Hundreds Taking Part in Debt-Dropping Challenge

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 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's Debt Diet tips:

The Drop Your Debt Challenge ends April 4.

$mart Money: Navigating the Road to Financial Freedom
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