Oprah show on Friday about getting out of debt.

[disneysteve]

If the Fed would stop raising interest rates-struggling Americans would be in a better position to pay things down.

A big part of the reason that so many Americans are drowning in debt is the low interest rates and "cheap money" we've had in recent years. Those low rates have encouraged millions to borrow billions that they couldn't otherwise have afforded if not for those low rates. As rates rise, all those folks are learning the error of their ways. Living on credit is just not a good idea whether the interest rate is 3% or 30%.

 

[Free4Life11]

Sorry but this makes absolutely no sense. Why would you want to pay more interest? You only get to write off a small percentage of your interest. For every dollar in interest, you only deduct about 25 cents. So you are spending 75 cents for every 25 cents you save on your taxes.

I think it's more of a look on the bright kind of thing. Yes it sucks that the feds are raising the interest rates, but at least you can deduct more interest since you will be paying more.

Of course I am screwed once again because only people who aren't claimed by their parents can deduct student loan interest. That annoys me to no end and I wish they would change it.

Do you even begin to understand WHY the fed is raising rates?

I know that it's to keep inflation in check and curb spending, but I know I'm not taking out student loans to go on a shopping spree that's for sure!

 

[Free4Life11]

Just because Oprah has money doesn't mean she can't tell others how to budget

I think the point is, one day her show is flaunting all her favorite things -- aka, one big commercial for stuff most people DON'T need. Then the next day she's telling people to get out of debt. I'll still watch the show though.

 

[disneysteve]

Oprah is a billionaire so she's not exactly the first person I want telling me to get out of debt.

If I want financial advice, I'd much rather get it from someone who is financially successful than from someone who isn't. I wouldn't ask someone who is in debt how to get out of it.

 

[disneysteve]

I think the point is, one day her show is flaunting all her favorite things -- aka, one big commercial for stuff most people DON'T need. Then the next day she's telling people to get out of debt.

I think this is an interesting point. There is definitely a mixed message there.

 

[Free4Life11]

If I want financial advice, I'd much rather get it from someone who is financially successful than from someone who isn't. I wouldn't ask someone who is in debt how to get out of it.

I meant that I would respect someone on MY LEVEL telling me why I need to get out of debt much more so than a billionaire telling me why I need to get out of debt.

Now for financial advice, I still wouldn't listen to Oprah, I'd listen to financial experts, not talk show hosts. However, I am assuming Oprah isn't going to be dishing out the advice.

 

[dvcgirl]

It's not Oprah's fault the interest rates are climbing-but again the people who pulled money from their home to live or improve things are not the well to do-they are people like my wife and I who wanted to paint our home and make other improvements.

As for Bush and the Fed-Bush picked the Fed chairman.

Also-rates have been steadily rising since Bush was put in office--those with tons of money in savings are now gaining more interest (getting richer)--while those with HELOCs and needing future credit are paying more (the poor get poorer).

One good thing is the more interest I pay-the more I can write off in taxes-I would rather the mortgage company and myself have the money over anyone in the federal government.

Well, I don't buy the "poor get poorer" bit, never have and never will. At least not as a blanket statement like that. As for Bush....he didn't choose Alan Greenspan...he had the job for a good many years...17 years I believe. And do you honestly believe that people are using their homes like ATMs only to do a little painting around the house? It's used for whatever the borrower wanted to spend the money on......including things like vacations, car purchases, college education, credit card debt.....you name it. The mortgage interest tax argument makes no sense.

 

[dvcgirl]

I meant that I would respect someone on MY LEVEL telling me why I need to get out of debt much more so than a billionaire telling me why I need to get out of debt.

Now for financial advice, I still wouldn't listen to Oprah, I'd like to financial experts, not talk show hosts. However, I am assuming Oprah isn't going to be dishing out the advice.

No, she'll have three experts on the show to give the advice. Seriously though, I think not wanting to listen to someone like Oprah about finances doesn't make sense. Who better to listen to than someone has created her own empire?

 

[Free4Life11]

No, she'll have three experts on the show to give the advice. Seriously though, I think not wanting to listen to someone like Oprah about finances doesn't make sense. Who better to listen to than someone has created her own empire?

Well in my case, I have no desire to become rich or own an empire. All I'd like to do is get out of debt. I don't want a mansion or sports cars or more money than I know what to do with. Oprah may know quite a bit about finances, but I'm not sure getting out of debt is her expertise.

 

[dvcgirl]

I think the point is, one day her show is flaunting all her favorite things -- aka, one big commercial for stuff most people DON'T need. Then the next day she's telling people to get out of debt. I'll still watch the show though.

I'll agree with you here Free4Life....I'm not a big fan of that particular show. As they parade out with purses worth $700 and electronics in the thousands I wonder how many are purchasing these items on credit cards. I mean, obviously, our level of consumer debt isn't all Oprah's fault, not even a tiny bit...but her show is quite influencial. I mean, look what she did for the publishing business with her "book clue". Very few people can actually afford to spend that amount on a single item for the holidays. I guess Oprah and Co.could argue that viewers like to live vicariously through the audience members' manic response as each item is introduced........but unfortunately our level of consumer debt says otherwise....

 

[dvcgirl]

Well in my case, I have no desire to become rich or own an empire. All I'd like to do is get out of debt. I don't want a mansion or sports cars or more money than I know what to do with. Oprah may know quite a bit about finances, but I'm not sure getting out of debt is her expertise.

Okay, I hear you. Well, I guess Dave Ramsey would be a better "expert" for you. He's a guy who actually was a self-made millionaire, lost it all, and re-built his fortunes by swearing off credit altogether and living beneath his means. Then again, he's become quite the marketing machine himself lately, and that can be a big turn-off to those who listen as well...

 

[grlpwrd]

I think the point is, one day her show is flaunting all her favorite things -- aka, one big commercial for stuff most people DON'T need. Then the next day she's telling people to get out of debt. I'll still watch the show though.

Excellent observation.

I'm all "frugalled out" and almost oversaturated with debt/financial advice, but I will still watch this show, too. Thanks for posting about it.

 

[TDC Nala]

If the Fed would stop raising interest rates-struggling Americans would be in a better position to pay things down. My HELOC is now over 10% interest-thanks to the Bush cronies.

Alan Greenspan was a Bush crony? That's news.

And the new guy (Mr. Bernanke) just started today, he hasn't raised anything yet (although he says he will).

 

[MrsPete]

Well, I don't buy the "poor get poorer" bit, never have and never will. At least not as a blanket statement like that. As for Bush....he didn't choose Alan Greenspan...he had the job for a good many years...17 years I believe. And do you honestly believe that people are using their homes like ATMs only to do a little painting around the house? It's used for whatever the borrower wanted to spend the money on......including things like vacations, car purchases, college education, credit card debt.....you name it. The mortgage interest tax argument makes no sense.

I agree, and I think too many people are blaming the government for their own bad choices. It works like this:

1. The feds can keep interest rates low so that people can borrow cheaply. This will encourage people to buy, buy, buy. People will have jobs, and the economy will be robust. The downside is that many, many people will spend beyond what's wise, and they'll be tottering on the brink of financial disaster constantly.

OR
2. The feds can raise the interest rates, causing people to become more cautious in their spending and borrowing. People will spend less, and this will hurt the economy. Fewer goods will be needed. On the upside, people will become more conservative and think about the need to pay off those expensive debts.

Both can't be true, yet people blame the government either way.

 

[MrsPete]

I think the point is, one day her show is flaunting all her favorite things -- aka, one big commercial for stuff most people DON'T need. Then the next day she's telling people to get out of debt. I'll still watch the show though.

I hear you, but she's a TALK SHOW HOST. She's not about comercials, she's not about debt, she's not about any one particular thing . . . she's about discussing whatever's a hot topic right now.

I have not actually watched the show in the last four years or so. Still, I know that she'll present "example" families, and she'll have a couple experts who'll give advice. It's not just her knowledge and experiences -- she's just the moderator, the host.

 

[MrsPete]

Oh I hear you. I am *NOT* happy that my student loan interest rates are increasing steadily. If they are going to increase the interest rates they might as well compensate by increasing the Stafford limits!

Do I understand this correctly? You're arguing that since the interest rate is INCREASING, they should allow you to borrow MORE, which means you WANT to be pay back more money at a higher rate?

 

[MrsPete]

I think it's more of a look on the bright kind of thing. Yes it sucks that the feds are raising the interest rates, but at least you can deduct more interest since you will be paying more . . . I know that it's to keep inflation in check and curb spending, but I know I'm not taking out student loans to go on a shopping spree that's for sure!

The interestrate /deduction argument makes no sense. You're paying out DOLLARS in interest and deducting PENNIES on your taxes; it's a losing battle. There's no "bright side" to bad math!

YOU might not be taking out student loans to go on spending sprees, but some people are. I knew LOTS of people in college who were "living high on the hog" on loans: no-roommate apartments, eating out, new clothes, etc, etc, etc. Perhaps they really did NEED a loan to get through school, but with just a little effort they could've had much SMALLER loans.

I, on the other hand, worked my way through school. It wasn't easy, and it took me five years to earn my first degree. At the worst, I lived in a two-bedroom apartment with a total of five people; thank goodness we all worked different shifts. I remember wearing tennis shoes with holes in the soles. I remember shopping at the salvage store for cheap food. I remember sharing textbooks with a friend or reading the copies in the reserve room at the library. But I graduated completely debt-free. If I had it to do again, I would do the same thing.

 

[deide71]

Watching billionaire Oprah tell me how to get out of debt would be like watching Dick Cheney giving rifle lessons. If I made her money-I wouldn't be in debt either. Let's face reality-there are ways to get out of debt-but enjoy life too. Yes-I have some debt-still paying off a 3500 credit card-but I am not giving up a trip to Disney to do it.

If the Fed would stop raising interest rates-struggling Americans would be in a better position to pay things down. My HELOC is now over 10% interest-thanks to the Bush cronies.

Again-the rich get richer-the poor get poorer.

Come on now get it straight, it was a shotgun, not a rifle !

 

[CarolA]

Okay, I hear you. Well, I guess Dave Ramsey would be a better "expert" for you. He's a guy who actually was a self-made millionaire, lost it all, and re-built his fortunes by swearing off credit altogether and living beneath his means. Then again, he's become quite the marketing machine himself lately, and that can be a big turn-off to those who listen as well...

At least Oprah's not telling you to spend money on HER to get out of debt. Dave wants you to believe he has YOUR best interest at heart... NO WAY!!! Dave had DAVE'S interst at heart. Buy his books, pay for his internet access buy his envelopes (my personal fav!) I know folks who worked for Dave.... Dave is greedy.. (And Dave's I've been there.. yes, we all managed to lose a lot of money for investors didn't we???)

 

[Free4Life11]

Do I understand this correctly? You're arguing that since the interest rate is INCREASING, they should allow you to borrow MORE, which means you WANT to be pay back more money at a higher rate?

No. In a nutshell, I am saying I would rather take out Stafford Loans than alternative private loans, since Stafford Loans are relatively low-interest. But there is a limit on Stafford Loans, which is why many students take out alternative private loans -- to cover the gap. If the limit was higher, I wouldn't have to take out the private lows and thus wouldn't be paying 10%+ interest.

The interestrate /deduction argument makes no sense. You're paying out DOLLARS in interest and deducting PENNIES on your taxes; it's a losing battle. There's no "bright side" to bad math!

It makes perfect sense to me. If I pay $500 in student loan interest one year, I can deduct $500. If my interest rate increases and I end up paying $700 in student loan interest, then I can deduct $700.

Calm down on the CAPS.