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Sharing tales of money woes and wins

He paid $600 for a treadmill . . . and used it as a clothes rack. See more stories like this one on Spendster.org

TEXT OF STORY

SCOTT JAGOW: We've always been told to save for a rainy day. Well, in case you haven't notice, it's coming down pretty hard right now. And the problem is most people didn't save.

In fact, the average household is more than $9,000 in debt. Twenty percent of our incomes goes to paying that off every month, instead of going into a savings account. But there is help out there -- people trying to resurrect the lost art of saving.

Marketplace Money's Eve Troeh reports.


EVE TROEH: OK, time to fess up. That hot pink dress you never wore? That treadmill turned clothes rack? What did it cost? C'mon, you can tell me. Or you can tell the whole world -- at Spendster.org.

SPENDSTER.COM AUDIO CLIP: This coffee maker is spotless, as you can see. It's never been used. That's why. And if you look over here -- golf clubs. Nice, right? Guess who doesn't play golf.

Spendster users upload video confessions about over-buying, like this one. A ticker adds up all the money wasted. More than $200,000 so far -- and the site's only been up a couple weeks. The stories are all too relatable.

TED BECK: They make us squirm 'cause we're all spendsters.

Ted Beck is CEO of the National Endowment for Financial Education. He started Spendster. The idea was born on a coffee break. Beck mentioned a drawer at home full of unused stuff, and wondered how much it was all worth. Everyone chimed in with their own stories.

BECK: It went from a drawer to a closet to a garage, and we all were kind of laughing and outdoing each other. We were all learning from it. This wasn't a little secret that each of us had.

The site adds a moral to these tales of consumption. You enter what you spent on something you didn't need. And it tells you what you'd have now if you'd invested or saved that money.

That $25 on coffee last week? That could've been $120 for retirement. Again, Ted Beck.

BECK: Our goal is to turn that into a teachable moment, where we can bring back the idea of living within your income.

It's a show-don't-tell approach. And more people are adopting it.

Sites like Smartypig.com. It's an Internet bank with a social networking twist. You start an online savings account with a goal in mind -- a vacation, an iPod, textbooks. Friends and family can chart your progress, or even help you out. But you only get the cash when you meet the goal.

Musette Bracher is a vice president at Government Employees Credit Union in El Paso, Texas. She says turning a spender into a saver is a long process. She compares it to dieting.

MUSETTE BRACHER: We all try diets on our own. It's just too hard to do. But put it in a group setting. Put it in a competitive-type setting. And the results are amazing.

Bracher started a Savings Challenge program in El Paso last year. It's like the reality show "The Biggest Loser" but with saving money instead of losing weight. Six credit union customers get personal training for their pocketbooks, and check in over a year to measure their progress. The winner gets $10,000. And the stories are all documented on local TV -- in English and Spanish.

Gloria Aguilar, a 53-year-old single mom, had about $30,000 in credit-card debt when she started the Savings Challenge.

GLORIA AGUILAR: And I was living paycheck to paycheck. As a matter of fact, at the beginning of the Savings Challenge, I think that I bounced like three checks. And at that point I wanted to give up.

The contest made her take a hard look at her spending: $500 a month on fast food, impulse buys. . . . She took a second job and chipped away at those bad habits.

By the end of the year, Aguilar paid almost all the debt, and she won the challenge. Now she smiles at the tellers in the credit union.

AGUILAR: And I feel pride when they look at my accounts. Before it was embarrassing.

Creator Musette Bracher says the contest is more than a feel-good thing, though. It's a research tool. Contestants like Gloria Aguilar show it's not that people don't want to save. They never learned how.

Bracher: Regardless of education, income, they don't know where to start. And it really told us that we needed to quit being a preacher, if you will, and show people actually how they could start making changes in their financial habits.

Bracher believes financial educators and financial institutions need a makeover of their own. If they relate to people's money problems instead of punishing them, more will come back into the savings fold. Then the coffee break conversation might be about how much we're saving, not how much we're wasting.

In Los Angeles, I'm Eve Troeh for Marketplace Money.

About the author

Eve Troeh is News Director at WWNO-FM in New Orleans, La., helping build the first public radio news department in the station’s 40-year history. She reported for the Marketplace Sustainability Desk from 2010 to 2013.
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well ive been reading a little about smartypig, and it sounds good, i am 70 years young, did not make a lot of money in my life but had many intresting jobs over the years,, now im left with a low end social security check each month, i have found a part time job ,which i feel is a great thing at this age, and would like to start putting away a small amount, monthly, so when the kids and grand kids need help, which they do now and then , i would be able to help them some what,, that would make a old man feel good, and they would be very happy for the gift of a few dollars,, who would,nt in this day and age, thank you for readying my thoughts KEN

The tanking of our 401k's started alot of newly open discussion about actual spending and savings habits among my group of coworkers. Our company was spun-off by a large corporation a few years ago and our pensions frozen about the same time. Our industry suffers little from economic downturns like the one we are in now, so it has always been easy to just keep on spending as long as we are earning. However, these days when we are so much more reliant on 401k savings to see us through our "golden years" , it seems appropriate to share information that we used to keep to ourselves. The thrift exhibited by my own parents throughout their lives gives me a good example to follow, hopefully sites such as Spendster will inspire more of us to really count the costs of our wants and weigh them honestly against our needs.

Spendster.com and Smartypig.com are good websites as far as they go, but is there a website where folks can share their ideas on a.) creative & easy ways to save money (I charge myself $2 per check--write the check for the correct amount, but subtract that amount plus $2 more from my checkbook balance which gets added to my "checkbook savings" shown in the reconciled column), and b.) creative ideas in which to earn extra money? I would think a site where folks could share tips along those lines would be really popular.

Our country needs a makeover. Seventy percent of our economy is based on consumer spending rather than on actual production. If everyone dramatically reduces their spending, the economy will shrink and jobs will go with it. We need to dramatically re-vision our place in the world as producers rather than consumers. Defined as consumers, our lives are just as meaningful as that drawer or garage full of stuff.

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