If you had to grade Americans on their knowledge of personal finance, what grade would you give them? Well, earlier this year the National Foundation for Credit Counseling, a non-profit organization that aims to educate the public on financial responsibility and provide guidance for those struggling with bankruptcy, mortgage payments, and other matters of money, asked more than 2,000 adults in the United States to grade themselves in the NFCC's annual Consumer Financial Literacy Survey. The result: More than 40 percent of the participants gave themselves a grade of either C, D, or F. Not great. Furthermore, a bit more than 60 percent of the participants admitted that they don't even have a budget.
"Americans are great spenders and lousy savers, so we really need to make it as appealing to save as it is to spend because spending is so often just a temporary high," says Gail Cunningham, a spokesperson for the NFCC, which has been around since 1951.
That temporary high, though, is rather tempting. There are just so many things to buy and so many lines of credit available to buy them now. But this attitude can obviously lead to trouble. Last September, for example, Bloombergreported that consumer debt (i.e. credit cards, auto loans) is reaching record levels. If America does have a spending problem, where can the nation look for help?
In a recent episode, a man extracts one of his wife's molars using a pliers-like tool the couple bought at a yard sale. By circumventing the dentist, they saved $175.
Enter TLC's Extreme Cheapskates, a reality show that documents the, um, extreme lengths some eccentric yet inventive people go to avoid parting with their money. If you're not familiar with the series—which ended its third season last month—that can mean removing grapes from the vine so that they weigh less at the cash register, permanently keeping the tags on T-shirts so they can be returned when no longer in style, cooking lasagna in the dishwasher alongside a stack of dirty dishes, purchasing a wedding dress from a pawn shop, and straight-up dumpster diving for hidden treasures, such as folding chairs. In a recent episode, a man extracts one of his wife's molars using a pliers-like tool the couple bought at a yard sale. By circumventing the dentist, they saved $175. (Some cost-saving methods depicted on Extreme Cheapskates are significantly more extreme than others).
Let's be clear: Extreme Cheapskates is a silly, light-hearted show with all the bad acting, reaction shots, cheesy sound effects, and staged scenes typical of reality TV circa 2014. This is neither cinéma vérité nor the type of stuff that earns Oscar nominations.
That said, in a very serious way, Extreme Cheapskates shows what's possible if you're willing to be labeled a, um, cheapskate. Yes, some people on the show tend to mooch off their friends and family to survive, and sometimes it can be cringe-inducing to watch someone haggle with a local shop owner over items that are already heavily discounted, but overall, it's kind of inspiring to see how these frugal folks learn to live with less. They embody the reduce-reuse-recycle mindset. They set limits and stick to them. They're often rather happy, too, as though they're floating in a stress-free lake of financial tranquility. While reality TV is littered with Kardashian types that represent little more than faux controversy and conspicuous consumption, the people of Extreme Cheapskates entertain in a quirky manner that can charm the imagination into thinking about unorthodox ways to save a buck or two.
"I think within every single segment there's something in there where you would say, 'You know what? I would try that,'" says Mike Kane, executive producer of Extreme Cheapskates.
According to Kane, the series got its start when TLC executives decided they wanted to expand on the success of Extreme Couponing, another TLC franchise that follows people who feverishly collect coupons in the hopes of buying hundreds of dollars worth of groceries and household items for next to nothing. Eventually, TLC brass settled on profiling people willing to do almost anything to save money on almost every aspect of existence. And unlike Extreme Couponing, which still embraces the act of extreme consumption for savings sake (at times resembling a cleaner, more organized version of TLC's Hoarding: Buried Alive), Extreme Cheapskates defies otherwise standard consumer habits when they don't fit the financial bottom line.
"It becomes a bit of a contest for these people," Kane says. "They start off with good intentions to save money, but it becomes a challenge to them. They continue to up the ante in every single area of their life."
For most people, the intention of saving money usually ends in failure. This is especially true of the current holiday season, for which a recent Gallup poll indicates that 54 percent of Americans have already spent or plan to spend around the same amount on gifts as last year, with most of that going toward clothing, gift cards, and toys. Only 29 percent of the public plans to spend less than last year, while 18 percent plan to spend more. (Last September, the National Retail Federation estimated that the American public would spend $7.4 billion on Halloween. That's B as in billion on costumes, decorations, and candy.)
Tonight, TLC plans to air its Extreme Cheapskates holiday special, which features used, make-up-smeared cotton balls converted into snow-like decorations, a turkey dinner comprised of severely discounted pieces of chicken, and a couple who hosts their annual Christmas party on December 28 because that's when stores are desperate to unload their suddenly out-of-date merchandise and neighbors are likely to discard their perfectly fine evergreens in back alleys. A thrifty woman showcased in the episode says Christmas is her favorite holiday, but it's still not important enough to dole out the big bucks. Another woman puts it more poetically: "The spirit of Christmas is giving, and you don't need to spend money to feel that."
As for the pressure to conform to tradition or give in to the bombardment of advertising this time of year, Kane says the subjects in Extreme Cheapskates' holiday special take the following approach: "They completely ignore it."
It's true that a person drowning in debt is not always the sole cause of his or her predicament. A bad economy or injury on the job can lead anyone into hard times, and predatory lending does happen. Plus, the societal pressure on people to build an identity through a brand or live a so-called normal life as defined by the media, or whoever, can encourage many to live a lifestyle well beyond their means.
While Cunningham, the NFCC spokesperson, doesn't deny the existence of negative influences on your personal budget, she's also a staunch believer that people have the power to do better. Extreme Cheapskates is proof of that. "Certainly, the silver lining to the recession was that people crawled back into the driver's seat of their personal finances, where they should have been all along," she says.
As for buying cartons of eggnog and decorating the house with miles of lights this holiday season, Cunningham advises people to do what they're comfortable with and not worry about keeping up with the Joneses, since the Joneses are probably very much in debt, anyway. As she puts it: "Digging a deep financial hole for yourself and your family is not a gift to anyone."