Shopaholics, Big Spenders and People in Debt, Getting Smacked by Economic Reality

The tires on his Ford Taurus were shot. He was months behind on his payments for everything. He slept in a walk-in closet, at arm's length from a toilet. Opening the mail one day in that malodorous shared Baltimore townhouse, Sam MacDonald faced "a new pile of bills. Credit card. Credit card. Credit card. No surprise there. But then another envelope caught my eye. Student loans." A serial job-quitter and freelance editor -- in, of all fields, financial publishing -- MacDonald had graduated a few years earlier from Yale.

"Damn it. Damn it. Damn it. I forgot the damn student loans. Again."

He predicted that the latest loan bill would demand $450, "the financial equivalent of a rabbit punch to the throat." But nooo. Larded with late fees, it topped $1,800. Added to the $4,000 MacDonald already owed to everyone else, $1,800 was no rabbit punch. It was "an ice pick to the eyeball. A shotgun blast to the nuts. A somersault-savate kick to the base of the skull, followed promptly by a shiv to the small intestine."

This is the season for how-did-we-go broke books such as MacDonald's memoir, The Urban Hermit (St. Martin's, 2008), in which the libertarian journalist remembers "my long, raucous march into irresponsible living," then details the radical regimen he adopted to get out of debt. It was infinitely basic: Spend only $8 a week. Consume only 800 calories a day. He was warned that those starvation rations could kill him. "It was a strange and dangerous plan. A shitty plan, actually." But since he weighed 340 pounds at its outset, "I figured that I had amassed enough soft tissue to make it work."

And it did. Over the next year-and-a-half, he lost over 100 pounds, paid all his bills. Hard lessons lay in those unrelenting bowls of boiled lentils and cheap canned tuna. "But I do know this. Hunger is power. And everything else is bullshit."

His experiment happened circa 2000, a prosperous era during which his former Yale classmates were being hired at Harvard and Goldman Sachs. That was then. This is now. A few megabillion-dollar bailouts away, being broke is the new black. But hitting bottom caught MacDonald off guard.

He hadn't made any bad investments. He hadn't made any investments at all. He didn't have a penny in the stock market. He wasn't a high roller, just a good-natured "big boy … who loved drinking and spending money and letting the dealer come over with the Ecstasy and cat tranquilizer." MacDonald was such a fixture at his local bar that fellow regulars always "called to demand my presence if I failed to show, which wasn't often." Even so, beer at that bar cost only $1 a pint.

It was the little things that added up. They always do. A few missed bills down the road, "I had leaped out of a precarious paycheck-to-paycheck existence and into something far worse." Nearly $6,000 in debt? "I know. That might not seem like a lot." His former classmates owed that much or more, but "most of them were the long-view types" who worked hard and had "something to show for the red ink. A hulking SUV. A hip townhouse. Fancy clothes. A master's in philosophy. A fucking CD collection." By contrast, "my financial crisis was doubly cruel in its dullness and the damnable respectability of my pursuers."

So: "No messing around. Rip life down to the basics. … Eat the bare minimum required to stay alive. Send the savings to the creditors. Simple."

Well, in principle. Although he did not actually become a hermit -- but it makes a great title, eh? -- he had to stop doing his favorite things in his favorite places with his favorite people. He had to skip concerts he wanted to see. He couldn't afford to date. He became a staff writer at a local weekly paper (an occupation that, over the last two years, has largely ceased to exist) and a part-time hauler at a fish-packing plant, and didn't quit. Because his plan was ironclad, he refused co-workers' offers of free meals, even free birthday cake. Later, after he'd lost the weight and paid his bills and adopted a slightly softer version of the regimen, he began accepting those kindhearted offers. A good move, and let's all hope some of those come our way as well.