In June of last year, I started working with Matt and Sarah, and asked them to tell me their biggest financial struggle.
They replied, “Spending like we have money when we don’t.”
Is there a person reading this who hasn’t felt like that at one time or another!! (I doubt it!)
I dug in a bit deeper to understand their situation.
Together they have an income of $75,000 with three children at home. Sarah had tried to get their finances in place in the past, but always felt defeated by the end of the month.
Goal: By working together, they wanted to get a budget in place, get a plan to pay off debt and plan for retirement.
Matt drives a truck and often works long hours, and will always accept overtime if it is available. Sarah works at their church part-time to bring in additional income.
The couple is in their late 40s/early 50s, and they do not have a mortgage. However, they do have a child with diabetes, which requires expensive insulin treatments and a special diet.
They leaned on credit cards and a home equity line of credit when something popped up, like a car repair, new tires or medical expenses. Each year, Matt and Sarah relied on their tax return to pay for property taxes. Without an emergency fund in place, they were vulnerable to life’s unexpected expenses, never quite feeling like they could catch up.
Although Matt and Sarah were struggling…they had one non-negotiable for me–they wanted to tithe to their church more than 10%. They felt led to do this, and we needed to come up with a plan that included generous tithing to their church.
So we worked out a monthly budget that would give them more stability and confidence in future months. We included the actual expenses that they would incur over the coming months, not just the ones that were due right now.
This means we built out an emergency fund of $1,500 so that they could use that instead of credit cards with 16% or 20% interest attached. Next, we started budgeting for sinking funds, including medical expenses, property taxes and Christmas. We also included their church tithing into their budget so that their spending aligned with their priorities.
In just months, they were able to cash flow everything they needed and put those credit cards away for good. Christmas, medical expenses, new tires…they were all covered in cash with their sinking funds. By using the budget and tracking their spending, they have the security of an emergency fund, they are paying down debt, and building for their life in retirement. Now they are parents who don’t feel the massive weight of financial stress.
The best part of their story is that they didn’t need to make more money in order to do what they wanted with their finances. They actually did have the money to spend, but it took reorganizing the budget to see it. We were able to redirect funds and spending with their monthly income.
They recently said, “Where were you years ago when we needed you?” Sometimes you just need “fresh” eyes looking at an old problem to get it fixed!
If you could use a fresh perspective on your finances, schedule a call, and let’s talk about how my services may help you.
