Bank of Mom and Dad: Mooching Loses Friends

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Each week on SOAPnet’s new original reality series Bank of Mom and Dad, a twenty-something woman drowning in debt must pay the ultimate price ... letting her parents move in! With the assistance of money coach Farnoosh Torabi (that's me), Mom and Dad will teach their daughter to rethink her spending habits and transform her relationship with money.

This week we meet 24-year-old Dina Davis, an aspiring New York model and actress who needed to get her act together. She lacks focus and must learn to prioritize her finances. She barely makes enough money to survive less than $600 a month all while living in the most expensive city in the country. Dina has roughly $30,000 in credit card debt and cannot afford a place of her own. At the start of the week Dina is best known for being a moocher, couch surfing at friends' houses and finally ending up living with her boyfriend out of desperation.

A majority of that debt about $20K has been charged off, meaning the credit card companies have written her off as a dead-beat borrower and sold her debt to collection agencies. She gets a half a dozen calls from collectors daily, while her credit score’s taken a severe beating, falling below 500.

While ignoring her credit card bills Dina spends more than half her monthly income (or close to $400) on food and dining out. She refuses to work odd jobs or any job that will interfere with potential casting calls throughout the day.

Here’s what her mom, Uncle Stewart (standing in for Dad) and I tried to instill in Dina:

Get a J-O-B. It is possible to pursue an acting career while keeping a steady job, we urged. Do you think all aspiring actors sit around their phones? With $30,000 in debt, Dina can’t afford not to work. She needed to learn how to juggle her dreams and her immediate priorities, namely paying for her necessities and her debt. Dina was introduced to a couple of job options that would allow her flexible schedules so that she could attend auditions in the middle of the day if need be. It’s not certain if Dina will follow through.

Quit the Mooching. Dina’s dependency on people is affecting her relationships with those closest to her. Mom and Dad invite Dina’s best friends and boyfriend, Colin, to confess to Dina how her reckless spending and debt is coming between them. Dina realizes how her poor decisions are effectively pushing her loved ones out of her life. That meeting was her most emotional moment all week.

Prioritize Your Debt. This was a biggie. After so many collection calls a day Dina had thrown in the towel with regards to her debt repayment. She was frustrated and knew not where to start. My advice to her was don’t let the agents get to you. If they’re harassing you and calling you continuously you must ask them to stop. The proper language is described on the Federal Trade Commission’s Web site at ftc.gov. You have rights as a consumer and you shouldn’t be inundated with nasty phone calls from collectors.

(Want to know all of your rights if you fall into debt? MainStreet has the answers.)

That said, Dina needed a debt repayment strategy. My advice: Start by paying at least the minimums on every card and put extra toward your card with the highest interest rate and aim to pay that down the fastest. The faster that debt is gone, the more interest you will save.

As for her charged off debt, Dina will need to start saving so that she can call up the collection agencies and strike settlement deals.

Catch a new episode of Bank of Mom and Dad Wednesdays at 10 p.m. on SOAPnet.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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