Carrie Sloan for LearnVest | August-October, 2011
Over the course of just 8-weeks, six women made impressive changes to their financial situation. There’s certainly something to be said for (1) access to a financial expert, (2) public accountability and (3) having other people to support and inspire you along the way.
We gave each member free access to Lauren, a Certified Financial Planner. You can think of her as their coach and mentor, creating a road map for them to achieve their goals (the Tim Gunn to their Project Runway, if you will).
To start your own money makeover success story find out more about becoming a client, or sign up for my newsletter.
Ashley’s Starting Point
“Having a baby is expensive, and if Ashley and her husband are serious about doing it in the next year, they need to say goodbye to the glory days of taking taxis and attending benefits. Between her student loans and the credit card debt they have left over from the wedding, they’ve got a lot to balance right now—especially since Ashley is the sole earner until Jonathan’s green card comes through.”
Ashley’s Money Makeover Story Accomplishments
“There’s always a learning curve when it comes to money and marriage, but Ashley and her husband Jonathan really worked as a team,” says Lauren.
- They cut back on taxis, gym memberships and meals out to bring their monthly discretionary spending to under $800 a month. If they keep that up, they can make a big dent in their credit card debt while freeing up $900 a month to divide between an emergency fund and a savings account for a baby.
- During these eight weeks, Ashley consolidated her federal student loans. It meant facing a mountain of paperwork, but she decreased her payments by several hundred dollars a month!
- They became a two-income family again. After Jonathan’s green card application was approved, he found part-time teaching work immediately, and is now searching for full-time employment, which will improve the couple’s financial big picture even more going forward.
Macy’s Starting Point
“Even if you’re not bringing in the big bucks yet, owning a home is absolutely an attainable goal. In fact, having that large goal is likely to motivate Macy to stay on track with other aspects of her financial life—like student loan payments, budgeting and managing her career. The trick will be balancing everything. If she’s serious about that loft, her spending choices today will make a huge difference in whether or not she reaches her goal.”
Macy’s Money Makeover Story Accomplishments
“When Macy started this makeover, she was overwhelmed by everything she’d need to do to get her financial life in order,” says Lauren. “In two short months, she’s made huge strides.”
- She rented her first apartment and stayed within her budget: At $635 a month, it was under 30% of her take-home pay, as Lauren recommended.
- Macy linked up her accounts to track and categorize her spending, and learned that with $2,167 in take-home pay, her fixed expenses (including student loans) add up to $1,063. That means she can put in up to $417 a month to max out a Roth IRA for retirement.
- She created a long-term savings goal, researching the price of the dream loft she eventually wants to buy ($250,000 to $300,000). Now she knows that by saving $500 a month, she can own a home by 30.
- Macy also researched competitive salaries to prepare herself to ask for a raise. At the six-month mark she plans to ask for $45,000, increasing her take-home pay to $2,700 a month, and giving her the extra $500 to devote to savings.
Daina’s Starting Point
“Daina is talented—she’s out-earning most of her peers at this stage of the game, but she’s still barely scraping by due to those predatory student loans and a rent payment that is a few hundred dollars above what she can afford. If she could turn back time, she would make different choices with regard to funding her education, but what’s done is done—and at least she pursued something she loves. She knows she has to make drastic changes now, and she’s finally ready to shake off the financial paralysis she’s been stuck in for the past year or two.”
Daina’s Money Makeover Story Accomplishments
“If anyone has ever found themselves overwhelmed by their financial situation, Daina’s story is a shining light of encouragement,” says Lauren. “In eight short weeks she’s changed not only the path of her finances, but the path of her life.”
- Daina made a big decision in the course of this makeover—to leave New York City and move to Canada to live with her boyfriend, Oliver. By not renewing her lease, and convincing her management company to get a new tenant a month early, she saved $1,400 (a month’s worth of rent).
- She also stuck around to meet the new tenant, and sold all of her furniture to her—another $500 in savings to get her started in Calgary.
- Thanks to her persistent phone calls to Sallie Mae, she was able to reduce her combined loan payments from $1,400 to $400 a month! (Daina did it through pure ingenuity: By calling repeatedly, she eventually found a customer service rep sympathetic to her plight. He helped her enroll in a program which reduced her variable interest rate of over 10% to a fixed 1% rate on her $50,000 loan, for the life of that loan, drastically reducing her payments.)
- She took the leap and is pursuing her true dream of being a fashion designer. Her stay in Canada will allow her to focus on building her portfolio. Daina has already reached out and made pretty powerful fashion connections in Calgary. This will help her earn income by starting to freelance right away.
It’s been a bit of a whirlwind: We’ve seen pink slips, huge moves (from NYC to northern Canada), and the type of financial coup that made Lauren, our financial planner, say: “I have never seen something like this happen in my entire career!”
To start your own money makeover success story find out more about becoming a client, or sign up for my newsletter.
Read the entire series with all six ladies from start to finish here: Part 1, Part 2, Part 3, and Part 4.