Success Story: Lowering Debt and Raising Your Credit Score

Tired of $40,000 in debt weighing her down, Mary decided to enter the MSA Financial Wellness program.  She immediately connected with Chad, a budget and debt specialist and MSA Money Coach.  Together, they lifted the burden of debt, so Mary could live an easier life and actually enjoy her finances.

The Obstacles

When Mary first started the MSA program, she took a survey that measured her level of financial well-being.  She scored a 2.63 out of 10, which indicated low financial health and high financial stress.  As Coach Chad talked with her, he saw the reason.

Mary had five credit cards that were maxed out, amounting to $10,000 in debt.  She also had a personal loan of $10,732 and a $20,000 loan from her 401(k) that she needed to pay back.  Needless to say, the debt was overwhelming, but Chad knew there was hope for fixing it.

Little Steps for a Big Impact

Right off the bat, Chad worked with Mary on creating a spending plan and tracking expenses for a better idea of how she uses her money.  An in depth assessment of her cash flow revealed a shortfall of $630 every month.  From there, Chad showed her how little behavioral changes could have a huge impact on her finances.

Chad suggested using cash instead of credit or debit when making purchases.  The result?  Mary saw her credit card balances dropping because she was more in tune with how much she was spending, found it easier to make smart choices, and not add to her debt.

She also made a habit of finding ways to save more and more.  Mary looked into switching her cell phone plan to save $20 a month, and she made a point of shopping at grocery stores with better prices.  She even opened a savings account and is putting $50 a month into the account for emergencies and long term goals.  So far she’s accumulated $800 in savings.

As Chad talked with Mary about her new spending behaviors, he wanted to keep her encouraged and celebrate her new habits, so they discussed how to adjust her budget for fun activities, like saving up for a family vacation and setting aside money for gifts.

Bigger Options

Some of the grander solutions Chad offered for Mary’s consideration included working with a credit counseling agency or filing for bankruptcy.  Through MSA, Mary got a referral to a trusted attorney in her area who specializes in bankruptcies and could provide more information.  She also got contact information for a credit counseling agency that has a good track record for helping people manage their debt.

Because of an adjusted spending plan and due diligence in making debt payments, Mary has already reduced her debt load by $11,000.  In addition, she will be paying off one of her 401(k) loans this month and another 401(k) loan by the end of next year.  She even increased her credit score by 89 points.

From there, Coach Chad encouraged her to look to the future and focus on new financial goals within the next stages of life.  With retirement on the horizon, Mary was eager to work on building her savings.  Coach Chad connected her with Constance, a fellow Money Coach and retirement specialist who is now helping Mary better understand and plan for the financial goals and responsibilities she may have in retirement.

Overall, Mary is happy with her MSA experience.  Here’s what she had to say about working with her Money Coach, Chad:

“Thank you for your services and for the help you provide….  Chad is a wonderful encourager, and I greatly appreciate his cheerful attitude and expertise.  He is always willing to help, even outside of our meeting times, replies to my email questions in a timely manner, and tries to find the answers to my questions if he doesn’t know them (though he usually already knows the answers).  You are fortunate to have him on your staff, and I highly recommend him to others.”

Mary took the financial well-being survey again and scored a 4.25 out of 10.  That means she improved her financial health by 61%!

Talk to a Money Coach today and see how you can lighten the load of financial stress and work on meeting your financial goals, both short term and long term.  Call 888-724-226 today.

Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal, or accounting advice.  We recommend that you consult an attorney, tax advisor, or accountant regarding your unique circumstances.

This testimonial was provided by a member of MSA.  They did not receive compensation of any kind for their statement.