Have you ever had a time when you had to assist someone to get on the right track and found it to be an effortless thing to do? The story of Kathleen and Sean is really one of those times.
This is a financial journey that was well planned and executed to the highest level. It is a story that will make you understand the importance of knowing what you want, when you want it, and how to plan to attain your financial goals. Kathleen and Sean did have one bump on their journey but because they had a road map of where they wanted to end up, they did take a detour but quickly got back on track. It is my pleasure to tell you about Kathleen and Sean.
I started the financial journey with Kathleen and Sean in the late summer of 2007. Kathleen called and asked me whether I would be free to work with herself and her finance Sean on setting up some financial goals – some of which would be life changing.
On the very first meeting I asked Kathleen and Sean to tell me what they were looking for on this part of their journey and how they thought I could help them. Before the sentence was out of my mouth Kathleen took over and told me exactly what they wanted and when they wanted to accomplish these goals. I actually had to slow her down in order to write it all out. Now, here was a young woman and young man who were clearly ready and had made some plans.
From the way they both spoke I realized that they had given this quite a bit of thought and were ready to embark on their financial journey with both their heads in the same place. That type of preparation makes the job of a Financial Advisor very easy.
Their financial goals were SMART:
Specific………. They wanted to get married and own their own home.
Measurable….They had specific milestones to achieve along the way.
Attainable……They knew at this time of their life they were attainable
Realistic……. They were real and practical goals.
Timely……….Both goals had to be accomplished in 2010.
With such clear directions I found it very easy to set the plan in action.
Kathleen and Sean had a small amount of debt, about $3,000, between them. We looked at their incomes and their expenses which included things that were very common to a young couple both living with their parents.
They both had cell phones, eating out, spending whenever necessary for their WANTS, so we needed to work on the very concrete NEEDS that they had in mind, which was buying their own home and paying for their wedding in cash which would make them debt free.
We set up some very specific saving accounts like an RRSP, a House saving account, a Wedding account and a Vacation account. The deposits into these accounts were made automatically from their chequing accounts. They kept their credit cards but they had to pay off in full what ever they charged each month.
There were a couple of occasions when the discussions became very heated such as when Sean thought it would be a great idea to get a flat screen TV. With my help, we were able to convince him it was not in the immediate plan but if he could come up with extra overtime and reallocate some of his entertainment money, he was free to do as he pleased.
Then we had the bra incident, Sean brought up at one of our meetings that Kathleen spent $26.00 on a bra but he could not get his TV. Again we had to show him that there were a few more “0”s in the price of a TV, than the price of the bra. These small discussions took place a few times but it never distracted them from attaining their financial goals.
There was one incident when the Debt Monster sent in his brother, Spend Monster, for a visit with Kathleen and Sean, but they soon realized that is was a family member of the Debt Monster who came in to open the door for him to let him walk in again. That was nipped in the bud and the sister, Regret Monster, dropped in to push them just a bit off their financial plan. But, because they had such solid goals, they were able to kick all the members of the Debt Monster family off the track and Kathleen and Sean carried on their journey.
Financial planning has really paid off for Kathleen and Sean. They took possession of their new house on March 31, 2010 and even their wedding in the fall is all paid for.
The story of Kathleen and Sean is a great study in making sure you know what you want and when you want it. Far too often I meet with people who spend the first hour telling me what they don’t want. My job is to help you get what you want so when meeting with me you must be prepared by knowing what you want to achieve.
Study the definitions of SMART goals again and use it in setting your own financial goals. Make this yor first step in preparing your own financial journey.
Tessa- Marie Shillingford is the author of Controlling the Debt Monster. She is Personal Financial Planner, with a designation from the Institute of Canadian Bankers, and a Financial Counselor certified by the institute of Canadian Banker. Tessa- Marie was employed by TD Canada Trust for twenty years in the retail section of the bank. During her tenure at TD Canada Trust she held various positions interacting with customers of the bank. As a Financial Advisor and Manager of Financial Services she led a group of Financial Advisors in helping customers of TD Canada Trust successfully manage their finances. Details of her book… Controlling the Debt Monster, can be found at http://www.controldebtmonster.com