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Accident inspires budgeting strategy

Marketplace Staff Jan 8, 2010
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TEXT OF INTERVIEW

Tess Vigeland: Much as we like to think we’ve planned for life’s contingencies, we really can’t. But there’s that whole turning lemons into lemonade idea to fall back on when things go sour.

Alice Wood has her own lemonade stand, so to speak. It’s called Wealth Watchers. And she’s got a new book about a traumatic experience and the budgeting system that sprang from it. Alice welcome to the show and tell us what happened.

Wood: Well, I was actually coming home from a ski trip with a friend of mine and the aircraft we’re on took off and something went wrong. The airplane didn’t pressurize and when an airplane hits 10,000 feet, the oxygen masks automatically deploy. And that happened to us. And after a few minutes, the flight crew came through wearing portable tanks and masks and you know, it was just surreal and you just thought, “Man, this is probably not really good.” And I remember thinking, “Gosh, I think there’s a good chance we’re all going to die here.” And I took the straps of my purse and wrapped them around my hand really tight, so my IDs would be with my body, which I’m sure is irrational; my body probably would’ve been everywhere.

Vigeland: But this is actually your training as a… you’re an estate planner, right?

Wood: Right. We’re always preparing people to die and then here I am, facing that. And so probably that kicked in.

Vigeland: Well, so obviously, there’s a happy ending to this, because we’re speaking with you. But for the next several days, you started to experience some pretty severe issues.

Wood: I didn’t really know something was wrong until I got home. And I kissed my husband and then I realized my whole face was numb, like every place the oxygen mask had been, it was like I had a shot of Novocaine. It was ultimately a hypoxic brain injury. I went too long without enough oxygen.

Vigeland: You went too long without enough oxygen. So what did that do to your brain?

Wood: Well, I think that the synapses weren’t firing correctly, and I couldn’t say my kids’ names right, I couldn’t do simple math, I had trouble driving. It was probably a little bit like drunk driving; I was just impaired.

Vigeland: Well, let’s get to how this affected your finances. As you mentioned, you’re an attorney. Tell us a little bit about your financial acuity prior to what happened.

Wood: Well, I grew up the daughter of a bank president, so everybody in our family was raised to be frugal. So when I — after the brain injury — tried to go on with my life, I realized that I’d become horrible with money. We started carrying a balance on our credit card and that’s not something we would’ve done. And when we were carrying a balance on our credit card, I told my husband, he mentioned, “Well, do you think we should get on a budget?” And at the time, I kept thinking, “This is like a cold, I’m going to get over it. This is just a short term thing.” It turns out, when you have a brain injury, it impacts your executive functioning. It’s your ability to make good decisions and mine was just lost.

Vigeland: At the same time, you talk in the book about the fact that you also, not only started having different spending patterns, but you gained weight and you ultimately went to Weight Watchers. And this is where you had a bit of an epiphany.

Wood: I did. I still don’t know what happened to my weight. I’ve always been pretty thin, so I don’t know if I ate, and I forgot I ate, and I ate again or if my metabolism was changed by the trauma. But at Weight Watchers, you set and track a daily goal for what you eat, and I lost all the weight. And I thought, “Gosh, I would bet that would work for money.”

Vigeland: I love the story that you tell about when you went to Weight Watchers, and they wanted to acknowledge you for losing, I think it was 10 or 11 pounds. And you looked around the room and thought, “That’s nothing compared to the people here who lost 100 pounds.” Share with us what the group leader said there.

Wood: The group leader said, “Wouldn’t it have been smart if all of us had come in when we only had 11 pounds to lose.” And it’s true and it makes you think with money, wouldn’t it be nice if people reached out for help before they get in too much trouble.

Vigeland: So with that as background, let’s now turn to the Wealth Watchers program. The key here, as you mentioned, is the similarity to Weight Watchers, where it’s daily journaling. What is your lesson here, what is different about your program?

Wood: Well, what we do and what I’ve never seen anybody else do, is break it down to the day. And there is a daily number; you just have to calculate it. You have to figure out what you’re bringing in, what are all your expenses that you can’t do anything about and then what’s left — that’s your spending money. And to break that down and divide it by 30 or 31 days and to have a daily goal. That was a big deal to me, and it’s helped other people too.

Vigeland: Yeah, I guess that is different from just keeping track of what you’re spending. I think we’re all familiar with, say, a monthly budget, but you’re saying actually break that down into individual days, so that on every single day, you know what you have to spend?

Wood: That’s right. Like say, in our monthly budget, I have $3,000, roughly, of spending money a month. So that roughly breaks down to $100 a day. But when you start off day one of the month thinking you have $3,000 to spend, that seems like a lot. The idea is to get to the end of the month and not have spent more money than you made.

Vigeland: You know, nine years passed since the incident with the airline, when you look back at this, is there any sense of a silver lining to something that so drastically altered your life?

Wood: Well, I can remember after this happened, I’d be laying in bed at night, just wishing somebody would tell me I was terminal. I couldn’t imagine going through the rest of my life living in this fog. And I thought I’d never say that anything good came out of it. It was just nothing but a horrible thing to go through.

And now I have to say, you know, I think this is my purpose in life. I think I’m out here to say, “You know what? This is a really simple idea. People should spend less money than they make.” And that’s how we should frame it and that’s what the goal should be, and it’s just a simple message that I think we need to make it a popular, simple message.

Vigeland: Alice Wood is the author of “Wealth Watchers: A Simple Program to Help You Spend Less and Save More” and we’ll have a link to her Web site on ours. It’s Marketplace.org.

Alice, it’s been great talking to you. Thanks so much for sharing your story.

Wood: Thanks Tess. Thanks for having me on your program.

Vigeland: Tell us how you’re planning to save on daily costs this year.

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