Notes from 20/20’s Special “Flat Broke”

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20/20 did a special tonight on America’s debt crisis. The broke it down into three parts: Spenders and savers, debt collecting, and cyberbegging. Here are some of the highlights of the show.

Spenders and Savers
This segment focused on two families living on opposite ends of the financial spectrum. The Peterson Family are big spenders. They’ve racked up over $60,000 in credit card, hundreds of thousands of dollars in time shares, and a few mortgages on their house. Despite their money problems, this year the family has gone on more vacations than any time in their marriage. They’re on the brink of bankruptcy.

In order to help them, 20/20 brought financial planner Robert Pagliarini, author of the book The Six Day Financial Makeover. He set up a plan for the Peterson family that included selling their house and time shares. I wonder if the family will follow through with it.

Watching this family, I couldn’t believe that people could just rack up debt like that. They never regretted a single lavish purchase they made because they figure they’ll probably be dead tomorrow. I don’t get it.

Lesson from the Peterson’s: DON”T USE CREDIT CARDS! Cut the darn things up (don’t cancel them; it hurts your credit score) and start paying with cash. Take it easy on the big purchase items. If you can’t afford it, don’t buy it. Duh.

The Economides are the cheapest family in America. At least that’s what they titled their book. They earn less than $35,000 a year, have seven kids, cars, but no debt. They’ve accomplished this by buying everything used and planning grocery store trips so they’re economical as possible. They carry around walkie talkies in the store to report on the good deals to each other. They also buy expired lunch meat. I’m going to have to do this again.

Lesson from the Economides: PLAN, PLAN, PLAN. Take advantage of coupons; every cent counts. Buy whatever you can used.

Debt Collectors
This segment was a perfect torts hypo for Intentional or reckless infliction causing severe emotional distress by extreme or outrageous conduct (See? I learned something in law school). They interviewed a former debt collector about the techniques they used to get money from people. Tactics included persistence calls with death threats, threats to reveal their debt to neighbors, and just plain emotional abuse. It was heartbreaking to see the crap that some of the debt collectors could drag people through.

Of course John Stossel had to bust out his libertarian stick to show that we should be thankful for debt collectors. He points out that the bad debt collectors are a minority. The tactics they use are illegal. He then goes on to argue that if it weren’t for debt collectors, prices would go up because companies would lose money on default payments. He also made a point that most of the clients of debt clients are small businesses. I always figured debt collectors were for big companies. Overall, I think Stossel made some good points. At least he got me thinking about things.

Lesson learned from debt collectors: keep only two credit cards, negotiate lower rates, and if for some unfortunate reason you become the victim of thug debt collectors, contact the FTC, your lawyer, and tape the culprit berating you.

Cyberbegging
Cyberbegging is a hot topic, especially in the blogsphere. Paypal donation buttons are popping up on blogs everyday. One law student started a blog to raise money to pay for his student loans. (However, one should note that he’s converted the site into way of raising scholarships for other students and raising awareness about student debt.) Cyber Beg is a popular site where one can list their financial need like they would list an item on craigslist. The crazy thing is that people give money.

The segment discussed how an admitted shopaholic, Karyn Bosnak, got herself out of $20,000 worth of designer handbag and belt debt by asking complete strangers on the net. It worked. She wrote a book about it and made even more money. A movie deal is forthcoming.

They also discussed how Dustin Diamond (aka Screech from Saved by the Bell) used cyberbegging to save his house. His sex tape, “Screeched”, has been picked up by a major porn distributor and he’s raking in the dough. (That makes two former Saved By the Bell alum who’ve gone on to make porn. Don’t do it Lisa Turtle! Resist!)

My first reaction is disgust. These people have no shame. Both Bosnak and Screech say what they did is creative, not shameful. Right… when was the last time you heard someone praise the creativeness of panhandlers and bums? That’s right never. Screech and Bosnack… you’re bums. Jason Ryan Dorsey, author of My Reality Check Bounced: The Twentysomething’s Guide to Cashing In On Your Real-World Dreams, discussed how Screech’s and Bosnak’s attitudes are common among twenty somethings. They’re not responsible with how they spend money, so they don’t want to be responsible for paying it.

I guess one could make an argument that ad’s or pay per post are forms of cyberbegging. I concede that I’m making money by just writ ting my thoughts, but it’s pocket change. I’m lucky if I get .20 a day. However, I think I’ve earned this money. I work hard trying to find content, writing up posts, and marketing my site so people will know about it. I think a dollar a week isn’t too much to ask in return. Same goes for pay per posters. They have to look into the product and spend time writing a quality post about it. They deserve the money they get.

Lesson learned from cyberbeggers: Get a real job!

Conclusion
Overall, it was a good show. I thought they could have spent more time disusing the frugal family. Check out the 20/20 site for more details.

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• 20/20 Special “Flat Broke: Begging and Borrowing in America”
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7 Comments

1. julie on 19.01.2007 at 22:28 (Reply)

   have you read savekaryn.com? there’s a link to her original website. it’s pages and pages and pages long and filled with content. she definitely worked for the money she made, just like any other pay-per-post blogger.

2. Tricia on 19.01.2007 at 23:22 (Reply)

   Interesting to read your take on the show. I would have loved to have them discuss more on the frugal family as well (gotta love their last name

   Those debt collectors really got me upset. I couldn’t believe what they were saying to try to get their money.

3. The Frugal Law Student on 20.01.2007 at 05:42 (Reply)

   Julie-
   I’ve looked at Julie’s site and am impressed by her content, but I still think it’s different from pay per post. With pay per post at least someone is soliciting your service of writing something up about the product. In exchange for that service you get money. With Karyn’s site she writes about things happening in her life while begging for money so she can buy handbags. It’s like justifying panhandling if before the panhandler asks for money he tells me about his dog or what he thinks about Starbucks. However, I guess reasonable minds can differ on the subject.

   Tricia-
   Some of those debt collectors were scum. I don’t know they can live with themselves.

4. LHMcKay on 20.01.2007 at 12:53 (Reply)

   I thought the whole concept of cyberbegging was very interesting. I just don’t see how people like Karyn actually get people to give her money. On the other hand I found this one site called letmestayforaday.com where this guy travels the world with no absolutely no money. He just travels with the hopes that people will take him in. I find this kind of admirable. In exchange for letting him stay at your home he writes about his visit in his blog. He has traveled all over the world without spending a dime and to do that is just amazing. Good post.

5. Brett on 20.01.2007 at 13:12 (Reply)

   LHMcKay- I’m glad to see you’ve wandered over here. I agree that it’s cool that the letmestayforaday guy has been able to travel for free. I’m sure he’s met some nice people along the way. It also reminds of the guy who traded his way from a paperclip to a house. Pretty cool.

   It’s funny how I don’t have a problem with travel guy, but I do with Karyn. They’re basically both doing the same thing: asking strangers to give them something for nothing. However, I thin they’re different in degrees. I guess what it comes down to is my gut reaction. Asking for money to pay off your shopping debt pisses me off. Asking to stay for free so you can travel the world tickles me as fun. I know. It’s a lame reason.

6. English Major on 23.01.2007 at 09:12 (Reply)

   See, it’s funny–there’s so much complexity to these instinctive reactions. Even though I give to panhandlers regularly, I have the disgust reaction to the Save Karyn thing. Yes, she was providing web content, but her debt was incurred on luxury items and she wasn’t even paying it off herself (though I guess blogging time can be considered “work”). That grosses me out, on the visceral level, in a way that giving a subway panhandler a dollar doesn’t and never will–that person is in need, and suffering the consequences of need.

   At the same time, I would consider placing a PayPal “tip jar” on my website, but hate the idea of running ads. Ads would tend to counteract the general message of my blog, whereas a PayPal “tip” of a few bucks seems like people paying me for providing content they’ve enjoyed. I don’t have a problem with that.

7. Iyuze2k on 29.07.2008 at 00:56 (Reply)

   http://www.donation-pages.com/node/14

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