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Financial Fitness Challenge

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Four families reveal incomes, debts and goals

By Jeanette Bennett, utahvalley360.com

This year’s Utah Valley Magazine weight-loss challenge is about losing the heavy burden of money woes and gaining financial strength.

In our January/February 2011 issue, we issued the call for those willing to go toe-to-toe with Alpine’s Ross Jardine, successful entrepreneur and author of “The 60-Day Money Miracle.”

Now meet the four families we’ll follow through 2011. They bravely revealed their debts and their incomes in exchange for a personal financial coach.

One featured family owes more in consumer debt than many families take out in a mortgage. Another has their house paid off but wants help making investments on their tight income. The only traits these four families have in common are their positive attitudes and openness about their challenges.

Kristy ricky

Kristy Barlow, Age 28, Part-time personal assistant for Realtor

Ricky Barlow, Age 31, Army National Guard

Hometown Provo

Family Two children: Brandon (age 3) and Katelynn (14 months)

Annual household Income $35,000 to $40,000

Debts $20,000 credit card debt; $6,500 car loan 

Goal Rebuild credit and work toward owning a home again

The lowdown

Ricky is fulfilling his lifelong dream of joining the US Army while Kristy is living with his parents in Provo and caring for their two young children.

The bad news

The economic crisis hit the Barlows just as they became parents. They also went from being annual $100,000 earners to losing their jobs and being victims of a ponzi scheme.

The good news

Kristy has limited expenses living with her inlaws.

“It is so helpful to have minimal expenses right now, but I still wonder where all of our money goes,” she says.  “Unfortunately, I learned early on that retail therapy is a great reward for working hard. But I don’t do that anymore unless I’m buying things my kids need.”

Money talks

Kristy’s parents both worked while she was growing up — her dad as an entrepreneur and her mom at a grocery store.

“We had a work hard, play hard mentality,” Kristy says. “I was never taught to save. Then when Ricky and I got married, we were big earners and spenders.”

Ricky grew up as the son of a successful doctor and began working at age 16. He has a work hard, serve first philosophy.

“When things got bad for us financially, he spent time serving those around us. He was the first one out shoveling walks for the seniors in the neighborhood,” Kristy says.

Work it

Kristy has had a job since age 13 when she earned her way to Washington, D.C., on a school trip. Since then she has held many positions, including developing million-dollar programs for Krispy Kreme. Now she works part time while Ricky is training for his Iraqi deployment.

Ross the financial boss 

   The Barlows have experienced the perfect financial storm and survived. Having a spouse serving in the active military makes their situation even more challenging. This family has endured great personal hardship while Ricky has been rendering every Utah Valley resident a great service. We all owe them a debt of gratitude. While difficult lessons have been learned, they have an incredibly positive outlook, and I’m confident the path back to the lifestyle they once enjoyed will be a short one.

1

Jen Barney, Age 27, Rural mail carrier for Lehi Post Office

Ben Barney, Age 28, Technician at Techna Glass

Hometown American Fork 

Family One daughter, age 5

Household income $87,000

Debts $114,000 in car loans, school loans, credit cards

Goal Pay off debts in order to one day buy a home

The lowdown

The Barneys have the equivalent of a mortgage payment without a house. They haven’t taken a vacation since their 5-year-old daughter was born.

The Barneys pay approximately $2,650 in daycare expenses each year. This American Fork couple feels that most of their money goes to paying credit card bills.

The bad news

The Barneys have opened a couple dozen credit cards and enjoyed big Christmases and big purchases. They developed a false sense of wealth when they began making good money in their early 20s.

The good news

The Barneys make a good income and have a strong desire to learn and change. They also have good credit, which means they receive regular credit card offers (which takes us back to the bad news).

Work it

“I got my first credit card when I was 16, and I thought I could buy whatever I wanted,” Jen says.

Ben grew up as a saver.

“If my parents gave me lunch money, I’d save half of it,” he says.

When they got married, they began earning good salaries and developed spending habits to match.

“When we go on a date, we go on a date!” Jen says. “We love Red Robin, Chili’s, movies and popcorn.”

Changing those habits will be the hardest part for the Barneys.

“It’s hard when we’re tired after work and we want to grab KFC or a pizza,” Ben says. “It’s challenging when it feels like it’s all work and no play. I try to get overtime whenever I can to bring in more money. We’d like to get to a place where we’re not just working to pay bills.”

Ross the financial boss 

   The Barneys have solid incomes, but their unchecked spending has stretched them beyond their financial limits. They are fortunate to have realized they have a challenge before they plunged off the debt cliff. They are clearly at a financial tipping point. With a solid budget and some new spending habits, they will be on a fast-track to debt freedom. Their energy and enthusiasm for a better life will help them stay on track when difficult choices need to be made in the weeks and months to come.

Leichtys

Beth Liechty, Age 43, Piano teacher, full-time college student

Kent Liechty, Age 46, Mechanical engineer with Rio Tinto

Hometown Cedar Hills

Family 4 children (one is on an LDS mission)

Household income $121,000

Debts $280,000 mortgage; $8,000 truck loan

Goal Learn how to budget wisely to make room for vacations, home repairs and education

The lowdown

This Cedar Hills family has all of the makings of financial freedom but has yet to hit their stride.

“We have a good income and I’m so happy with how Kent provides for us, but somehow we aren’t able to save for a vacation or a furniture purchase — or even to put up baseboards that have been off for three years,” Beth says. “We put money into retirement, but every paycheck we have overdrafts and I don’t know how to change this so we can save for fun things. When I hear of families taking vacations and flying somewhere, I shake my head and wonder what I’m doing wrong.”

The bad news

A 9-month bout of unemployment a couple years ago depleted the Liechtys’ savings.

The good news

The Liechtys make more than twice the average household in Utah, and they don’t have credit card debt. Beth is studying public health promotion at BYU and will be able to make a larger financial contribution after she graduates.

Work it

Beth grew up with generous parents who paid all of her expenses. Kent grew up in a large family with a schoolteacher father, so he had a paper route from age 9 to create his own spending money.

“We’ve never really followed a budget because we’ve never desperately needed one,” Beth says. “But I feel like our money disappears before we have time to plan for home improvements and travel and extra things.”

Kent’s focus is largely on retirement.

“I think about the future — about retirement — more than I think about buying toys or going places,” Kent says. “We want to build our savings.”

Ross the financial boss 

   An unexpected job loss is a devastating financial challenge faced by many families over the past few years. Although the Liechtys have a solid income now, they spent nearly a year unemployed. Even when you put a little money away for a rainy day as they did, it never seems to last as long as you think it will. 

   The Liechtys have already learned valuable lessons. With a little spending discipline and more focus on future financial needs, the Liechtys will be in a position to weather any future financial storm.

springer_001

Tara Springer, Age 38, Occasional substitute teacher

Garold Springer, Age 43, Letter carrier with U.S. Postal Services

Hometown  American Fork 

Family 5 children (ages 6 to 16)

Household income $64,500

Debt $45,000 owed for a remodeling project and to pay back Garold’s retirement account

Goal To pull ahead financially and one day purchase a house big enough for children and future grandchildren

The lowdown

By borrowing funds from Garold’s retirement account, the Springers paid off their home last year. They live frugally and meet their basic needs without racking up credit card debt, but they would like to have more discretionary income.

The bad news

As an employee of the U.S. Postal Services for 16 years, Garold is already near the top of the pay scale.

The good news

The Springers are comfortable with sacrifice and don’t need things to make them happy. Tara enjoys being a stay-at-home mom and supplementing their family income with substitute teaching.

Work it

Garold grew up learning to work hard and to only spend money when he has it.

“I was attracted to Garold because he was a hard worker and offered a stability I had never had,” Tara says. “Our house is small, but it’s nicer than what I had lived in before. We are happy, but we want to be wise.”

The five Springer children are actively involved in sports, music and church activities.

“Paying for their fees and our household expenses means we aren’t able to keep more than a few thousand dollars in our savings at any given time,” Tara says.

To pay for two sons to attend the National Scout Jamboree, the family scrapped metal for three years so each son could earn $3,000.

The Springers aren’t looking for a lavish lifestyle, but they want to learn more about investing and then share that knowledge with their children. They’d also like to replace their two gas-guzzling suburbans with newer, more fuel-efficient cars.

Ross the financial boss 

   The Springers have done a great job of making sacrifices to meet their financial goals thus far. They are living proof that great things can be accomplished a little bit at a time when you stay focused. As their very active kids begin to enter their teenage years, there will be additional stress on their budget. The Springers will need to manage their resources to meet those needs and still provide a comfortable lifestyle.

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