The King and Queen of Debt

John Leland published a fascinating article in today’s New York Times.  Debtors Search for Discipline via Blogs describes a new trend, blogging for willpower.  People publish the intimate details of their of personal debt in order to use the exposure and reader feedback to help them control their debt accumulation.  The bloggers believe that by forcing themselves to publish everything they spend, they will become more conscious of their spending and have a stronger incentive to do less of it.  As Tricia of www.bloggingawaydebt.com said, “I think about this blog every time I’m in the store and something that I don’t need catches my eye.”

For those of us who are interested in debt, a few interesting points emerge.  First, for these bloggers, stigma is alive and well.  They are using the Internet as a clever way to circumvent it and still obtain the help they need.  Many of these bloggers are revealing private information they conceal from their families and friends. One couple refused permission to use their names in the article because, “We don’t want our parents to find out and kill us.”  This same couple is even sharing information they find difficult to discuss with each other in person.  The self-titled “King and Queen of Debt” say that, although they have good communication skills in other areas, it is only by writing the blog that they have been able to communicate about their finances.

Second, these bloggers have developed a self-control mechanism that aligns perfectly with cutting-edge research in behavioral economics. Just yesterday, I read an article by economists George Lowenstein and Ted O’Donoghue in the Chicago Law Review's Winter 2006 Symposium. In "We Can Do This the Easy Way or the Hard Way": Negative Emotions, Self-Regulation, and the Law, Lowenstein and O’Donoghue explain that people use negative emotions to help resist temptation.  When the benefits of a decision will be realized immediately, but the costs will not occur so soon, people experience temptation, because we tend to weigh present costs and benefits more heavily than future ones. (Interestingly, we have the same experience when the costs are immediate but the benefits are delayed. Think the temptation to procrastinate on a large project.)  One way people attempt to even out the scales and resist temptation is by imposing immediate costs on themselves through negative emotion.  So a dieter resists a dessert by thinking, “If I have that last piece of cake, I’m a glutton,” and thus transfers some of the costs eating it to the present.  Obviously, this negative emotion is not always enough, or we wouldn’t have Weight Watchers.  What the debt bloggers are doing is intensifying the negative emotions they associate with spending to the point where many of them claim that their blogs helped them substantially reduce or eliminate their debt.  As one blogger said, “I teach people how to get out of debt for a living, but I couldn’t do it myself until I started the blog.”

A final point is to notice what an extreme measure this is.  People are revealing information they find humiliating to strangers in order to prevent themselves from spending and accumulating more debt.  Perhaps these bloggers and other debtors like them could use a little help.  (Self-disclosure: I’m currently writing a law-review article on precisely this topic.)  Credit-card issuers don’t need to continue giving these borrowers enough rope to hang themselves.  At least one blogger's credit-card debt exceeded her annual income.  That seems like a reasonably extreme point to cut off somebody’s credit.  Another option is to create easy ways for credit-card users to decline credit raises.  If some debtors are resorting to blogging to resist temptation, I’m willing to bet that plenty of others would welcome less dramatic willpower reinforcements.

Comments

[Alaska]

There are message boards that serve the same function, only along with "shame" for falling off the no-debt wagon, there is positive reinforcement for each debt paid off.

There are also more experienced voices to help with decisions like whether or not to sell a vehicle on which you still owe, or how to deal with a nasty debt collector. www.llnoe.com is one example that I am familiar with.

[Poorer Than You]

I find it interesting, because I did not start my blog as a tool to help me eliminate my debt (my blog was one of those mentioned in the article), but simply because I had been reading so many other personal finance blogs, and felt I had a unique - but not exclusive - situation, the sharing of which might help and entertain others. I also wanted very much to become a part of the community.

[W. Galway]

Angie Littwin provides a link to a New York Times article:

http://www.nytimes.com/2007/02/18/us/18debt.html

in a form that's not very useful to many readers because they'll require a subscription to the N.Y. Times in order to read it. In the future it would be better if you used the "New York Times Link Generator" at

http://nytimes.blogspace.com/genlink

Thanks!