Today’s success story is a bit unique from the others that are posted on this blog. Pam (from Wichita, Kansas) recently took the opportunity to participate in the Money for Life Coaching program, so our interview with her was largely based on our wanting to know specifics about her experience. In a telephone interview, Pam answered the following questions:
Q: How many coaching Sessions did you complete?
A: 10 sessions.
Q: What coaching session(s) did you find most valuable?
A: Session 3 automated.
Q: How has the coaching program helped you take control of your money?
A: Well, although I had previously used a very detailed spreadsheet to track my finances, and I thought I knew where my money was going, I wasn’t including all of my intermittent expenses, and that was getting me off track and causing debt problems. Also, I have four members in my family–one of whom is a college student who is dipping into the family funds from afar, without always consulting me first! So, I was slowly but surely losing control of my transactions. It’s not that my daughter was spending all that much, it was just that I didn’t always have the opportunity to plan for it. So Mvelopes has helped tremendously in that I can now plan for those expenses. I can project 12 months ahead, make adjustments as I go, and it’s tremendously helpful. I will have two college students in a couple of years, so it will even be more important then.
My coach, Lori, was very knowledgeable. I had trouble getting my head around several concepts and Lori just kept bringing those things back to the table until I finally said, “Ah-ha! Okay. I get it now.” Lori was really invaluable. I had used Mvelopes for awhile in the past, but really did not use it to its fullest potential, so eventually gave it up. I decided that if I’m going to try this again, I’m going to do it right and get the coaching and get those concepts mastered so that I really do have control. I’m planning to use it to teach my children how to take care of their money. My daughter doesn’t want to have debt when she graduates from college, or incur debt after she enters the workforce, so this will be a great tool for her so she can keep herself on a plan.
Q: How has the coaching program helped you reduce consumer debt?
A: Well, a couple of things have really helped with that. My problem with debt was when we would have a major bill come due, like a semi-annual bill, or a big repair bill, and I would know it was coming, but I really wouldn’t have planned for it. If I had money, I would pay it, but if I didn’t, it usually went on a credit card and eventually that caught up with me. Lori worked with me to get me to incorporate those expenses into my planning. Now I don’t even look at my checking account register anymore–it doesn’t even mean anything to me–I just look at my Mvelopes and I know how much I have available in clothing, or insurance, or whatever it is that I know I need money for.
Also, the new sweep feature has just been huge for us. We have come up with a lot of unused money each month using the sweep feature. I love it. It has helped us pay off debt, as well as save.
One more thing is that my son and daughter are both athletes and they travel, which can be expensive. Now, knowing their schedules and knowing how many nights they’ll need to stay in hotels, etc., we can look ahead and plan for those expenses. In the past, we would always use a credit card to pay for the hotel and travel expenses because that was the easiest way to pay for it, whereas now we use our debit card because we know the money is already there. Previously, even if I had the money in the bank, I was afraid to spend it because I didn’t know what else was coming up, what surprises might be coming in the future, so I’d still just put the hotel expenses on the credit card. Now, I feel so much more in control of knowing what’s coming up in the future. I have so much more knowledge and information now. I don’t use credit cards for those types of expenses anymore–I don’t need to. And I honestly don’t feel deprived or feel like I’ve had to adjust my lifestyle. When something comes up that I don’t know about or didn’t plan for, there are always several ways to handle it within the envelopes system. You can either take it out of savings, or you can take a little bit out of this envelope, and a little out of this one, to the point where you don’t even feel it. It’s all about being in control of your choices. You get to make choices because it’s right in front of you to clearly see your options.
As far as reducing debt–for us, it’s more about not creating any new debt and knowing that we are going to get on top of what we do have. We are no longer creating debt for silly little things that add up over time.
Last year I started a new job and I was not initially planning to contribute to my 401(k), but I have been able to start contributing–I started with a 5% savings–and have not felt the impact!
Q: How has the coaching program helped you reduce your stress related to money?
A: Without the coaching, I don’t think I would be as successful. I think the key to using this successfully is the coaching. Lori taught me things that have nothing to do with the software, as far as the money-management piece of it goes. My coach helped get me started–she gave me a jumpstart. We had coaching sessions on Saturday mornings, so for two months or so, Mike and I sat down together and went through the coaching sessions with Lori. Then when the session ended, we’d continue our discussions about money. So, every week, for the last eight weeks, we have both known where we are with our financial situation and we’re both on the same page. It has really helped. In the past, we didn’t have problems talking about our finances, but our discussions were missing the key intermittent expenses and the things the kids were doing, which was really the cause of our debt. It has also saved me a lot of time. I get online every morning and it only takes 2-3 minutes to update everything, and then we both know exactly where we’re at.
Q: How much has your budgeting and money management knowledge increased since you started the coaching program?
A: Actually, it was more about mastering the control of the money flow and the oversight of an entire calendar year plan, but still having flexibility. Long-term planning has been a big help! In the past, I would only look at a month at a time, or a paycheck at a time, and now I really look at 12 months in my spending plan. When you have unexpected expenses, if it’s not in your current pay cycle or in your current month-say it’s next month and you know something is coming up that’s going to be costly, you have the option of saving a little bit this month and a little bit next month, or you can just take care of it next month. But when you look at the 12-month view, you can take a little bit out of six different envelopes, if you want to, and you barely feel it. One of the keys is adjusting to unforeseen events and the tool allows you to see how you can flexibly move money between envelopes to deal with any situation.
Q: How much has the knowledge of the envelope method helped you manage your money?
A: I knew about the envelope concept, so this was not new to me. But I hadn’t mastered the way the software works with using credit cards–and it’s ingenious, but I just hadn’t understood it, until coaching. I also struggled with understanding off-line accounts and loans and our coach helped us set up a loan envelope, and made it work similar to the credit card envelopes, so that was really helpful.
Q: How have your attitudes about budgeting and money management changed since you started the coaching program?
A: My attitude about budgeting hasn’t really changed. I’ve always known you have to keep track of what you’re spending. But my attitude about the money-management piece has really changed. I used to look at it negatively because I was working really hard on it and I was very detailed with it, but I was still having some issues. I couldn’t figure out why, because I thought I was keeping pretty good track of “everything.” Getting 30 days funded was also a big help in mastering the timing issues! I monitor my credit card balances online and the minute my payment is due, I pay not only the minimum or whatever I’ve decided to pay down, but also whatever I’ve accrued this month, and I don’t even wait for my statement to arrive. That’s the key to getting rid of any debt you have. I can definitely see light at the end of the tunnel, and the tunnel’s getting shorter.
Q: Has coaching helped you gain a clear overall picture of your spending?
A: Yes, in a very significant way.
Q: How has your Mvelopes usage changed since starting the coaching program?
A: Probably just that my spouse has become more involved and assists me with the management of our money. He is the non-spender in the family, and I previously managed more of the day-to-day financial transactions. Now my husband wants to know where we stand and is more involved and asks questions more frequently. For example, he’ll want to know what the sweep is going to look like this month! So, he’s definitely more involved.
Q: What advice would you give to new Money for Life Coaching participants?
A You need to at least sign up for the Essential package to get set up properly and really learn how to effectively execute your money management plan and personalize it for your situation. That’s really the key! Get it set up properly, get any unique situations handled, so you can get off to a good start and you will be more successful. I have found way more money in the last three months than what I spent on the coaching. I’ve got it right this time and I’m creating success. I will be using it for the rest of my life. I’m sure of it.
After Pam had finished answering the questions about her Money for Life Coaching experience, we asked her a few more about her use of the Mvelopes product, and here’s what she had to say:
Q: How long have you been using Mvelopes?
A: This time, probably about three months. The previous time, I used it for about six months (but I never mastered the credit card concept).
Q: What financial goals have you achieved while using Mvelopes?
A: We are going out of town on for the week of spring break and the trip is already paid for-the hotel is paid for, the food is paid for, the gas is paid for–it’s allocated, the money is in the envelopes, it’s all funded! We’re not going to be coming back with debt. It’s my daughter’s birthday and her gift is already paid for. It’s great! We can go and have a guilt-free good time!
Q: What are your next financial goals?
A: My son is a junior in high school. When my daughter graduated from high school, the summer after she graduated, we took a big vacation before she went away to college. We plan to do the same thing for my son, so I can already set up the envelope now for the vacation we will take when my son graduates. Our dog has an envelope, too, and his kennel expense for our spring break trip is already paid for!
Also, we may replace a car in a few years.
Q: If married, how has Mvelopes helped you better collaborate with your spouse?
A: It’s never been a problem to talk about money, because we used a spreadsheet, and we would both always look at that periodically to see where we were. But now that we have an actual debt-reduction and spending plan, and we can see that it’s working well and we are making more progress, we are more excited about our financial future.
Pam, thank you for sharing both your Mvelopes and coaching experiences with us. It is obvious that participating in the coaching program really made a difference for you, as it has so many others. We wish you and your family continued financial success and much happiness.