Special: This Is The Year to Get Richer!

0:00Through 25 seasons, 4 ,561 episodes, I believe The Oprah Winfrey Show is one of the greatest classrooms in the world. I really never thought of it that way. The aha moments, the breakthroughs, the connections, the occasional ugly cry. I miss him so terribly. I miss him every single minute. The LOLs. The moments that mattered. The eye-opening life lessons. Never allow them to take you somewhere else. I'm bringing them back. It's time to open the vault. I've personally chosen these classic episodes to share with you again. Every single person you ever will meet shares that common desire. They want to know, do you see me?

0:47Do you hear me? Does what I say mean anything to you? You are listening to The Oprah Winfrey Show, the podcast.

0:59One of the nation's leading financial experts says that five people in this audience are going to leave here thousands of dollars richer with their own money in less than one hour. Money coach Jean Chachki has assembled a dream team from Money Magazine to help her with this challenge. And you at home will learn their secrets, too. So take notes. I'm looking for Lindsay and Matt Clark. Come on up here.

1:30I'm looking for...hello. Hi there. Hi there. Hi there. Hi there. I'm looking for Kathy and Steve Lozer. Lozer. Lozer, Lozer, Lozer. Come on up. Hi. Hi. Right on over here. Hi. And I'm also looking for Diana Dyza. Diana Dyza. Is that you? Okay. Hello.

1:55Don't be scared. Okay, so all of these people knew that they were coming to a show about money, but they didn't know that they could leave here richer, right? You didn't know that, right? Okay, I didn't either. But anyway. Lindsay and Matt are 25 - and 29-year-old newlyweds expecting their first baby. They make approximately$97 ,000 a year. They have$6 ,000 in credit card debt and$65 ,000 in student loans. Kathy and Steve are both 51 and have four adult children. Two still live at home. They earn$100 ,000 a year and have approximately$34 ,000 in credit card debt. Diana is 23 and single. She makes$50 ,000 a year.

2:38She has$6 ,000 in credit card debt and$37 ,000 in student loans. Diana says she's living paycheck to paycheck. OK, so Jean's dream team is waiting for you backstage. OK? Don't be nervous. The clock is ticking, and we'll be checking in with you throughout the show. They told me they could do this, but I don't even know if they can. We can so do this. You can so do it. We can so do this. That you're going to make them richer in an hour with their own money. With their own money. Okay. Much richer. Okay. I want to see that myself. Okay? Don't you want to see that yourself? That you're going to be richer in an hour with your own money?

3:13Because I don't have nothing to give you, really. Okay? We're going this way. We'll see you in an hour. This way, guys. Right out that door. Okay. Okay. So Jean Chatzky, author of Make Money, Not Excuses, says that women in our country of America should be a lot richer than they are now. So what's holding everybody back? Excuses. Excuses like, I'm just not good with money. I mean, that's the one I hear every single day on the street. But this is not rocket science. Yeah. Or you only live once. That's the shopping excuse. You go into a store, you see something, you watch. You only live once. But you can't do it when it's getting in the way of your future.

3:59I'm afraid I'll lose money. This one I hear over and over again. People are afraid if they invest it, they'll be taking a huge amount of risk. Does not have to be that way. I don't have time. Of course you don't have time. Who has time? We have no time. But this can be very, very easy and very, very quick. And finally, there are a lot of people who think, I'm too old. It's too late for me. It is never too late. Let's start now. So Jean says that one of the most common excuses that women make for not taking charge of their finances is, my husband handles the money. Mm-hmm. And I'm sure that that rings a bell for many of you.

4:39So 48-year-old Carrie Hartsoe says that she knows that excuse all too well. Listen to this one. When I met my husband, I had been I've been a single mom for about four years. My children were in elementary school. I was working two jobs and going to school full-time. Probably six months or so before we were married, he started taking responsibility for the bills and the money. I felt like I had been rescued, and who wouldn't want someone to just ride in and make things easier and better? Carrie thought she'd hit the jackpot. With her real-life knight in shining armor by her side, she would never have to worry about household finances or bills again.

5:24I rarely ever looked at a statement. I literally would get the mail, see a bill, throw it in his pile, you know. When her husband got a promotion, the family moved to St. Louis, where they decided Carrie could stay at home. Kind of felt like I'd paid my dues, and now it was going to be my turn to maybe smell the roses a little bit, relax a little bit. And I thought, you know, this is great. So, in fact, what Carrie thought was the life she had always dreamed of was anything but. One day, Carrie says, without warning, her husband asked for a divorce. Without warning. And they were deep in debt.

6:04And Carrie then had no money. She had no job and nothing to call her own. For the first time in years, Carrie was forced to take a long, hard look at her financial situation, and what she discovered was bleak. As of today, I probably have about$60 in my checking account, and I have$49 in my savings account. My family is keeping me afloat. My grown children. My mother. I have sisters and I even have an elderly aunt and uncle who have sent me money. Facing possible foreclosure, Carrie was forced to move out of the 3 ,000 square foot dream home she thought she'd grow old in.

6:57Carrie. Hi. Money coach Gene Chatzky flew to St. Louis to meet Carrie and to help her start rebuilding from scratch. So you let him manage. Mm-hmm. But did you pay attention? Not, not very much. That was my big excuse was, oh, he's doing it. Gene says for Carrie, the time for excuses is over. And finding a job is priority number one. Do you know how much money you need to earn in order to support yourself? A minimum of$2 ,000 a month, plus a good, you know,$10 ,000 additional every year to put away for your retirement. Right. The only thing you have to realize is that there's no wiggle room in terms of saving anymore.

7:43No. I mean, do you get that? Oh, I so get that. Really, let Carrie's life be a warning for every woman out there. Her money it cost her, her 13-year marriage when her husband surprised her and said, I want to do divorce, something you never expected? I really didn't. I would like to say that I was smart enough that I thought that was a possibility, but I really didn't see it coming. You didn't see it coming? No, I didn't. Okay. So Jean did some number crunching to help Carrie figure out how much she needs to earn and save to retire comfortably. And you came up with? Well, we heard Carrie say in the piece, she needs$2 ,000 in order to live.

8:20On top of that, you got to add taxes, and we need you saving big. We need you saving big. So$3 ,800 a month is what you should aim to earn. You put away$1 ,000 a month. Invest that for 20 years. I wish I could say 30, but you don't have 30 left. You got 20. But at retirement, you can have 600-plus thousand dollars, which means it's not too late for you. You can do this. That's great. Yeah, you can do this.

8:50Now, when you say, I think this is great for people to figure out, because most people don't even know, I bet you, what it takes for them to live. That's right. Okay. So how did you do that? You asked her that question, what's it going to take? And she then said, you said, a minimum of$2 ,000 a month. How did you know that answer? Well, I recently moved out of our home, so I knew what I was going to be paying in rent and estimated utilities and just basic expenses, and that's kind of where I came up with the$2 ,000 minimum. Okay. And so when you say you want to earn$3 ,800 a month, is that before or after taxes?

9:24That is before taxes. Okay, good. We'll take taxes out of there. She'll still have plenty of money to save. And that's the thing. She needs$2 ,000. That's not, I'm going to go shopping. I need$2 ,000 to order to live. And then saving becomes the priority. Okay. Jean says she has four simple steps that anyone right now can follow to get richer. Number one is maximize your income. Figure out what you need. And then if you're not earning it, go get some more. You know, women are really good at asking for anything for our kids. When it comes to asking for money for us, we are terrible. Okay. Step two, spend less than you make.

10:05Now, this is where a lot of people fall apart. Here's what I want everybody to do. The next time you go make a purchase, whether it's a$3 purchase or a$300 purchase, you pause. Take a breath. Ask yourself, what am I doing here? Do I need this? Often that's all it takes to get you to walk away. I would like this young lady in red here. Can you stand up? Because even as you're speaking, you know how you watch people's body language? First she was like this, then she was like this, then she was like this. When you said pause, she was like this. So that's affecting you somehow. Yes. Yes, when you're hearing that.

10:46What is...what's going on? Well, I have a similar situation where I'm just getting out of a marriage and have a single-income household and basically starting all over financially. And so just hearing what you're saying, I'm really trying to figure out how to budget. I actually just moved to Chicago from Detroit, so trying to figure out how to budget. You need a good coach. You need a good coach. It's important. And just trying to figure out, like you said, how to spend less than what you make is a challenge. The best thing that you can do is start watching what you're spending now. Get a notebook and start tracking your spending.

11:20You're going to find places that you can spend less, and you're going to find a lot of places where you say, oh, my God, I spent that. And that's when you can start to really change. Well, let's ask you, let's go back to it, because I saw her reaction. That's why. Thank you very much for standing up. But that question of you're standing in the mall. You know, you got the mall browsers. You got the people, they do the mall thing. Yeah. To fill themselves up, to make themselves happy, to... To... They're feeding something that they don't think they have. Yeah. They're trying to make themselves happy with things.

11:52it doesn't work. Jean, what's the third step? The third step is to invest that money that you're not spending. You're not spending it, so you've got a whole pile of cash sitting in your checking account or in your paycheck. You move it out of your hot little hands automatically by changing your withholdings, so some of it goes into a 401 or just calling up your bank and saying, I want some of this to go into a money market account. Every single month, you do it automatically. And enough of this saving at 2 % interest. There are really good savings rates out there now, 4%, 5%. Go get them, because the difference between earning 1 % on your money and 5 % on your money can be hundreds of thousands when it comes to retirement.

12:35And how much should you be saving? You should be aiming for 10%. And if you save 10 % over a period of time? Over a period of time, you should be fine when it comes to retirement. You should be fine, but you got to put that money to work for you. You've got to wake up those assets that are sitting there sleeping and make them work just as hard as you do. And then once you've got this nice financial picture that you've built, this rosy picture, you're heading towards your million dollars, you have to protect it. You have to protect it. You need insurance, health insurance, life insurance, disability insurance, a will so that it can take care of you and the people you love.

13:14And you need not to make that mistake that Carrie made. I want every woman sitting here to have money in your own name. Money in your own name.

13:29Which you did not have. No, not really. Everything was commingled. Both, yeah. And now you wish you did. Oh, yeah. At 48. Mm-hmm. So what would you say to every woman who's watching, hears your story? Well, for me, I think the story is hope. You know, Jean has given me a tremendous amount of hope that it isn't too late. And you can start over at any age if you have to. But certainly I would choose to do things much differently. I would hope that my daughter and my granddaughter would do things differently than I did. But moving forward, for me, there's hope. And... What would you do differently, the number one thing?

14:06The number one thing is I would have a savings account in my own name. And I would be contributing directly to that. Yeah. Yeah. I think that's the new feminism, to have your savings account in your own name. It's our little red sports car. Yeah. It is. It is. It's our sports car. And it's a myth that if you're not in the workforce, you can't save for retirement. You are entitled to open an IRA of your own. Thank you so much. Let's check in with our five audience members. We just pulled them out of their seats. Now they're backstage with Gene Chachki's Money Magazine Dream Team. Gene says in one hour, this is what they say, they're going to be thousands of dollars richer with their own money.

14:44We're going to see how that's going to happen. How's it going up there? Oprah, it's going just great. I hustled up here. I checked in with the Money Magazine team, and they are making great progress. But you've got to know they're dealing with some big issues here. We've got Lindsey and Matt. They've got$6 ,000 in credit card debt,$65 ,000 in student loan. Their big problem, she's a saver, he's a spender. Over here, we have Kathy and Steve. Again, they've got a big credit card debt, But their bigger problem is that they are spending$700 a month supporting their 22-year-old son. Clearly, that has to stop.

15:21And finally, over here, we've got Diana. Now Diana's got credit card debt. But she's young. She's got a lot of time on her hands. She should not be living paycheck to paycheck. So we're working our magic to find you some money that you can start putting away. Okay. Come on back down, Jean. Okay, I'm on my way. Okay, we're going to get the final results at the end of the show. Now I want you to meet a group of friends who put an end to their money madness, and they took matters into their own hands. We call ourselves the smart cookies. We followed your debt diet. And we stopped making excuses. And we started making money.

15:57It all started a year ago when 24-year-old Katie Dunsworth decided it was time for she and her friends to stop spending, start saving, and get richer. One of my biggest excuses is spend now, worry later. One of my excuses was that I was just too young to save. So they set up weekly meetings, confessed their debt and made a plan to pay it down, then start investing all as a team. I thought I needed the right clothes to attract the right people into my life. Now I know better. I'm a smart cookie, share clothes and I literally save about$600 a month. I used to believe I couldn't live without a car.

16:31What I've realized is taking the bus isn't so bad and I'm saving on car insurance, gas and parking tickets, saving$700 a month. Robin kept her car but gave up her parking spot instead. Now she makes an extra$50 a month, renting it out while she parks on the street for free. Katie and her fiancé, Nick, even managed to save enough money to pay for their$22 ,000 wedding in cash. The Smart Cookies have saved thousands, making small changes, cutting cable, walking dogs, selling clothes, and even sharing magazines. To being Smart Cookies. Saving money. All right.

17:09Wow. Congratulations. Wow.

17:16In one year, the smart cookies saved$15 ,000. They paid off$15 ,000 in debt and increased their incomes by$45 ,000. Really? Yes. So, Robin, I hear you now nearly doubled your income. How did you do that? I'm a social worker. I don't go into social work to make money at all. No. However, after making about$30 ,000 in the field, decided to go back, do my master's, and I complete that in May. By the time I graduate, I'll be up to about$70 ,000, also doing some contract work on the side of adoption studies, and that's an extra$12 ,000 a year. Wow. So$82 ,000. $82 ,000. So this started by watching our debt die?

17:54Are you kidding? Yeah, we had actually... Andrea and I had both seen the show and called each other and just sort of started discussing it. And really the one thing that came across was we need to be held accountable. So we talked about maybe doing something once a week, and we called some other friends, and we meet weekly, and it's been... Well, had you previously, before seeing that show with Jean and our team, had you... were you in debt? Were you thinking about it? Were you talking about it? Yeah. I was... I was definitely... I was the one that was in the most debt. And I was... it was something that I was definitely ashamed of because I had sold a property, my first property, made lots of money off it, and then I had nothing to show for it.

18:30So it was something that I definitely wanted to take charge of in my life. You know, I was almost... And truly our spending, I mean, that was, for me, it was just everything on the credit card, not thinking, not looking at bills, and spending really more than we were making and trying to live a lifestyle that wasn't who we are. And not saving. And not saving. But you still look so lifestyle cute. We share clothes. We share clothes. You share clothes. So you're all friends who share clothes. And that was the decision that you made, That we're going to share rather than buy new stuff? Yeah. We had all exp...we all had expensive tastes, and we knew that we had the same taste, so we thought, why not just share?

19:07I mean, it's just easy. We all live within blocks of each other. And so what was the goal? The goal was really to just cut back on sort of frivolous expenses and to start saving. And in a lot of cases, we actually wrote down, like, our...our...our main financial goals for Robin. It was getting a better-paying job for myself. It was saving for my wedding. And really held each other accountable and sort of helped give suggestions. So this was your... And you met...met...met monthly? Weekly. Weekly. Yeah, yeah, weekly. And you look forward to it. Yeah, we look forward to it as a way to... We educated ourselves and shared tips with one another.

19:41If someone had a great cell phone plan, then we'd share that. And so what about partying? I noticed some Cosmos in the kitchen. We have to take a weekly reset. We invented something. I'd recognize a Cosmo anywhere. We invented something we call$6 Girls' Night, which is where we will make pizza, bring wine, and we'll... And we're only allowed to spend$6. $6. $6. Yeah. Girls' night. Yes. OK. It's doable. It's doable. It's$6 per person. Yeah, yeah. Oh, OK, good.

20:10I'm like, that is very thrifty. $1 each. $1 each. So you love the idea, I know, of money groups. Tell us more. I love the idea, and I love it for all the reasons that you make clear. I like it because they're so young and cute and smart cookies. They're so... Yes, these smart cookies are inspiring. So we challenged America to get out of debt with our great American debt diet. And millions of you got on board at Oprah.com. We followed three courageous couples who agreed to work one-on-one with our debt diet money coaches to see how much debt they could pay off in just one year. First up, the Bradley family.

20:48The Bradley family is from Raleigh, North Carolina. Lisa is a case manager. Stevens a government employee. A year ago, they made$102 ,000 a year, but were$170 ,000 in debt. With a big house and four cars, nobody knew the Bradleys were secretly drowning in bills. No one knows the truth. And the Bradleys were on the verge of divorce over leases out-of-control spending. To get this truck, I forged my husband's signature. We argued on a daily basis about money. My marriage is very close to being over. Money coach Gene Chatzky moved in to help the Bradleys start digging out of their financial mess.

21:26He's gonna give you$20 a day and that's it. Bye-bye, big screen. That's okay. And it wasn't easy. You are gonna get an allowance. Lisa, you can't afford it. You don't have a clue. You really have no idea how pissed I am at you today, but I'm trying to contain that. You can get as pissed off at me as you want. I want you out of debt. That was one of my favorite moments. That was one of my favorite moments because little Miss White Jean Chatsky is talking to Lisa about the hair issues. And anybody who's watched us for years, this show knows that black women, we have a thing with our hair. But Jean, Jean stood her ground.

22:08She's like, no, no. And Lisa's like, you don't have a clue, honey. So anyway, the Bradleys were$170 ,000 One year later, they have paid off$50 ,000 in debt.

22:26Oh, yeah. What a pleasure. Welcome back. Welcome back. Hey, you look great. Your hair looks great. Thank you. You look great. You look great. So what did the Bradleys do? They got serious about paying down this debt. They got rid of two cars. Remember, we had a car issue. in addition to the hair issue. That was$30 ,000. They got rid of$8 ,000 in late payments, paid off$7 ,000 in medical bills, $3 ,000 in credit card. That TV that went back was another$2 ,000. So they got serious. And then they didn't start spending. They didn't start spending. They did not start spending. She saved$5 ,000 by not going to the mall every day.

23:09That went toward the death. $6 ,000 by not eating out three times a day. This family can cook. Wow. They can come.