Member Success Story: Eliminating Debt While Reaching Your Goals

a hand reaching up to the blue sky, pointing to a cloud shaped like a wife and child and husband holding hands; and there's a cloud shaped like a dollar sign, one shaped like a car and another shaped like a house

Nathan and his wife had plenty of dreams, like going to Europe, buying a house, and starting a family, but one huge obstacle stood in their way: debt.  Their Money Coach, Lee, showed them how to incorporate debt stacking into their financial plan and still make headway with their short, mid, and long term goals.

Eliminating Debt

Debt stacking is a debt management plan where you pay as much as you can on one debt (usually the debt with the highest interest rate or lowest total amount) while paying the minimum on the rest; once you pay off that first debt, you move that allocated amount to the next debt, and continue until all debts are paid off.  Many MSA members like this approach because you can easily see your progress as each debt is crossed off the list.

In order to implement debt stacking, Nathan and his wife needed to know exactly how much money could be allocated to debt payments, and Coach Lee showed them how to get the answer.  In creating a spending plan and tracking expenses, they discovered ways to change spending habits, so they could put more towards debt payments and stay on track:

  • They paid ahead on their car payments so that money could be reallocated to credit card debt.
  • They started using the envelope system in order to make sure they didn’t overspend in other expense categories (which would consequently decrease the amount going towards debt payments).
  • They talked about how to adjust W4 withholdings in order to boost their monthly paycheck.

Reaching Goals

With their debt strategy in place, Nathan and his wife jumped at the chance to work with Coach Lee on other financial goals and learn the smart approach to new financial situations.  For instance…

  • When Nathan’s wife got a raise, Lee suggested using that extra income for investing in an IRA since Nathan didn’t have any type of retirement plan.  Lee even got them lined up for a consultation with one of MSA’s retirement specialists.
  • They wanted to buy a house, so Lee discussed how to position themselves financially for purchasing a new home in two years when they’re debt free (other than the mortgage).
  • As they shared hopes of starting a family and traveling to Europe, Lee had them prioritize their goals and create an action plan for accomplishing each goal while still having emergency funds in place.

Because of the guidance from their Money Coach, debt no longer stands in their way.  After two short months with MSA, Nathan and his wife have paid off accounts with a credit union and Home Depot.  They used what they learned from their consultations to make the most of their finances; for example, Nathan got extra money from work that wasn’t expected, so they paid off the car and her ring (around $8,000 and $2,000 respectively), and they still have some money left over.

Nathan and his wife gained so much, and Coach Lee had a blast helping them.  Lee had this to say:  “They are very positive, outgoing, and enthusiastic people.  They have achieved just about every short term goal (debt reduction, emergency savings, and general savings) that we have created.  They are now on track for their long term goals of traveling abroad, returning and settling down to have their first child… all while being in a positive financial position.  It is a pure joy working with a ‘team’ such as they are.”

When Nathan and his wife entered the MSA program, they took a survey that measured their financial well-being.  The couple scored 5.25 out of 10 indicating financial stress and moderate financial wellness.  After working with their coach, they improved their financial well-being and boosted their score to 8.25.

Your Turn

Take a page from Coach Lee’s playbook and try out some of the financial strategies mentioned above, like the envelope system.  The envelope system is where you put allotted amounts of money into different envelopes, and each envelope stands for a particular expense.  For example, if you allot thirty dollars for entertainment for the month, you mark an envelope “entertainment” and put thirty dollars into it.  You only use money from that envelope, if it’s for entertainment, and once it’s gone, you’re done for that month.  It’s an awesome way to keep track of your money and stay in the budget.  It’s also great for saving money.  If you’re saving up for something big, label an envelope and start putting your savings in it.  That way, you don’t accidentally use the money for some other purchase!

For even better results, work with a Money Coach and enrich your financial situation just like Nathan and his wife.  If you have obstacles standing in the way of your dreams, your Money Coach can help you overcome financial challenges and reach your goals.  Get started by calling 888-724-2326 today.