With the hope that thousands of dollars in prizes will come their way, hundreds of Chicagoans are competing in a battle to reduce their debt and increase their savings.
The "Drop Your Debt Challenge" offered by financial management website Mint.com comes complete with tips and ideas to coach participants.
Chicago ranks fourth among cities nation-wide with the number of debt-droppers.
"We were about $17,000 in debt fall of 2009, and now we should be paid off by end of February," said Lori Biancofiori.
She used her credit card to fund a wedding and then her husband lost his job. Now she's in the race for financial fitness.
"Just to hear what people do to save money helps you," she explained.
Through the challenge, she's cut her allowance down to $20 dollars a week and uses coupons for everything. She said 35 percent of her income goes toward debt reduction.
"We couldn’t go over, and if we did we ate macaroni and cheese," she said.
Biancofiori said it takes about 10 minutes per day to calculate her budget. Learning to not buy what she and her husband don't really need was the best thing she's learned, she said.
Here are Mint.com's Debt Diet tips:
- 1. Spend less than you earn. To do this, you need to see where you spend. Whether it's with free online software like Mint.com, a desktop solution like Quicken or with pen and paper, getting a true, clear picture of where money goes is the necessary first step toward better financial decisions.
2. Budget. To keep budgeting simple -- and make it something you can stick to -- Mint recommends finding one or two problem areas where you can cut back. Most people overspend in shopping and food & dining. www.mint.com/personal-budget-planner/:
3. Make money work for you. Optimize rewards and interest rates on all your financial relationships or you’re straight up leaving money on the table.
4. Protect your downside. Too many people were caught unprepared for job loss in these past years, without an emergency fund or the proper insurance to keep them safe. Be sure you’re prepared for the unexpected.
5. Surround yourself with like-minded people. Whether it's weight loss or debt reduction, it's easier to stick to your goals if you have some form of support. Grab a group of friends and commit to "dining in" once a week or plan a staycation with your significant other, or join a support group in your area -- mint.promo.eprize.com/dropyourdebt/
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