Real Bankruptcy of 'Real Housewife' Teresa Giudice Is a Teachable Moment

A real housewife of New Jersey is making headlines by filing for bankruptcy while starring as a socialite mom on Bravo's hit show The Real Housewives of New Jersey.

She's also, for those of you who are playing along at home, possibly the first person in history to file for bankruptcy while on The New York Times Bestseller list -- occupying the No. 14 slot on the Paperback Advice list with her cookbook Skinny Italian. Teresa Giudice told Us Magazine last night that she is "staying positive." "I have moral support; I have my daughters and my husband," she said. "As long as we're in good health, that's all we can do. I think this kind of situation is all over the world."

The outlook for her family's creditors? Less positive. Giudice and her husband, Joe, have $11 million in debt against an annual household income of just $79,000 -- including her fees for appearing on the show. According to The New York Post, the couple owes $104,000 in credit card debt, a whopping $1,280 per month car payment, $8.4 million in mortgages and personally guaranteed business debt, along with $12,000 for infertility treatment and a $2,300 phone bill.

While all this has been going on, Giudice has been living a lie -- playing the role of a wealthy socialite housewife in spite of a net worth that was negative by at least a few million dollars. Here are a few personal finances lessons we can learn from her plight:

• Pretending to be rich is really, really expensive. In his book Stop Acting Rich, Dr. Thomas J. Stanley found that people who live in communities where their neighbors earn more money than they do have a very hard time building net worth. In order to get her financial life back in order, Teresa should move her family into a new neighborhood where her family's income puts them above the median. There, there will be less pressure to drive a more expensive car, and they can funnel all their income into getting out of debt (depending on what kind of bankruptcy plan they end up with) and rebuilding their lives. As long as they live in a wealthy neighborhood, it will be psychologically impossible to give up the trappings of wealth that are making them broke.

• Anyone can look rich. If you see someone driving a new Cadillac Escalade, you probably assume he's doing well financially. But the truth is that any idiot can afford to drive a beautiful car that belies his true financial health. If you put your household expenses on a credit card, a $1,280 per month car payment is absolutely doable. Will you ever get rich leasing a car for more than $1,000 per month? Of course not. But you'll look really cool until it gets repossessed. Stanley found that the most popular make among millionaires isToyota.

Lots of young people watch shows like The Real Housewives of New Jersey, and aspire to the level of conspicuous consumption that makes those shows so entertaining. Hopefully, now we can also learn what an illusion it all is.

As Luann from The Real Housewives of New York sings (or something approximating that) in her new "song" Money Can't Buy You Class, "Elegance is learned."

Giudice's next challenge will be learning the elegance of living within her means. Everyone makes mistakes, and she deserves credit for putting on a brave public face in spite of achieving a level of public humiliation few people could ever dream of. In her new post-crash life, she could finally become a role model young people would actually benefit from watching.