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SPENDING
Budgets That Work (Honest)
(Page 2 of 4)
by Jane Bennett Clark
Get outside help
As newlyweds in 1996, Curvie and Laneshia Hawkins started out $64,000 in debt. "We had a car payment and credit-card bills, and we both had student loans," says Curvie, now director of planning for the Fort Worth Transportation Authority. Then, two days before their wedding, he suffered a bout of appendicitis and had no insurance coverage -- "I was supposed to get it through my wife's company once we were married." He and Laneshia exchanged vows at his bedside, and their wedding gift was a $10,000 medical bill.
As budget busters go, debt is a sledgehammer, and it often breaks up relationships as well. Curvie and Laneshia sought outside help from the Consumer Credit Counseling Service of Dallas, a member of the nonprofit National Foundation for Credit Counseling (www.nfcc.org; 800-388-2227).
At the urging of their credit counselor, the couple decided they could allot $1,500 a month to paying off their debts. "That was the easy part," says Curvie. "Then we had to figure out what to give up."
They tore up credit cards and clipped coupons. When their car broke down, they asked friends to recommend a small repair shop that was less expensive than the dealership. They stopped going to movies.
The Hawkinses had already loaded all their financial information onto the computer so that Laneshia could check the balances in their accounts and Curvie could pay bills online. Meanwhile, the counseling service renegotiated the terms on some of their loans and set up a system in which the Hawkinses paid more than the minimum on the loans with the smallest balances. That arrangement allowed them to see progress right away. (They could also have started by paying off the loans with the highest rates.) As each debt was retired, the extra money went toward the next loan.
Within five years, the Hawkinses had met their $64,000 obligation and amassed enough in savings (by putting aside their pay raises) to afford a down payment on a house. In 2002, their 2-year-old son, Jadin, took command of his first backyard. Says Curvie: "Seeing him run through the yard and play on the swing set--that was awesome."
Pull out your pencil
Andrea Roane prides herself on the wedding present she gave her husband, Michael Skehan, several decades ago. Before their marriage, she set up a budget-tracking system that helped her retire a stack of credit-card bills. Every time she paid off a bill, she cut up a credit card. On their wedding day, she presented her husband with a handful of plastic shards. "It was my gift for our financial future together," says Roane, a news anchor at WUSA-TV, in Washington, D.C.
Roane is still faithful to her budgeting system, which involves no special wizardry: She uses a pencil and a bookkeeping notebook to record expenses and target excesses. "I like the paper-and-pencil thing," says Roane, who always keeps a notebook handy. "It's my way of staying organized."
Roane and Skehan keep a joint checking account, as well as separate accounts to cover their personal expenses and those they've agreed to handle independently (she pays the cable bill, the mortgage and the car-insurance premium). Roane uses her notebooks to remind her when bills are due and to plan for occasional expenses. Starting in the fall, she sets aside money in gift cards for each person on her holiday gift list. "That's all done by Thanksgiving, so if I have to pay certain bills by the end of the year, my December paycheck isn't cluttered by Christmas obligations."
Roane has taken a fair share of ribbing from her family for her painstaking approach. But she is unfazed. "It's my check and my expenses," she says. "I organize me."
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