With financial coaching, I typically get new clients at one of these stages–
The first group comes to me because they are stressed about money, and want someone to guide them to peace with their personal finances.
Then another group arrives with more urgent needs.
Simply put–they have reached a “breaking point” and they will do whatever it takes to get out of the mess quickly.
When I first met with my client Heather, she was in the first group, but not quite ready to begin financial coaching, so I gave her a few tips that she tried to implement on her own.
Then, about a year later, she contacted me because she had finally reached her breaking point and she urgently wanted help. And like many people, she reached this breaking point during the holidays.
See–Heather is a 50 year old, single woman, who had accrued a bit of debt, and had a modest salary of $2,500 per month, so it was tough for her to make progress on her financial goals…
But then during Christmas of 2021, she found herself going further into debt in an attempt to provide a wonderful holiday for her grandchildren. With the very best of intentions, she wildly overspent by gifting toys and treasures that her grandchildren would cherish.
Heather’s daughter, knowing her financial situation, had a heart-to-heart discussion and confessed that the gifts were a burden and asked her not to do this again. Her daughter also shared that they simply did not have the space for all the new toys. To make matters worse, Heather had taken out a small loan to cover the cost of the gifts.
Demoralized by this breakdown, she decided that it was time to seek help, and finally start making real progress.
When we began working together, she had $24,000 in credit card debt/small loan debt and $15,000 in student loan debt, so a total of $39,000.
With an annual take home income of $30,000, you can see the challenge we faced.
She had two problems that we needed to address:
- Her income needed to go up.
- Her spending habits would need to change.
So first we got to work on planning a budget, and addressing her spending habits.
We also did the cash envelope system for most categories of her budget, so that she could visually see how much money she had for each budget.
She had previously used a debit card, but that did not provide the visual reminders that she needed to be successful.
Soon her spending began to change.
Next, with a few months of budget tracking, she received a sizable raise at work.
Now she was bringing home $3,800 per month, which was gasoline to her fire!
By the end of the first year of working together, not only had she not gone back into debt, she paid off $10,000 of debt!
She told me that when she received a raise, she was so happy that we were already working together. With new habits in place, this was just the boost she needed to maximize her pay raise.
The best part is–when Christmas came around in 2022, she was able to pay for the gifts in cash, which was a tremendous blessing to her family.
I am so proud of Heather’s progress. She is determined, and expects to be consumer debt free by the end of 2023!
We still meet quarterly to provide accountability for her new habits and lifestyle. She is proof that you can change at any age, at any income level and achieve your goals.
If you are curious about working together, click here for your free call. I would love to connect with you to see how we might work together to achieve your goals.
