Personal Finance: Getting Help From Friends

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.

Now Baxter and her fellow money group members are hoping to inspire millions of others who are now struggling with financial problems. They've launched a Web site ( and collaborated on a new book, "The Smart Cookies' Guide to Making More Dough," which hits shelves this week. The timing seems fortuitous. With stocks and home values plummeting, banks failing and consumer prices climbing, Americans everywhere are being forced to reassess their finances and make some difficult choices. The support that comes with being part of a money group may be just the antidote to the stress-inducing prospect of facing such daunting financial challenges alone.

Just keep these tips in mind:

Be prepared. Before the first meeting, the Smart Cookies read books and articles on personal finance, gathering the best tips. They sought out mentors: Baxter approached a former boss she admired, for example, and Dunsworth enlisted the help of a successful salon owner. They took notes on how they made and managed their money, and they collected months' worth of their bank and credit card statements, bills and pay stubs (not an easy task!).

Be candid with each other. At their first meeting, the Smart Cookies members each revealed how much they made, owed, saved and had invested, and, over the following weeks, they set new goals in each of those areas. But first, they each made a promise to support and respect each other and to keep all conversations from the meetings confidential.

Be selective about your members. These should be people whom you trust and respect, or people who have been recommended by someone you do. They should truly want to make improvements in their finances and to learn more about saving, investing and attracting more money.

Be consistent. Establish ground rules and a schedule at the first meeting. (You can meet as frequently as you want, but it's good to meet at least monthly to stay on track.) Try to keep the same time and day for meetings. At each meeting, stick to an agenda of key items.

Be willing to give and ask for help. You can be great resources to each other. Take advantage of that.

Be accountable. It's important to hold every member responsible for the goals set at each meeting.

Be organized. Pick a leader or chairperson for each meeting and assign tasks to members—like taking minutes or bringing refreshments—for the next. Keep a master binder of minutes and related articles or research.

Be active between meetings. In addition to setting short-term goals for each member between meetings, one Smart Cookie would usually research an area of interest—like how to get the cheapest cell-phone plan or negotiate a lower interest rate on a credit-card balance—and then report back to the others at the next meeting.

Be respectful, supportive and interested. Sharing such intimate details about your finances and your dreams helps to create a bond with other money group members that can last a lifetime.

Be recognized. At each meeting, the Smart Cookies still take time to acknowledge their latest achievements, and to celebrate the progress they've made toward their long-term goals.

Be fun and social, but don't forget the primary reason you're meeting. While the Smart Cookies have become best friends, they don't forget the business at hand when they meet. Leave some time for eating and socializing, but agree on a time when you'll call the actual meeting to order. If you treat the money group like a business, you'll get more accomplished.

That's what the Smart Cookies did. Now models of financial responsibility themselves, they still continue to meet regularly, only now they do it as co-workers, not just friends. Within two years of their first meeting, the Smart Cookies were so successful that they turned their group into a full-time business.

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