Liz Pulliam Weston

on Reducing Debt
MSN Money columnist and author

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Exclusive Interview

Liz Pulliam Weston on Debt Reduction

Liz Pulliam Weston is the most read personal-finance columnist on the internet, according to Nielsen/NetRatings. So, it’s clear she knows a thing or two about reducing debt. She is the author of the best-selling, Your Credit Score: How to Fix, Improve and Protect the 3-Digit Number that Shapes Your Financial Future. Every Monday and Thursday, Weston's column appears on MSN Money, and has a syndicated question-and-answer column, “Money Talk,” that appears in newspapers across the country. A frequent expert on television and radio shows, she has been a guest on “Talk of the Nation,” “All Things Considered,” “Marketplace Money” and “The Today Show.” Weston gives straightforward advice on getting debt under control.

What are the top three steps people should take during the first 30 days of reducing their debt?

1. Come up with a game plan. This means you need to know the extent of your debt and the specifics of your debt. List all your debt, including the interest rate, whether it’s tax deductible or not and the minimum payment. It’s also a good idea with credit cards to list your credit limit. See which accounts are approaching the maximum.

2. Decide which debt to tackle first. The old advice was to pay off the highest rate debt first. Now that we know more about credit scoring, we realize that you’re damaging your credit score anytime you max out a card. I tell people to go after the debt that’s closest to the limit. If you have a bunch of those cards, you may have to pay them all at the same time. In other words, instead of putting $500 on one card, if you have two that are close to the limit, you may have to pay $250 on each one. The reason that I focus on the over-limit ones is that a lot of people who do have credit problems also have maxed out their cards, and it’s hurting their credit scores, so they’re not able to get a better rate on their other cards.

3. Start freeing up money to pay off those debts, either by cutting expenses, making more money or doing both.

What are the biggest signs that someone needs debt help?

One of the subtle but most frequent ones is that you and your spouse constantly fight about money, even if you’re not maxed out. Another is that if you’ve used all your credit or the only place you can get credit is a payday loan or other place with really high interest rates. You’re barely making your minimums or not making them at all. Those are the signs that the ambulance is racing to the scene, but if you have any credit-card debt, you have a problem.

What are the best options for receiving emotional support during the first 30 days of trying to reduce debt?

There are great web sites you can visit. A lot of them have online communities. is a great one. provides tools and also a community. The “Your Money” message board is a great resource—which I sometimes moderate., a site about saving money, is good.

What drives debt in the first place?

Not being a grown-up and wanting everything immediately. With money, it’s like your inner four-year-old comes out, stomping around and demanding that toy immediately, even if it’s not the ideal toy.

How can you change this behavior in the first 30 days to encourage long-term success as you reduce debt?

You have to tell yourself that if you just wait and do the right things, you can have a nice, brand new toy—just not right now. Cut up your cards or make it extremely hard to get at them. Freeze them in a block of ice in your freezer. Call your creditors and try to get your interest rates lowered if you can. Go on a cash basis as much as you can. Only use a debit card if you’re absolutely sure you’re in control of what and how much you’re spending.

Cut out pictures of things you want to buy once your debt is paid off. If you want something in particular, cut out the product and put in up on your bathroom mirror so you’ll be reminded each morning of your long-term goals. If you find a magazine photo of a person who looks at ease and happy, put that up.

How do you break the cycle of credit-card debt?

To break the cycle, you have to stop overspending. Once you develop a plan, stick to it. When your debt is paid off, take that money and put it in savings each month and into your retirement account.

How much of debt accumulation is emotional and how much is ignorance of how to handle money properly?

Some debt accumulation is the result of bad breaks and of not being prepared for life’s inevitable setbacks. People without health insurance can wind up with huge debts after an accident or illness, for example. People without an emergency fund often wind up putting unexpected expenses on their cards. But a lot of credit-card debt is essentially a refusal to grow up and learn about the right way to handle money, so it’s a combination of emotions and ignorance.

Bad breaks tend to come in bunches, unfortunately. If you lose your job, you tend to lose your health insurance, too. Bad things can happen to anyone, and enough bad things can happen to bankrupt people who thought they were well prepared. That doesn’t excuse you from trying to be prepared, though. Always try to keep your bases covered.

Dr. Elizabeth Warren of Harvard University says that most bankruptcies are actually triggered by an event like a job loss, illness, disability or divorce—a major setback of some kind. It’s not just running around buying too many lattes.


What is the belief that you personally go to during times of change?

That I can change—I’m capable of change. I know I can do it. I’ve done it once, so I can do it again.

The best thing about change is…

…you can reach your goals. You can make your life better.

What is the best change you have ever made?

Having my daughter.

For more information on Liz Pulliam Weston, visit

Easy Money: How to Simplify Your Finances and Get What You Want out of Life


In this book, Weston takes on the problem everyone has, and nobody talks about: the sheer hassle of managing your money! Weston offers practical guidance and easy checklists for every financial decision you may face....