Note: The couple’s names have been changed for privacy.
Robin and James were young professionals in their 30’s when they contacted Money Coach Kathryn Mandelcorn. They were frustrated because they made a combined income over $150,000 but they had $45,000 in consumer debt and felt they weren’t adequately saving for their future. They didn’t see how they could pay off the debt and invest for retirement, without sacrificing their dream to buy a home and invest in further education. They felt like travel and other leisure activities were completely off the table if they were to have any hope of turning things around.
“When I met Robin and James, I could see they were a very savvy couple,” says Kathryn. “They knew a lot about investing, they had a good idea of what they should be doing, but they were going in circles financially. They were paying down debt then going right back in. There was a big disconnect between knowledge and implementation.”
When they reached out to Kathryn, they couldn’t have known it, but they were exactly the type of client that led her from a career in traditional investing and financial planning, to becoming a money coach. “When I was working in the investment industry, I met so many clients doing the right things for their future but struggling in the present. They didn’t seem to have any peace of mind around money day-to-day. I had clients that made hundreds-of-thousands a year, yet they were living paycheque to paycheque.”
It was six years ago, when Kathryn was on maternity leave, that she saw a blog post written by Sheila Walkington about Sheila’s work as an independent money coach, working with people around cash flow issues. But it wasn’t until months after Kathryn had returned to work; and found she was deeply dissatisfied by the limitations on how she could help people, that she remembered that post and did an internet search. She found that Sheila Walkington had co-founded a new venture with Karin Mizgala and they were growing a network of Money Coaches across Canada.
“I was so intrigued,” Kathryn says, “but I had a good paying job, and I didn’t know much about this new company. So I did my due diligence; I contacted and chatted with both Karin and Sheila, I even put myself on their spending and savings plan to see if it worked for me, and it did. I knew Money Coaches Canada would be the right move for me and I’ve never looked back. I continue to use the spending and savings plan, because it allows me to achieve my goals and enjoy life right now.”
Kathryn says she was so optimistic for Robin and James. “They had such a willingness to change and an understanding of what needed to be done, they just needed someone who could show them how to turn their knowledge and enthusiasm into a sustainable plan, and I knew I could be that person for them.”
The things Robin and James wanted from life weren’t unreasonable; a home, a retirement plan, travel, sports equipment, further education, and emergency savings. But like many people, as the money came in, they felt uncertain of where they should be directing it. Should they pay off all the debt before saving? Should saving take priority over debt? What about saving for a down payment on a house? Where did that fit in the picture? And were they supposed to take “fun” off the table until they reached the other goals?
“The first thing we did was sit down and articulate all the dreams and goals they had, short term and long term,” says Kathryn. “Then we talked seriously about when they wanted to do these things. They wanted a home, but when? Did they want to buy a home within the year? Or within three or five years? Having a time frame is really important, and as a couple it’s important to discuss your goals together. There may be conflicting priorities and talking about them in context of your overall spending allows you to work together and communicate in a positive way.
Kathryn says that many people want to skip this first step and get right down to crunching numbers, but being clear about what you want and when you hope to have it is the foundation to the plan. Without that foundation, without the emotional connection to the why of your spending and savings plan, it’s difficult to stick with it over the long term.
With the foundation in place Kathryn was able to help Robin and James prioritize their goals, and for this young couple getting out of debt was their number one priority.
“We created a plan that would allow them to continue with a modest payment towards RSPs, and made sure they could still enjoy some of their outdoor sport activities while putting the biggest focus on repaying their debt. With this plan they would have paid off the $45,000 in 18 months, but the energy that came from finally feeling in control motivated them to pay it off in only 12 months!”
Robin and James are working towards new financial goals and continue to work with Kathryn to build wealth and stay accountable to their plan.
“I’m so happy for the financial strides they have made,” says Kathryn, “They are debt free and have increased their net worth by $100,000. But the happiest moment for me, was when Robin told me she doesn’t wake up with a heavy feeling about money anymore. I’ve worked in the financial industry for 17 years, but it’s comments like that, that make money coaching the most rewarding work I’ve ever done.”