(The following story is used by permission and the clients names have been changed for privacy)
In 2012 Frank and Alison had a combined income of $175,000 yet found themselves arguing about the purchase of raspberries. When they realized financial stress was tearing their relationship apart, they turned to Money Coach Christine White for help.
Frank had recently been through a consumer proposal that had resulted in the couple downsizing their home to pay off debts. Yet despite that, he would often slip back into his “you only live once” attitude, and new debt began accumulating.
The new debt made Alison anxious. Apart from their recent struggles and downsizing, she knew Frank had declared bankruptcy in his early twenties. She threatened to walk out of the marriage if his spending brought them down again.
As their Money Coach, Christine helped open-up communication. Once Frank and Alison were talking about their feelings, instead of fighting, they were able to understand how his overspending and her fear of spending were both contributing to the problem.
The next barrier Christine tackled was the division in their finances. Frank and Alison had divided up expenses and each managed a share. With no joint plan they hobbled along month to month, never really certain of the big picture. When unexpected expenses popped up, (vet bills, back taxes, car repairs) they felt that the situation was spinning out of control. Christine suggested that the couple have a joint account for paying bills, but Alison was very hesitant, as her trust in Frank, financially, was all but gone. Christine encouraged them to move forward with a joint account, but each would also retain a personal account for their individual spending.
Once all expenses were on the table, Christine showed the couple how to use the Money Coaches On Track Money Management System by setting up virtual envelopes for everything from weekly expenses to RESPs, entertainment, kids’ activities, house/appliance upkeep, etc..
Aside from his job in media, Frank also teaches at a local college eight months a year. In the past they had enjoyed the extra income over those months, but in trying to continue their lifestyle during the off months, they racked up thousands of dollars in debt. Christine encouraged them to put part of his teaching pay away each month, into a “summer savings” account, which they could draw from during the off months to keep their monthly income consistent throughout the year.
As they became excited about their new goals they were willing to make some sacrifices to reach them sooner. For example, Frank downsized his car and they both cancelled their personal trainers. They set a limit of $350 weekly for discretionary spending – gas, groceries and incidentals – and they stuck to it.
They also looked for ways to increase income. Frank worked overtime when possible and Alison, who also worked in media during the day, started tutoring in the evening and walking dogs on her lunch hour so they could make extra debt payments.
Once the couple was comfortable with their new goals they began checking in with Christine once a month. They were excited to see the how well the On Track system was working. When their washer broke they had money in their house account for a new one, when it was time to pay their children’s summer camp fees, the activities account had it covered. The same was true for a family trip to Niagara Falls and an unexpected car repair.
Alison can now buy herself something without feeling stressed, because she’s confident that everything is accounted for. Frank isn’t as inclined to overspend because he realizes it means shortchanging another one of his goals – such as travel. His money has more value and purpose to him now.
Frank and Alison set a date to be consumer debt free, and paid down $15,000 in one year! They have been able to increase their weekly spending amount and start putting an extra $500 a month on their mortgage to get it aligned with Frank’s planned retirement date. They contribute regularly to RSPs and RESPs. They even put $300 a month into an “Our dream” account, for either a trip around the world or to buy a home in Mexico. 
One thing they don’t do anymore is argue about raspberries.
Contact one of our coaches if you would like to know more about our On Track Money Management System.
