Andrea, a 27-year old graduate with a Master’s degree grew up in a middle-class family, but her parents were not able to help her pay for college. As a result, she now owes $60,000 in student loan debt – not only to pay for tuition and fees, but also to help with living expenses. Andrea’s friend suggested she get a credit card to help establish her credit. Because she did not know how to manage her finances, she maxed out the card and now continues to make the minimum payment each month.
After graduating and finding a stable job, Andrea purchased a car as a gift to herself. Because of her limited credit history, she financed her car at a 14% interest rate for 72 months (6 years). Her job pays her $36,000 per year. She brings home a little under $2,500 after taxes. Andrea enjoys hanging with her friends, going out to eat or to watch a movie. She also loves buying designer label purses and shoes. On social media, Andrea gets a front-row seat to her friends’ lives. They are enjoying exotic vacations; getting married and starting their families; and moving into their new homes. While she is happy for her friends, she silently wonders why she is constantly struggling to keep her head above water. She is stretched-thin and frustrated.
Andrea considered purchasing a home. Her banker suggested she pay off some of her debt first. Obviously, she knows it’s a good idea, but she doesn’t know where to start. She contacted Your Budget Coach to help her figure out how to take control of her money in enough time to afford a home.
Our clients are usually young women, who, like Andrea are successful in their careers, but are having trouble maintaining their finances and have accumulated significant debt – whether it’s student loans, credit card and/or car loans. They see their friends enjoying their lives and families and feel as if they have missed the bus. They have lots of ‘stuff’, but nothing tangible enough to help them achieve wealth. Unfortunately for many young women, their parents did not provide positive lessons about finances. Sadly, many of their parents didn’t have a clue either. They learned how to stretch their dollar to get what they needed, but the thought of becoming wealthy or even debt-free for that matter was never present.