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Sally and Richard appeared to be like most middle-class Americans. They each had new cars with average car payments. They each had student loans and several credit cards with outstanding balances on them. Each of them was making good money and had an active social life. Their credit scores were each in the upper 700s.

Photo by NICHOLAS BYRNE on Unsplash

As time went on, the house they bought began to need major repairs. First, the water heater went out, and not too long after that the HVAC system needed replaced. The home inspector had assured them that everything was in good working order when they bought the house about four years ago.

They were able to pay for the water heater to be replaced from their tax refund, but there wasn’t enough left over to cover the HVAC replacement. Fortunately for them, or so they thought, the company doing the replacement had zero down and zero-interest financing option for 12 months. Silently they rejoiced at the opportunity to finance it without any down payment or interest for a year. They figured their tax refund next year would be able to pay off the loan before the zero-interest period expired.

Every month they religiously paid the payments to keep within the requirements of the loan. Then, five months into the loan, Richard lost his job. He was able to get unemployment, but the weekly payments were a small fraction of what he brought home each week. He earnestly applied to jobs and went on several interviews. He had researched the company before the interviews, felt that he answered their questions properly, and followed up with a thank-you note to his interviewers. Unfortunately, he never heard anything following the interviews.

The days turned into weeks and the weeks into months. As time went on, Richard began to become depressed that he was not able to find a job and he began to doubt himself. What he didn’t consider was that there were thousands of other people out of work and applying for the same jobs that he applied to. To compound the matter, Richard’s friends and family began to question him about his inability to get a job. Sally also began to become upset with him thinking that he was purposely sitting around instead of finding a job.

On top of Richard’s dispirited view on his circumstances, the bills began to get behind because the unemployment was not stretching as his old salary did. The payments on the HVAC loan eventually fell late one month and they received a letter a few days after informing them that because they had failed to make their payments on time the deferred interest was now being assessed to the whole term of the loan.

Because the unemployment was less than he had been making, the balances on their credit cards continued to increase and so did the amount of the monthly payments on them. This caused them to have to cut back on their social life and weren’t able to go out with their friends like before. Because of this, their friends begin to talk with them less and Sally and Richard began to fight more because they were stuck at home instead of our enjoying themselves with their friends.

After a particularly bad fight, Richard talked to the pastor at their church and explained to her what was going on. The pastor asked Richard if he thought Sally would be open to talking with a financial coach that she knew and if Sally would also be open to meeting with the pastor about their marital difficulties. Richard told the pastor he wasn’t sure about either thing but would ask Sally. When Richard told Sally he had talked with the pastor and the pastor suggested they talk with a financial coach and the pastor, Sally was hesitantly agreeable. She figured they needed help, but was uncomfortable talking with their problems with others. Sally was also a little confused about talking to a financial coach since they didn’t have any available money to invest and didn’t see how buying stocks and other investments would help their situation.

When the met with the pastor, Sally asked her why she thought it was a good idea for them to talk to someone about investing their money when they didn’t have any extra and they weren’t able to pay the bills they have. The pastor explained to them that a financial coach doesn’t handle investments and that a financial coach helps individuals get control of their finances by working with them to set up and maintain a budget, create a plan to pay off their debts, and establish an Emergency Fund for life’s unexpected events. Sally told the pastor that they’ve had their fair share of unexpected events. She even said that she now wishes that they had had an emergency fund before everything happened to them. The pastor assured both of them that she has referred several people to financial coaches over the years and the people have had great results from working with them.

During their first session with the financial coach, the coach asked them what they wanted to achieve from meeting with them. Both Sally and Richard told the coach that they wanted to be able to relieve the stress they felt around their financial issues and to be able to go out with their friends again. The coach probed them a little more and was able to glean from them that they wanted to be able to begin to have children, save for retirement and their children’s education. They also wanted to be able to go on trips with each other, their family and friends. Additionally, they wanted to be able to give to a charity that was important to both of them.

The coach informed them that all of these things along with several that they hadn’t thought about were possible. He told them that while things seemed bleak at the moment, once they developed a plan and became committed to working the plan, their life would look much different in a short time. He also told them there was a good chance their marriage would improve once they began working together and their money issues were not such a focus of their days.

Together, Richard, Sally, and the coach set up a budget for the two of them and a plan for them to get current on their bills. The coach also talked with Richard about finding another job and helped him restore his confidence in himself. Both of them left the coach’s office feeling better, but still unsure whether this whole thing would work.

A couple of weeks later, they again met with the coach and reviewed their progress. The coach was delighted to hear that the two of them were following the budget and were able to begin becoming current with some of their bills because they didn’t unconsciously spend their money on whatever came along. They told him that they were still struggling with things, but felt things were getting a little better. The coach complimented them and gave them some more direction to follow along with encouragement they were on the right path.

At their next visit, the coach asked them how things have been going now that they’ve been working on this for about a month. The two were happy to tell him that they were now current on all of their payments and that Richard had an interview for a new job. The coach was ecstatic at the news. They again reviewed the budget and made some minor changes to include things Richard and Sally had forgot about in their original session. The coach also told them that since they were now current on their monthly expenses and had some money left over each month, it was time to begin setting up their Emergency Fund. He told them how to go about doing that and set a goal for them to have $300.00 saved by their next visit. The two of them were a little skeptical they could do that, but the coach assured them that by staying on their budget they would be able to do it.

The next month when they met, Richard and Sally were glowing when they told the coach that they had saved $500.00 for their Emergency Fund by trimming their household expenses for the month because they desperately wanted to beat the goal the coach set. Richard also told the coach that his interview went well and he would be starting his new job next week. The coach rejoiced with them at both pieces of good news. He also informed them that once they knew how much Richard would be making, they would need to redo their budget to include the new income. He also cautioned them to keep from looking at the new income as a windfall they could use to spend on things that they hadn’t been able to do for a while. The coach recommended another meeting after Richard received his first pay so they all could revise the budget based on the new income.

During the following months, Richard and Sally continued meeting with the coach and were able to establish their Emergency Fund and pay off two of their credit cards. The coach celebrated their success and helped them strategize how to continue paying off their debts.

Three years after they first met with the coach, Sally and Richard were now debt-free, had a 6-month Emergency Fund, a new baby and a stronger marriage than they ever thought was possible. They have even been able to start contributing to the charity they told the coach about during their first session. Their future is looking so much better than before.

I hope today’s blog was encouraging to you and provided information to help you and others better handle their financial matters. My purpose through these blogs is to inform the reader about money and financial issues so that we all can become better managers of our assets. If you like what you read, make sure to sign up so you can receive my weekly posts. The goal of Take Two Financial Coaching is to provide the necessary information to help families and individuals break the chains of debt, build lasting wealth, and become outrageously generous.

For those who are tired of being in the rat race or just want to better manage what they earn, I am available to have a Free 60 Minute Conversation to discuss your situation and how I can help you change it. Go to my calendar at https://ramseycoach.com/taketwofinancialcoaching to arrange a time that works for you. You can also email me at taketwofinancialcoaching@gmail.