The Story of Andrea and Daniel

No matter where you are in your life, you can always benefit from financial planning and setting goals. The following is a real example of a couple who were addicted to shopping. They found themselves in a deep financial hole and struggled to see daylight.

I met Andrea and her husband in 2000.  They were a family of four including two children.  She wanted to know how to go about selling some company stocks to put towards making a car payment.  I advised her against selling the stocks but proposed instead that she ask her bank for an overdraft on her account.   She took my advice and kept her stocks.  For the next two years I met with them at RRSP season and encouraged them to make contributions to their RRSP accounts.

In 2002 I got a call that they were in some financial difficulty and would like to talk to me.  I told them to bring a note book, all their bills and their bank balances. That day that we met, the appointment was for one hour and it lasted three.  They were in serious financial difficulty.  Their rent had not been paid for the past two months and they were facing eviction. They had no money in their chequing account and, except for their RRSP which they had already started dipping into. They did not have any other funds.

Their combined income was $95,000.00. Their credit cards and other debts totalled $18,000.00.  You would think that with such an income they would be able to meet all their expenses.  But they were impulse shoppers, and, lacking a family budget, they both used their debit cards to purchase what ever they wanted.  Their needs were left to what was left over.  They ordered take-out dinners as well as eating out several times a week.   The children were involved in very expensive sports; they also had two cars, monthly car payments and all the expenses that came with owning two cars.

From 2002 to 2006, we met every week.  They had to bring their rent up-to-date, get a loan to pay off their revolving debt and they were encouraged to keep a list of all their expenses.  Keeping track of their money on a daily basis was one of the most difficult things they had to do.  When they spoke of wanting to make an unnecessary purchase and I told them that if they spent the money in their chequing account, the rent cheque would be returned, their reply to me with such panic in their voices would be “But we just have to.  Our son is such a great basket ball player and he must have those shoes.”  This young son was 8 years old.  The carrot I held out to them was “With the income you make, you will be able to purchase your own home if you stay on the plan we created.”  Daniel was on board but Andrea could not stop shopping.  Finally the only way we could control her was not to allow her access to the chequing account but to let her have her own account for groceries and personal spending. Under my guidance, Daniel managed the family accounts, paid the bills and made all decisions on savings.

He opened Registered Education Saving Plan for the Children, reinstated their Registered Retirement saving plan, and opened a house saving account and another one with a reasonable amount for the children’s activities.  Within 18 months, the two year loan was paid off and an additional $949.00 was being saved monthly.  By the spring of 2006, the $423.00 Company stock was worth $13,425.  $10,000 went towards the down payment for the house and the balance continued to grow in the RRSP.  That will be part of her retirement income.

With constant direction and encouragement, their savings increased and in 2005 they made 15% down-payment on a new home.  Their savings continue and now the plan was within reach I saw a complete 180 degree turn as their entire attitude became focused and disciplined.  The children became part of the planning now that they each had their own bedroom; meals were prepared at home and discussions were held every evening at the dinner table.  Four years after I started working with them, they moved into a brand new home and I am happy to say that they are enjoying their home.  I meet with them once a year to plan new goals and modify old ones.

I never thought they would understand what I was trying to teach them…the magic of financial planning and goal setting. But they surprised themselves and they even surprised me. They still live in their house and are on plan.

Yes, you can succeed if you stay focus and set  attainable financial goals.

3 thoughts on “The Story of Andrea and Daniel

  1. I’ve never met someone with so much financial planning knowledge and expertise, who at the same time cares deeply about the lives of everyday people. When speaking with Tessa-Marie, you get the sense that she really cares about your well-being, and truly wants what’s best for you. She cares enough to use “tough love” to make sure you are not wasting time, money, or being any less than your absolute best in this world. Thank you, Tessa-Marie, you are a blessing to work with!

    1. Sidrah;
      Thanks for those lovely words. I would like to know how the coffee spending is coming, I have noticed you are drinking more water and less coffee that is a sign of savings lets talk on Friday.

  2. Tessa

    Your suggestion on focus and discipline is always valued – it has stood me in great stead.

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