The Debt Escape Plan: Lessons From a Former Credit Junkie

The Debt Escape Plan: Lessons From a Former Credit Junkie

The Debt Escape PlanBeverly Harzog knows firsthand what can happen when you dabble with carefree credit card spending.

In her first book, “Confessions of a Credit Junkie,” the CPA and consumer credit expert broke the silence on a long-held secret: As a young professional, she racked up more than $20,000 in credit card debt—a transgression that took her two years to dig out from.

This February, Harzog, 57, has a new book hitting shelves: “The Debt Escape Plan.

So we sat down with her to discuss what she's learned about breaking free of debt—and why she believes that a successful escape plan comes down to customization.

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LearnVest: What prompted you to write a second book about getting out of debt?

Beverly Harzog: "In 'Confessions of a Credit Junkie,' I mostly focused on ways to avoid getting into debt—but I heard from many readers who said they were already there and needed advice.

Getting out of debt is hard work, and 'The Debt Escape Plan' is all about giving people the structure they need to survive it. I hope to make folks feel like they aren't alone, and that this can happen to anyone."

You’ve been adamant about the futility of a one-size-fits-all debt-reduction approach, such as giving up your daily latte. Why?

"Your debt plan has to be custom-made. If it's not tailored, you won't stick with it. So keep the things that are important to you—but realize they aren't free. If you really want that $3 latte, you’ve got to cut $3 somewhere else.

"Once you start to see your debt number go down, you'll feel an adrenaline rush. This gives a positive emotional momentum that propels you forward—and keeps you from buying that new pair of boots."

Personally, I like expensive coffee, and no one is going to tell me I can’t have it. I’ll drink cheaper wine, so I can have my coffee. You have to make deals with yourself."

You also talk about the importance of structuring your escape plan according to your “money personality.” Why is that an effective strategy?

"Personality plays a huge part in debt reduction. When you pinpoint your money personality, you may begin to realize why you’re in trouble.

I've included both money-personality- and learning-style quizzes in the book to help people decide on the right tools to use to get out of debt—and shore up weaknesses.

And the point isn't necessarily to encourage people to change over time to be more like another type. If you're a 'Terrified Tightwad,' for instance, you might always be that way. My goal is to help those people set up a success plan based on the characteristics of being a tightwad."

RELATED: What Your Personality Type Means for Your Money

You cover medical debt extensively. What’s one actionable way someone can help minimize this burden?

"Medical debt is tough. You often have it because you had an unexpected health crisis—not because you overspent at Macy’s.

If a good portion of the debt is on your credit card, call up your issuer and ask to speak to the hardship department. They aren’t publicized, but almost all credit card companies have them.

They can help you by lowering your minimum payment or your interest rate. I recommend writing down bullet points before you call, so you’re organized when you ask what they can do to help.

Once they come up with a plan, stick to it. They don’t usually last for more than a year, but during that time you can really make progress chipping away at that debt."

How did you motivate yourself to stay on track while you were paying down your own debt?

"Reaching goals motivated me. Every week I reviewed my progress. I’m a visual person, so I had a bulletin board where I recorded the monthly totals of what I’d repaid so far.

Once you start to see your debt number go down, it’s very important to keep going. You'll feel an adrenaline rush. This gives a positive emotional momentum that propels you forward—and keeps you from buying that new pair of leather boots."

RELATED: 5 Motivating Money Books You Can’t Afford Not to Download in 2015

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