-heart over the phone.

“I had a weird kind of Oprah-esque conversation with him that was sort of good because he was really talking about emotional issues.” They discussed how Liz's smalltown childhood had left her unprepared for the advertising world's attitudes toward money. "Psychologically, it's a case of growing up without a lot of money, so then when you finally get money you just spend it. I work in the commercial industry, where people like to throw money out the window — this was my first job, so it was also my first exposure to how people deal with money."

The Consumer Credit Counseling Service next took control of her debts, consolidating debts owed to five different credit card companies and negotiating with creditors to lower her interest rates — from as high as 23% down to about 8%. The counseling service then worked out a monthly payment amount that Liz agreed to, and they take this amount directly from her bank account each month. "My payments now are $378 a month. I didn’t want to pay more because I have to be able to go out to dinner and stuff. They’re very attentive to your needs.”

Since she started this payment plan in June 1999, Liz has paid back nearly $17,000 of her debts, reducing the total to $4,520. Credit cards no longer have any role in her life — instead, she uses a debit card and an American Express card, which she pays off each month. It hasn't always been easy, but she has stuck to the new rules. “When I have money, I spend it,” she says, “and when I have less of it around, I spend less.”

She has also begun contributing to her company’s 401(k) plan — $90 from each week’s paycheck, which now amounts to $2,000. This would be her only savings if it weren’t for the happy fact of her employer’s profit-sharing plan, a type of pension plan, which has accumulated $55,000 for her behind her back.

Taking control of her financial life could help Liz achieve her goal of leaving the advertising world to focus more on her filmmaking and writing. “I’ve made a lot of progress on my debt,” she reflects, "but you look at that and then you say, 'well, if she could do that, then she could have put a lot of money away.' It's definitely a little embarrassing."