Oprah show on Friday about getting out of debt.

[DVC Sadie]

Remember that LendingTree.com comerical with that guy saying how he's a member of the golf club, has a new car, 4 bedroom house with all the trimings, then says "How do I do it? I'm in debt upto my eyeballs. I can barely make my minimum payments! Somebody help me!"

Even if the show only inspires a few thousand people to get their financial lives in order and get out of debt, it's still a step in the right direction.

My husband loves that commercial. It reminds him of one of his family members. I'd be thrilled if the show inspired 10 people to get there finances in order. ITA that it's definately a step in the right direction.

 

[MrsPete]

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.

That makes more sense.

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.

No, you deduct A PORTION of that interest from your taxes. You're still "losing" money to interest.

By the way, CAPS are a way of inserting vocal emphasis into text, which makes writing more like our natural speaking voices. Used sparingly, CAPS increase clarity. IT'S ONLY WHEN THEY'RE USED CONSTANTLY THAT THEY'RE CONSIDERED SHOUTING.

 

[MrsPete]

My husband loves that commercial. It reminds him of one of his family members. I'd be thrilled if the show inspired 10 people to get there finances in order. ITA that it's definately a step in the right direction.

My husband and I always laugh at that one too.

The other one I find amusing is Lending Tree. We're supposed to see the potential borrower as "in control" and "powerful" because he has so many choices -- all those lenders are vying for his attention! But we're not supposed to notice that by the end of the commercial, he still has NO MORTGAGE! Sigh. I've always found advertising highly entertaining!

 

[LoriMistress]

I love watching shows like that. I keeps myself and DH modivated. DH and I will be buying our first home shortly. Our parents will be helping us out most likely by paying off all of our debt (we have debt that is the most $4000, but it should be lower now.) Plus, we want to save money for our December 2007 WDW vacation.

 

[Free4Life11]

No, you deduct A PORTION of that interest from your taxes. You're still "losing" money to interest.

I don't know how it works with other loans or interest, but I know when it comes to student loan interest you can deduct the full amount paid, up to $2500.

 

[disneymom3]

I don't know how it works with other loans or interest, but I know when it comes to student loan interest you can deduct the full amount paid, up to $2500.

I think what MrsPete was trying to say was that yes, you are deducting the amount of interest you paid, but that does not come directly off your tax bill. It reduces the amount of income you are taxed on which is not going to be a one to one ratio of what you paid in interest.

However, I am speaking out of school since I never had student loans nor am I the person you are responding to.

 

[Free4Life11]

I think what MrsPete was trying to say was that yes, you are deducting the amount of interest you paid, but that does not come directly off your tax bill. It reduces the amount of income you are taxed on which is not going to be a one to one ratio of what you paid in interest.

Oh I know. I guess what I was saying is, you may not have control over the interest rates, so if it makes you feel any better, a $700 deduction is more benficial than a $500 deduction.

 

[disneysteve]

Oh I know. I guess what I was saying is, you may not have control over the interest rates, so if it makes you feel any better, a $700 deduction is more benficial than a $500 deduction.

Not to belabor the point, but this is an issue that comes up here a lot and I think is worth discussing. So this isn't particularly directed at you, Free4Life11, but at others who may not understand how this works.

A tax DEDUCTION is not the same as a tax CREDIT. A tax credit is a dollar for dollar reduction in the taxes you pay. So a $1,000 tax credit reduces your taxes by $1,000. A tax deduction means, essentially, that you don't pay taxes on that amount. So, in this example, if you have $500 in loan interest and are in the 25% tax bracket, you would save 25% of $500 or $125. That means that your deduction actually COST you $375. To continue the example, if the interest increases from $500 to $700, the deduction is now worth $175 but the cost to you is now $525.

So deducting interest is certainly better than not deducting it, but taking out larger loans or a bigger mortgage just so you can take a bigger deduction, just doesn't compute to a good thing.

 

[dizcrazy]

What am I missing here? We have had several threads about the fact that Americans have too much debt and not enough savings (retirement, emergency funding) and yet people are upset that Oprah is trying to motivate people by putting them on a money diet? I think a money diet is exactly what is needed in this country, although I still agree with Dr. Phil's expression that for some people, you can't solve money problems with money.

 

[imsayin]

and yet people are upset that Oprah is trying to motivate people by putting them on a money diet?

I think the problem people have is that Oprah is a hypocrite. Doing a show about getting out of debt is fine, IF you didn't promote the $50 pajamas that you love. People see Oprah's favorites and think they should have them, even if they can't afford them. Then, she wants to help get them out of the debt she helped get them into.

 

[Chicago526]

I think the problem people have is that Oprah is a hypocrite. Doing a show about getting out of debt is fine, IF you didn't promote the $50 pajamas that you love. People see Oprah's favorites and think they should have them, even if they can't afford them. Then, she wants to help get them out of the debt she helped get them into.

Anyone that pays $50 (that they can't afford to spend) for pajamas deserves whatever financial mess they are in. Why is it Oprah's (or anyone else's) fault that people run out and buy over-priced garbage that they can't afford? That's like blaming food comercials for people gaining weight. "But I saw that Big Mac on tv, and the guy who was in the ad was skinny, and it looked so good I just couldn't resist!"

Oprah comes accross products she loves. She shares these things with her audiance, so that those that CAN afford them can decide if it is something they would like, too.

Personal responsiblity. It's great, more people should try it!

 

[pearlieq]

I firmly believe in personal responsibility, but I do think it's pretty hypocritical for a show so bent on consumption to do a token episode about debt reduction. If she were really so concerned about personal finance, why would she be shilling for product after product? It's not like her "Favorite Things" is a rare segment, it's a frequent and expected part of the show.

Oprah really doesn't do much for me one way or the other, but I can see a justification for crying foul.

 

[imsayin]

Anyone that pays $50 (that they can't afford to spend) for pajamas deserves whatever financial mess they are in. Why is it Oprah's (or anyone else's) fault that people run out and buy over-priced garbage that they can't afford?

I didn't say it was Oprah's fault if people mismanage their money. I said she was a hypocrite. I agree that everyone is responsible for their own situation, but Oprah is well aware of her marketing abilities and her audience. I would venture a guess that the majority of her audience either can't afford the products she is taunting or may be going out of their means to attain them. Again, not Oprah's fault, but hypocritical, IMO.

 

[dvcgirl]

I didn't say it was Oprah's fault if people mismanage their money. I said she was a hypocrite. I agree that everyone is responsible for their own situation, but Oprah is well aware of her marketing abilities and her audience. I would venture a guess that the majority of her audience either can't afford the products she is taunting or may be going out of their means to attain them. Again, not Oprah's fault, but hypocritical, IMO.

Well, I'm a pretty big capitalist, but I'd have to agree with you for one reason. Oprah constantly touts her television program as "life changing television". And so bringing out her favorite things in a marketing ploy and then beginning a new series called "Oprah's New Diet for America" for debt reduction is indeed hypocritical.

However, personal responsibility is really a huge missing element in our society. Nobody is forcing folks to go to the mall to purchase things that they can't afford. They choose to do so, and so must pay the piper. There are no signs outside of The Burberry, Tiffanys or The Grand Floridian stating what your income *should* be in order to comfortably afford the bill....and all three businesses are more than happy to take your money. Whether or not you can afford it is your affair.

 

[disneysteve]

personal responsibility is really a huge missing element in our society. Nobody is forcing folks to go to the mall to purchase things that they can't afford. They choose to do so

This is really the bottom line for this whole discussion as far as I'm concerned. To blame Oprah is ludicrous.

I watch the favorite things show. And I watch plenty of other tv and see lots of commercials. But I don't then run out and buy anything that I saw promoted on tv unless I feel it is something that I really need or, perhaps, really want and can comfortably afford without taking on any debt or otherwise impacting my overall financial situation.

Someone used a comparison to McDonald's commercials and I think that's a good analogy. I see plenty of food commercials but don't run out and eat those things because I know they are lousy for me.

I make a conscious decision to live below my means and I make a conscious decision to eat a healthy diet. If I did otherwise, the only one to blame would be me, not the advertisers, not the talk show hosts, not the retailers and not the restaurant owners.

 

[dizcrazy]

(deleted)

 

[dizcrazy]

I could not agree more! Oprah does do a fun show of Favorite Things and maybe that encourages people to buy those products but . . . if someone does not have the means, they should not induldge! To blame Oprah is ludicrous.

And isn't Oprah bringing in financial planners and such and showing us three "real" families and their effort to reduct debt? Not the same as her giving advice on budgeting.

Oprah gets on kicks about things - an example is the book club. But just because she reads the book doesn't mean you have to!

 

[sk!mom]

This is really the bottom line for this whole discussion as far as I'm concerned. To blame Oprah is ludicrous.

I watch the favorite things show. And I watch plenty of other tv and see lots of commercials. But I don't then run out and buy anything that I saw promoted on tv unless I feel it is something that I really need or, perhaps, really want and can comfortably afford without taking on any debt or otherwise impacting my overall financial situation.

Someone used a comparison to McDonald's commercials and I think that's a good analogy. I see plenty of food commercials but don't run out and eat those things because I know they are lousy for me.

I make a conscious decision to live below my means and I make a conscious decision to eat a healthy diet. If I did otherwise, the only one to blame would be me, not the advertisers, not the talk show hosts, not the retailers and not the restaurant owners.

ITA-

Oprah is above all interested in making a TV show that people will watch. I will watch today because I am interested in personal finance. I will try to get DS21 to watch because I want him to make wise choices. A show like this can be a cautionary tale for him.

My only problem with Oprah is that she talks too much. Have you noticed that as she has become a big celebrity she apparently considers herself to be an expert on many topics. I find it really annoying that she will have an expert or another celebrity on and then she talks more than they do.

 

[MEM]

I did a sneak-peek at today's show on Oprah's website. I looked at each family's profile and have to say each family appears to be totally lacking in self-discipline and are in denial for the most part. These are extreme cases like the one woman who spends $7,000 a year (yes, seven thousand) on HER HAIR!!! She also admitted to forging her husband's signature to buy a new truck and doesn't cook so she spends $100 a day on takeout. All on an income of about $100K per year.

I suppose they need these kind of extreme cases to get people to tune in, but I certainly cannot relate to them.

 

[Free4Life11]

Look, all I am saying is you cannot control interest rates. If you have a $1000 loan and the interest goes from 5% to 10% due to the feds raising the rate, it sucks, but at least the government is going to let you deduct the additional 5%. You know the government could stop allowing people to deduct interest. I was just trying to put a positive spin on something because frankly there is too much whining and complaining in this country (and yes I am guilty of it a lot but I am trying to be a more positive person). I didn't realize that was such a bad thing.

I saw the preview and oh no, not the Latte Factor guy! I don't know but the "Latte Factor" has always annoyed me.