Save As You Go
Essence
Committed to planning and discipline--not denial and sacrifice--the Casey family learned they could pay off their debt, start a nest egg for the future and begin to enjoy prosperity
In 1996 they were simply young and in love--college sweethearts at Hampton University. Within three years, Janac and Camilo Casey were married and parents of two boys, Olajuwon and Ajamu, now 4 and 2. They had moved across the country to Oakland, begun teaching careers and--along the way--racked up $32,000 in debt, most of it in defaulted student loans. But the young family also had credit-card debt and old dentist bills, and often couldn't make it until the end of the month without borrowing $100 or more from Camilo's mom or dad.
"It was rough," says Janac, now 27. "I hadn't been working, so that I could be at home with the kids. We had a savings account with no money in it. And we just didn't know where our money was going." Janac was looking for a full-time teaching position but meanwhile taking on whatever substitute assignments she could.
Camilo, 28, who often felt overwhelmed by the pressing needs of his family, says there was no balance in the couple's spending habits. "There were periods where I'd start to feel deprived after focusing solely on our needs for so long. Then I'd splurge on something and we'd end up in the hole."
ESSENCE paired this couple with noted Bay Area financial-recovery expert Glinda Bridgforth, author of the forthcoming Girl, Get Your Money Straight! (January 2001, Broadway Books), who worked with the Caseys for nearly five months to help them get a better grip on their cash flow. By showing them how to chart and follow a spending plan (see the sidebars "The Caseys' Spending Plan", and "Make a Spending Plan You Can Live With," end of story), she helped point Janac and Camilo toward their financial goals. They hoped to build a solid nest egg to cover immediate crises and, eventually, to put toward buying a home. They also wanted to be able to afford travel--both as a family and as a couple (the young parents had never had a vacation alone).
THE CASEYS' SPENDING PLAN OctoberINCOME March 2000 2000(*)Camilo $2,326 $2,833Janae 1,362 2,684Loan from family 150EXPENSES Projected Actual ProjectedFood (groceries, meals out) $455 $526 $475Shelter (rent, utilities, phone) 1,065 90 1,055Self-care (health and medical, clothes, dry cleaning, hair, cosmetics and toiletries) 90 233 220Self-improvement (exercise, workshops, spiritual) 15 0 40Dependent care (child care, diapers) 975 975 730Transportation (car payment, gas, tolls, insurance) 586 925 639Entertainment (videos, movies, concerts) 135 75 75Investments (savings) 0 0 100Allocations (taxes, birthdays, vacation travel) 100 35 638Debt repayment (credit cards, student loans, dentist) 165 70 1,545 (**)TOTAL EXPENSES 3,586 3,838 5,517TOTAL INCOME 3,688 3,838 5,517Difference +102
(*) October incomes reflect Camilo's raise and Janae's new full-time job.
(**) With this October payment of $1,545, the Caseys will pay off all outstanding debts except for their student loans.
Bridgforth's prognosis for their financial health was good. Neither Janac nor Camilo appeared to be extravagant spenders, and they were well motivated to take control of their finances. Still, their journey would not be without obstacles. Like most of us, they would need to become much more disciplined. Bridgforth advises clients to record purchases on a daily basis, but the Caseys admit they usually found themselves at the end of each month of their counseling rummaging through a pile of receipts--trying to recall what was spent where.
To move forward they also needed to reconcile their somewhat divergent personal financial priorities--a common quandary for couples. Janac desperately wanted to pay down their debt--roughly 75 percent of which she brought to the marriage because it had taken her $25,000 in student loans to get through college. On the other hand, Camilo acknowledged that while debt repayment was important, his highest priority was building up their savings so they could meet any unexpected expenses and improve their quality of life.
Bridgforth, who has helped many clients--whether their annual incomes were $30,000 or $300,000--lift themselves from financial chaos, saw an opportunity to put the Caseys on course for a long, prosperous future. Since they had few assets and were striving to support a growing family on entry-level earnings, the money expert introduced them to a basic program intended first to discipline their spending, then establish an effective plan for debt payment and savings.
The couple soon learned that their childhoods had taught them about responsibility and making ends meet, but little about prosperity, planning or investing in the future. "I believe affirmation, prayer and visualization can help us claim our financial goals," says Bridgforth. "The Caseys, like many of us, weren't used to thinking that way. But prosperity is achievable when we do our homework and our inner work."
Over a 17-week period from late February through mid-July, the couple met with Bridgforth for five face-to-face sessions, as well as conducting interim phone consultations. In the process, they discovered--much to their surprise--that with careful planning they could afford "dates" and other treats once in a while, even on their limited income. And although the Caseys proved not to be diligent record keepers--a common difficulty, says Bridgforth--after only a few months of paying closer attention to their money, they moved within reach of their financial goals. They are now better positioned to allocate their future income more wisely between saving and spending, and Bridgforth has helped them project their use of funds up through the end of the year.
Of course, what looks good on paper doesn't always play out in real life. How much the Caseys' financial picture ultimately improves depends largely on how well they track their spending and make choices from now on. But here's an account of the first 12 weeks of their journey, when ESSENCE followed them closely.
Week 1
It is the couple's first-ever meeting with a financial manager. And to Janae, it feels "almost like a therapy session." eager, while Camilo's optimism is tinged with the understandable caution of a brother brought up to know better than to put out all his business.
Bridgforth uses a holistic approach to money management, one that considers the family's emotional and spiritual support within the practical context of their money goals. So she asked the couple about their thoughts on money and got them to trace their financial concerns as far back as childhood, as she explained the way subsequent sessions would proceed:
The foundation of any sound financial-organization program, Bridgforth believes, is the spending plan--so named because she believes that other word, budget, connotes limitation and deprivation. Each month the Caseys would need to project their expenses--including food, shelter, transportation and child care--then make it jibe with their projected income. Based on the prior month and some rough estimates of their expenses, they were looking at $3,688 coming in during March and $3,586 going out, thus anticipating a $102 surplus at the end of the month. We'll be on our way toward savings in no time, Janac says to herself.
Week 2
Only one week into the recovery plan and already the two are reeling from unexpected blows. First, a big increase in gasoline prices has already used up too much of the $586 set aside that month for transportation. Trips to the grocery without the discipline of a shopping list have them facing an overrun on their monthly food allotment of $455. Then their eldest son comes down with a fever. Camilo, the naturopathic devotee in the family, believes Olajuwon should see an iridologist to help them determine how to keep him healthier more naturally. Such treatment would not be covered under their health plan, but Camilo--a strict vegan--is committed to alternative healing. The cost of the visit, coupled with the purchase of certain supplements, shoots the family's personal-care outlay up to $233, more than doubling their projected figure of $90. custom binders