Personal finance boot camps fight debt with hard-nosed approach
No-excuses programs can help some consumers, but they aren't for everyone
By Lisa Rogak
They're probably never going to force you to scrub the latrine, hike for miles in the driving rain or call you a maggot, but personal finance boot camps promise to use some tough love to help you gain control over your finances and debt once and for all.
These boot camps come in the form of online or face-to-face classes, exercises and daily check-ins, but what they all have in common is they have a no-excuses, take-no-prisoners approach. Just like a regular military boot camp, your usual excuses will be laughed at and met with an on-the-spot challenge to cut your personal spending by 10 percent more -- right now. Classes are usually led by one or two hard-nosed "commanders" who challenge you to live within your means, stash the credit cards, cut spending and stick to a budget by confronting you with the cold, hard truth that the numbers can't hide.
Some boot camps are run by financial planners and investment experts while others are run by banks and credit unions for their customers. Even nonprofit community groups, from YMCAs to churches, are getting into the act.
The ideal recruit
For people who have grappled for years with their debt -- be it of the credit card variety or any other kind -- boot camp may be their last resort.
A boot camp will usually provide "recruits" with very specific tasks to allow them to learn about their past mistakes while building up skills for handling their finances in the future. Reeta Wolfsohn, CMSW, founder of the Center for Financial Social Work believes the best boot camps combine increased awareness with knowledge, skills and ongoing support to create long-term financial behavioral change.
Stacy Francis runs a Bounce Back Boot Camp for women where she provides participants with weekly coaching and group mentoring calls, worksheets and materials. Campers are required to provide her with weekly progress reports that show the good, the bad and the ugly.
Campers will probably be asked to bring credit card and bank statements, a list of assets and debts -- all of them, no matter how small -- and a credit report and score from the major credit bureaus, along with pay stubs and past tax returns. They'll also be asked to write down everything they spend each day, down to the quarter for the parking meter.
Some boot camps also include classes on the nuts and bolts of personal finance and credit management, such as reducing debt and avoiding scams, but most campers are already too familiar with the basics of personal finance and instead need someone who will, well, kick a little butt.
Regardless of the format, the philosophy behind the boot camp is that once you see it written down in black and white, you can't avoid the truth. And you'll have no more excuses.
|Financial boot camps around the nation|
The following is a list of places that hold or have recently held financial boot camps. Visit their websites for more information.
Pass or fail
Like all self-improvement programs, the program is only as good as what you put into it, despite having an instructor bark in your face and directly confront you about your greatest financial shortcomings. With that said, once you graduate from the program and are on your own, the voice of your drill sergeant may still ring in your ears for months to come. And that's a good thing, especially when you find yourself tempted by that big-screen TV or those pricey shoes.
Since there are really two parts to these workshops -- attending the workshop, then implementing what you learn -- the success rate varies. "For individuals who simply attend and don't put their newfound knowledge into action, the success rate is very low," says Travis W. Freeman of the Foundation for Personal Financial Education, who teaches a financial boot camp to corporate and community groups in St. Louis.* "For people who implement what they've learned right away, the success rate can rise to around 90 percent."
While a financial boot camp can serve as an incredible motivation for people to finally get serious about their finances, Freeman believes that the key to success is the support a camper receives after the program ends. That support can take the form of calls, e-mails, personal visits or other means of communication, but these periodic check-ins and status reports are crucial to a camper's long-term success.
Is it legit?
If you're thinking of signing up for a boot camp, Wolfsohn suggests that you first identify exactly what you want to learn and achieve from attending the camp. "Compile a list of questions based on those goals and objectives, then research the camp and the staff to determine whether its mission and curriculum appear a good match," she says. "In today's economy, everyone is jumping on the financial-education bandwagon, which is why it's even more important to check credentials of a boot camp before you sign up."
Three important questions to ask:
- What does the curriculum include? Which topics will be covered and how much time will be devoted to each topic? Most campers are there because they need a wake-up call about their debt situation and want to learn concrete steps to take on how to tackle it, not feel-good elementary advice on Personal Finance 101.
- What's the experience and background of the staff and teachers? Depending upon who's teaching the course -- whether an accountant, financial planner, banker or credit counselor -- the content and style may differ since each profession brings a different outlook to the table.
- What do previous campers have to say about the program? Francis suggests checking the credentials by reading testimonials from others who have participated in previous camps. While you can ask for references, it's also a good idea to go online and Google the name of the program to search for campers who may have good -- or bad -- things to say.
Freeman says that if the camp tries to steer campers toward a particular product or company, beware. "A financial boot camp should mention zero products, services or companies, and is meant to provide only academic information built to educate and motivate the audience," he says. In that case, he advises prospective campers to run, not walk, in the other direction.
The cost of a financial boot camp can range anywhere from free to $500 or more, so it pays to shop around.
Is it for you?
While boot camp is exactly what some people need, Wolfsohn cautions that not everyone will benefit from its take-no-prisoners approach. In fact, it can do real harm in some situations. "A tough-love approach to money would not be a good approach for anyone struggling with or feeling the shame, isolation and depression of foreclosure or bankruptcy," she says. "Their vulnerability would most likely make such an approach demoralizing and negative rather than engaging and positive."
But if you've exhausted all other possibilities and are still mired in debt, maybe a boot camp is just the shock you need to start you on the straight-and-narrow -- and keep you there.
See related: Credit Card Help: 14 key factors when considering bankruptcy, A guide to navigating bankruptcy, Bankruptcy filings, state by state, 2005 to 2009, Credit Card Help: Preventing or handling debt, Credit Card Help: 8 things you must know about credit card debt, Credit Card Help: 10 things you must know about credit reports and scores
Updated: September 9, 2009
- Debt settlement: Is it right for you? – Settlement offers one solution to severe debt, but beware false promises and know the downsides ...
- Rejected for credit: When to take no for an answer – Being turned down can be crushing, but it can be a sign you need to take seriously ...
- Paid a charged-off debt; now what? – It’s not enough to just pay a charge-off and forget about it. There are some cases in which the information about the paid charge-off doesn’t get to the credit reporting agencies ...