Bailout Buddies

Editors ' Note: The following is adapted from "The Smart Cookies' Guide to Making More Dough," published by Delacorte Press, a division of Random House, Inc. The newly published book was co-authored by The Smart Cookies Money Group and Jennifer Barrett, a former NEWSWEEK staffer.

By all outward appearances, Andrea Baxter seemed a model of success. A marketing manager at a multinational firm in Vancouver, British Columbia, the 28-year-old had a lucrative career, an active social life, a condo in a trendy neighborhood, and a wardrobe full of designer dresses and suits.

Behind her professional façade, though, Baxter was a nervous wreck. Like a growing number of Americans today, she found herself struggling more each day just to keep up with her expenses. Her debt ballooned to nearly $18,000, and she fell so far behind in payments on one credit card that the collections agency began calling her at home. She had no savings and no idea what she'd do if she got hit with an unexpected expense, or worse, a pink slip.

But Baxter's story has a happy ending, and her strategy is one that's easy to emulate. It didn't involve winning the lottery, marrying a millionaire or getting a parental "loan." All it took was a little help from her friends.

While working from home one afternoon in early 2006, she saw an episode of "The Oprah Winfrey Show" offering advice on paying down debt. A few days after it aired, Baxter mentioned it to a couple of colleagues over coffee and was surprised to learn they too were struggling to overcome financial problems. So they thought, "Why not do it together?" Two other friends—a social worker and a TV production assistant—wanted to join as well. They dubbed themselves the Smart Cookies Money Group and set it up like a book club, only instead of reading and discussing books, they'd be reading their bank statements and discussing ways to pay down their debts and make more money.

At the time, Baxter feared it could take years of drudgery and deprivation to dig herself out from under that five-figure debt and start to build real wealth. But within a year, she'd already paid off her debt, increased her income by $10,000 and begun setting aside $125 each month for saving and investing. Her fellow group members (co-workers Katie Dunsworth, Sandra Hanna, Angela Self and Robyn Gunn) had also made substantial progress. Dunsworth and her fiancé even managed to pay for their $22,000 wedding in cash. Barely a year after the "Oprah" episode that inspired their money group aired, the five were being featured themselves on her show, talking about their accomplishments.