6 Women Unveil Their New Lives

6 Women Unveil Their New Lives

This is it: The conclusion of our first-ever Financial Makeovers. Six real women facing their fears and overhauling their financial existences over the course of eight weeks.

It's been a bit of a whirlwind: We've seen pink slips, huge moves (from NYC to northern Canada), and the type of financial coup that made Lauren, our financial planner, say: "I have never seen something like this happen in my entire career!" (Check out Daina's story to see what she's talking about!)

In case you're just joining us this week: We set each of these ladies up with Lauren, a Certified Financial Planner and expert in our Advice Center, and had them link their accounts to the LearnVest My Money Center to help them achieve their goals, whether it was saving for a baby, building their own business or rebuilding after divorce.

altSince this is the LearnVest version of a reality show (focused on balanced budgets instead of tipsy celebutantes), we're about to do the big reveal: See how these women ended their eight week crash course, and what they learned about their lives and their money.

Ashley, 29

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Ashley and her husband Jonathan have worked together to save big.

Location:

New York, NY

Occupation:

Attorney (making $90,000 to $100,000)

Biggest Accomplishment:

Consolidated her federal student loans, resulting in several hundred dollars of savings per month.

Where Ashley Started:

Ashley has $230,000 in student loans left over from law school, and since her husband, Jonathan, was awaiting his green card, he wasn't able to work. They both wanted to start saving so they could begin trying to have a baby next summer. (Read more of her story.)

The Couple's Biggest Accomplishments:

"There’s always a learning curve when it comes to money and marriage, but Ashley and her husband Jonathan really worked as a team," says Lauren.

  • They cut back on taxis, gym memberships and meals out to bring their monthly discretionary spending to under $800 a month. If they keep that up, they can make a big dent in their credit card debt while freeing up $900 a month to divide between an emergency fund and a savings account for a baby.
  • During these eight weeks, Ashley consolidated her federal student loans. It meant facing a mountain of paperwork, but she decreased her payments by several hundred dollars a month!
  • They became a two-income family again. After Jonathan's green card application was approved, he found part-time teaching work immediately, and is now searching for full-time employment, which will improve the couple's financial big picture even more going forward.

What Ashley Learned:

How tackling your finances as a team can help you.

"I've realized that it's way more fun to work through a challenge like this when you have somebody to do it with," says Ashley.

But she's also had to fight her perfectionist tendencies: "I tend to really beat myself up over the little things (like, 'Did I really need that $20 cab ride?')," she says. "So I'm trying to come to terms with the fact that I can't be good 100% of the time. It's a process."

Lauren's Parting Advice for Her:

"I want Ashley and Jonathan to pay off their debt in the next year. To do so, they need to keep making payments of $1,250 a month. They should make the minimum payment on the card with the lowest interest rate and put the rest toward the card with the highest rate. My favorite calculator for making a debt payment plan is here."

Macy, 22

 

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Macy, at home in her new apartment.

 

Location:

Cedar Rapids, IA

Occupation:

Marketing Strategist (making $36,000)

Biggest Accomplishment:

Creating a budget that will allow her to save and spend—and sticking to it when she rented her first apartment.


Where She Started:

As a recent college grad with a new job, Macy had no clue how to organize her financial life. "I am just starting out as a young professional," Macy told LearnVest. "I need tips on what to spend, save and invest—and how to make my paycheck last. " (Read more from the first installment.)

Macy's Biggest Accomplishments:

"When Macy started this makeover, she was overwhelmed by everything she'd need to do to get her financial life in order," says Lauren. "In two short months, she's made huge strides."

  • She rented her first apartment and stayed within her budget: At $635 a month, it was under 30% of her take-home pay, as Lauren recommended.
  • Macy linked up her accounts in the LearnVest My Money Center to track and categorize her spending, and learned that with $2,167 in take-home pay, her fixed expenses (including student loans) add up to $1,063. That means she can put in up to $417 a month to max out a Roth IRA for retirement.
  • She created a long-term savings goal, researching the price of the dream loft she eventually wants to buy ($250,000 to $300,000). Now she knows that by saving $500 a month, she can own a home by 30.
  • Macy also researched competitive salaries to prepare herself to ask for a raise. At the six-month mark she plans to ask for $45,000, increasing her take-home pay to $2,700 a month, and giving her the extra $500 to devote to savings. (Read more tips on successful salary negotiations here.)

What Macy Learned:

How hard it is to balance her wants now with her wants for the future.

"My primarily goal right now is saving," says Macy, "but I also want to have money for fun." Having her new apartment—and decorating it—has been a big one-time expense, but, long-term, she thinks it will actually help her save. "Now that I'm closer to work, it saves me time, so I shop for groceries and bring my own lunch."

But there are always choices: "I went to Oktoberfest in Des Moines which was really fun, but right now it feels like it's a choice between doing what I want and saving for retirement."

Lauren's Parting Advice for Her:

"Macy has set her long-term goal, but not everything's gone perfectly:  In the last 30 days, she spent $1,247 outfitting her new apartment. Now she has a $1,650 balance on her credit card. For the next three months, I want Macy to make her top priority putting $500 toward paying down that card. Then, come 2011, she can truly start saving."

Elisabeth, 41

 

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Elisabeth feels in control of her money for the first time.

 

Location:

San Rafael, CA

Occupation:

Fertility Coach (making $37,000)

Biggest Accomplishment:

Paying off three of her four credit cards in the course of eight weeks—and beginning to save for retirement for the first time.

Where She Started:

Elisabeth owns her own business but had saved next to nothing for retirement. Before her LearnVest makeover, she had variable income from her clients and credit card debt. Plus, she'd been truly afraid to take an honest look at her financial picture. (Read more about where she started from.)

Elisabeth's Biggest Accomplishments:

"To make Elisabeth feel comfortable when we started this money makeover, I agreed to take baby steps," says Lauren. "But her progress has been anything but small!"

  • In eight weeks, Elisabeth paid off three of her four credit cards by setting up automatic payments and making debt reduction her top priority.
  • She finished her book, "If I'm So Smart, Why Can't I Get Pregnant?," and committed to building her brand—and increasing her passive income—by hiring a virtual assistant to take her website to the next level.
  • She examined how she was allocating money and ended up cutting back on travel so she'd have more funds to invest in herself. Within the past two weeks, she began contributing $50 a month to an emergency fund and setting aside $200 a month for retirement, which she'll autodeposit.
  • She created a new, healthier way to allocate her earnings, setting aside 25% for taxes, 20% for a SEP IRA and 5-15% for savings goals like an emergency fund, new laptop and new car. This leaves 40-50% of her income for monthly expenses and reinvesting in the business to grow her bottom line.

What Elisabeth Learned:

Money isn't scary once you take the reins.

"The timing was right, and I wanted to break through my limitations," says Elisabeth.

While she's making great strides, fear is still her biggest enemy: "Little things—like calling to dispute a late fee on a credit card, facing my taxes or improving my credit report—still scare me," she says, "but now I feel more empowered to clean those up and tackle the big things."

Lauren's Parting Advice for Her:

"Elisabeth is on a great trajectory. The trick will be keeping this momentum when we no longer have regularly scheduled chats. For the next three months, I want her to schedule a weekly financial check-in with herself. This should be a meeting that she sets and sticks to, just like with a client. It will allow her to not think about money for the other 167 hours a week, as long as she spends one hour opening bills and tackling financial tasks."

Minling, 29

 

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Minling is teaching yoga to earn money—and make her savings last.

 

Location:

Los Angeles, CA

Occupation:

Adventure Philanthropist (Earning: $0)

Biggest Accomplishment:

Starting a side business as a yoga instructor—and getting a part-time job—to cover her variable expenses until she earns a salary again.


Where She Started:

After making $90,000 a year, Minling left her corporate job to pursue her dream career at a start-up called RoadMonkey. Now she has no salary—just equity—and is trying to see how long she can stretch her $30,000 in savings. (Read more about where she started from.)

Minling's Biggest Accomplishments:

"Minling made a major lifestyle change, and put herself in control of her money--now she thinks about cutting back as a means of investing in her future," says Lauren.

  • Minling really reconfigured the way she thought about money: She doesn't love to budget, but she linked her accounts in My Money Center and really cut back on social spending (dinners and drinks out), so she's able to pay only her $800 in fixed costs each month out of savings.
  • She established ways to make money on the side while pursuing her dream of getting RoadMonkey off the ground. She's teaching yoga one night a week and got a part-time job at Lululemon. (She even made a plan to cash in Amex points to pay for new yoga clothes, so she doesn't spend her paychecks.)
  • She set up separate accounts to track her spending, creating one for "fun" money and one for fixed costs, so she can easily see how much she's shelling out for each.
  • She began setting money aside to pay quarterly taxes, and is now keeping track of work-related expenses to maximize her deductions.

What She Learned:

How to be mindful about money.

"One of the biggest changes for me is they way I look at money," says Minling. "Before, I didn’t think too much about my spending habits. I was able to buy what I wanted because I was fortunate to have a well-paid job. Now I have to watch what I spend, but it’s not a chore anymore. It’s a choice."

She's also changing what she buys, and investing in herself through classes (like Kundalini yoga teacher training) that will eventually earn her income, instead of spending on things she doesn't need.

"Sometimes I still procrastinate and wait two weeks or so before looking at my expenses," she admits. "Staying on top of my finances each week is my goal."

Lauren's Parting Advice for Her:

"Minling needs to continue learning about filing taxes as a self-employed person. She plans to use her accountant from her corporate days in Ohio, but he charges $500, more than twice the national average of $229—and definitely more than she can afford. In the next month, I want her to find a new accountant who charges $200 or less, preferably in California where she now lives. This isn't one-time savings: It will save her big-time in years to come."

Daina, 25

 

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Daina now has utter faith in her “future financial self.”

 

Location:

New York, NY

Occupation:

Fashion Illustrator (was earning $48,000, but just quit her job ...)

Biggest Accomplishment:

With a series of phone calls, Daina succeeded in reducing her combined student loan payments from $1,400 to $400 a month.


Why She Needed a Makeover:

Daina got bad financial advice back in college: She wound up with $80,000 in student loans and poor credit—a combo that left her feeling powerless. But she's young, has a great career in fashion and was finally ready to make some huge changes. (Read more about where she started from.)

Daina's Biggest Accomplishments:

"If anyone has ever found themselves overwhelmed by their financial situation, Daina’s story is a shining light of encouragement," says Lauren. "In eight short weeks she's changed not only the path of her finances, but the path of her life."

  • Daina made a big decision in the course of this makeover—to leave New York City and move to Canada to live with her boyfriend, Oliver. By not renewing her lease, and convincing her management company to get a new tenant a month early, she saved $1,400 (a month's worth of rent).
  • She also stuck around to meet the new tenant, and sold all of her furniture to her—another $500 in savings to get her started in Calgary.
  • Thanks to her persistent phone calls to Sallie Mae, she was able to reduce her combined loan payments from $1,400 to $400 a month! (Daina did it through pure ingenuity: By calling repeatedly, she eventually found a customer service rep sympathetic to her plight. He helped her enroll in a program which reduced her variable interest rate of over 10% to a fixed 1% rate on her $50,000 loan, for the life of that loan, drastically reducing her payments.)
  • She took the leap and is pursuing her true dream of being a fashion designer. Her stay in Canada will allow her to focus on building her portfolio. Daina has already reached out and made pretty powerful fashion connections in Calgary. This will help her earn income by starting to freelance right away.

What She Learned

Anyone can master her finances, if she puts her mind to it.

"If I had to say one thing about this entire experience, I'd say it has really opened my eyes to what is achievable when your will is greater than your fear," says Daina.

"I've relieved myself from a huge expense that was weighing heavily on me and have new tools that I will carry with me through the next adventure in my life," she says.  "I've gone from being paralyzed with anxiety, in debt, unconfident and genuinely scared of what was going to happen next to being so optimistic about my future financial self."

Lauren's Advice for Her:

Daina will be going to Canada with about $5,500 in savings. I’d recommend setting up a student loan account with $3,500 (or roughly nine months' worth of payments) in it, just to be safe. With $2,000 left over she’ll have to squeak by on very little—which she's used to—but I want her to aim to have freelance income coming in by January 1.

Hannah, 32

 

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Hannah is all smiles after launching her consulting business.

 

Location:

Miami, FL

Occupation:

Marketing (was earning $70,000, until she got laid off)

Biggest Accomplishment:

After life dealt her a pink slip, launching her own consulting business and landing $10,000 in retainers the first month.


Why She Needed a Makeover:

Hannah was trying to rebuild after a divorce left her finances in tatters and had her on the brink of bankruptcy. She's raising two children, living paycheck to paycheck and, in the course of the makeover, lost her job. (Read more about where she started from.)

Hannah's Biggest Accomplishments:

"When Hannah and I had our last check-in, she mentioned that she wished this was her first—for good reason. After a series of really tough setbacks, things are finally coming together," says Lauren.

  • Although it wasn't easy, Hannah had a tough talk with her kids, asking them to go on a "money fast" with her, seeing how long they could go without spending anything.
  • Hannah used to have stellar credit: a score of 780, which her divorce destroyed. But she faced the music and began the process of rebuilding her credit by tracking her score monthly on Creditkarma.com.
  • She survived: "Sometimes," as Lauren put it, "just getting up and facing the day counts as progress." But Hannah not only bounced back, she began to rebuild her life on multiple fronts: at home, in her financial life and in her career.

What She Learned:

That regaining your confidence is possible, even when times are toughest.

"I feel more confident than I have in months," says a newly invigorated Hannah. She's loving working for herself, and—with her billings increasing—feels as though she has momentum.  "I'm actually really enjoying consulting, which allows me to stay home with my kids, not have a commute and not have a salary cap," says Hannah. "So far, I've got four clients."

But she knows she's just getting started—and needs to start saving for her retirement and her kids' college.

"I want to pay an accountant to help me keep track going forward—I want to do everything officially and by the book," she says.

Lauren's Parting Advice for Her:

"This year, Hannah's top priority is saving up an emergency fund with 12 months of living expenses. While $10,000 coming in may sound rosy, working for yourself means you don't know how much you'll be earning at any given time. With her necessary expenses around $5,000 a month, Hannah should spend only that—and put anything more she earns into savings. Her goal is $60,000 in the bank by 2013. The good news is, working for herself, she can determine how quickly she gets there."

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