Teresa’s Success Story
By Daniel Rodriguez | Dr. Budgets
Do you feel you have so much debt that you will never pay it off? Do you want to travel more without feeling guilty about going deeper into debt to do it? Teresa* had been in debt most of her life and decided she no longer wanted to live with it. Here is the story of her journey…
I am a single woman and I have a son in college who I support. I have a good job and income, but I couldn’t figure out how to stay out of debt. There were times when I would pay it off, but I would quickly get myself back into debt. About 10 years ago I heard about Dave Ramsey, and I thought “this is what I have to do to pay off debt.” So I created my budget and tried to save the $1,000 for my starter emergency fund, but something always came up financially and I could never do it.
When I was deployed, I managed to pay off all my debt and then I bought a house. That’s when my debt snowballed! Closing costs were more than expected, and then everything after that just seemed like a drop in the bucket. My thinking was “what’s another $5,000?”, so I just kept spending.
Between school loans, two car loans, credit cards and a loan against my 401k, I owed over $40,000.
One day, I decided to seek out a financial advisor to help me. He told me he couldn’t help me until I had some money saved. Since I always owed money, I couldn’t work with a financial advisor to invest money and get ahead. I told him I needed somebody to hold me accountable for my spending, so he referred me to Dr. Budgets.
Deciding to Work with Dr. Budgets
When I retired from the military, it was scary not knowing what my next job would be. On top of that, I owed money which was really scary! I wanted to get out of debt for the security. Also, I learned from Dave Ramsey that I was paying interest on the debt that I would rather have in my savings, where it could earn me money.
I contacted Daniel and he described his services – it sounded exactly like what I needed. It was nice to have been referred to Dr. Budgets.
Working with Dr. Budgets
The first meeting was great. I couldn’t wait to get started! After that meeting, he reviewed my spending and came up with my budget, and then we met to discuss the spending plan. I had my little spreadsheet budget that I had created and I thought I’d get something similar from him, but his was so much better!
When I created my own budget, I had just guessed how much I was spending in each category… “this much on groceries” and “that much on my home,” but it wasn’t based on anything. When he actually looked at my spending, he said I needed to increase my grocery budget – I had no idea! He also added categories so it was a more accurate reflection of what I was spending. I loved that the budget was on track and I wasn’t having to readjust it every month because the numbers were now reflecting reality – Daniel was tracking it and reporting back. When I had created a budget before, I set an amount I thought was correct for each category and then I’d adjust it as I overspent. I learned from Dr. Budgets that is not how budgets work!
My favorite thing was the Goal Tracker! Although, at first it was depressing because the first month the debt number just goes down a little. But as I was putting more toward my debt, it started getting exciting and I looked forward to seeing it; I’d print it out every month and put it up at work where only I could see it.
The two biggest things I got from working with Dr. Budgets were the accountability and the advice. It was a tremendous comfort having somebody review and discuss my spending with me. I was able to use him as a “scapegoat” a few times because I like to consult him before any major purchase. This ended up saving me big when a roofing salesman came to my door once and told me I needed a new roof. He was very high-pressure, but I told him that I had to talk to my budget guy. I had to say it over and over! When I talked to Daniel about it, he encouraged me to look into the firm and it turned out they were not very reputable. They were so high pressure, if I didn’t have Dr. Budgets as an excuse, I might have signed up and that would have probably been a big mistake!
It was hard sometimes to stick with my budget. My friends would tell me I deserved to buy nice things, but I told myself I deserved to be debt free.
I was able to pay off the $40,000 in less than two years! I also took a trip to Japan and it was my first “debt free” trip. In the past, I would charge the airfare and the hotel on my credit card, but this time, it was all paid for.
I recently got into a car accident and realized that before Dr. Budgets something like that would have been a crisis for me. This time, I had money to pay the deductible, so it wasn’t a big deal. Also, I believe a new car payment would have triggered a spending spree for me because my attitude before was always “what’s a few more thousand dollars?” – I know I would have bought new furniture.
And I succeeded in another way: I’m thinking about money totally differently now. As we worked together, something would come up and I would approach Daniel with the solution. Coming up with a solution to a money problem on my own was something I would have never done before – I would just spend, spend, spend. Working with Daniel has inspired me to make my own big financial decisions in a way that doesn’t put me in debt again.
What would you tell someone in a similar situation to yours about Dr. Budgets?
I would tell them that working with a money coach is probably nothing like they imagine it would be. Daniel was so helpful and he worked with me. Some people say they don’t want to be restricted by having a money coach, but I want to say “you’re already restricted!” I don’t feel deprived because I know the money will be there to buy the things I want soon.
I know people who would benefit from working with a money coach, but they say they don’t want to spend the money to get out of debt because they’d rather spend the money on buying something – I want to tell them that’s backward!
Lastly, I’d tell people that my dogs never suffered 🙂 That’s to say, Daniel didn’t come in and say I had to stop doggy day care or spoiling my dogs. He made it work by helping me identify my priorities, which simply meant I spent a little less in other categories. I paid off my debt and built up my savings – and my dogs got to keep up their lifestyle!
Watching someone pay off over $40,000 in debt in less than two years is inspirational to me, and I hope it is to you too…especially if you are in debt and feel you will never get out of it. Thank you for sharing your success story with our readers, Teresa! If Teresa has inspired you to get out of debt and you need some guidance, please contact us or schedule your complimentary consultation.
*For client confidentiality, we changed the name of the person to “Teresa.” Everything else is factual.