We invited our readers in January to take an active role by writing to us and explaining in a few sentences why they needed a personalized money makeover with a MoneySense Approved Financial Advisor. We got close to 400 letters and, in the end, chose two couples and a single person with financial concerns that anyone can relate to. Click here to learn more.
Shannon and Marcin’s financial dilemma
Shannon Jarrett and her partner Marcin Duran share a home and domestic life in Hamilton, but as of last March, they were by and large living separate financial lives. They didn’t share bank accounts but they did share expenses. Marcin paid the mortgage and made all insurance and car payments while Shannon paid for everything else to run the household. But regarding budgeting and finances, Shannon and Marcin were often at loggerheads. They wanted—and needed—some common ground to get their goals aligned.
For Shannon, saving was the largest concern. She always put away $200 a month but couldn’t get Marcin to do the same. At the time, Marcin believed debt repayment should be their main priority—in particular their $169,000 mortgage and $26,000 line of credit. Minor squabbles over money typically involved spending. Shannon preferred to budget and live frugally while Marcin wanted to spend more liberally. Shannon was feeling the pressure, especially because any savings had to come from cutting expenses.
The couple wanted to track their money, come up with shared goals and put an end to bad habits. Through money dates, prioritizing goals and learning how to communicate more effectively, they did just that. With the help of certified financial planner Rona Birenbaum, here’s what Shannon and Marcin learned:
There’s no magic bullet. “It was helpful to understand that with kids under five and me working part-time, we simply don’t have any money to spare,” says Shannon. “From Day One I knew there was no ‘hidden’ money, no magic answer that was going to find a bunch of options for us. We are working middle-class people and we struggle just to get by. We don’t and won’t have an inheritance showing up out of the blue. But I realize now that we really are doing the best we can, and honestly, we’re doing pretty good.”
Renegotiate the debt. In a year, the couple plans to take Birenbaum’s advice to consolidate their line of credit with their mortgage by asking for a ‘blend and extend’ mortgage option. “It was the most valuable piece of advice we received,” says Marcin. This option will allow them to re-do their budget with the aim of taking the debt strain off their shoulders temporarily while they maintain their home and raise their kids.
Make it automatic. Having Marcin set up automatic monthly payments of $800 towards his line of credit is key to whittling down debt. The money is coming from a bit of extra overtime that Marcin is putting in each week. “Next year, when we blend and extend our debt, Marcin’s monthly contribution will go into savings,” says Shannon. This strategy has helped Marcin live within his means and will in future help finance home upgrades and a family vacation.
Get outside help. The couple says their experience with Birenbaum was priceless. “We felt hopeless and stuck and she provided us with information we needed,” says Shannon. “Going to a money management expert really helped us and we recommend it for everyone.”
Debt can be inevitable. Debt for a young family can be inescapable but it’s not so bad if it’s a necessity. “Our debt is not for lavish clothes, luxury cars or other senseless spending,” says Shannon. “Progress takes time and sacrifice, but we always knew that as long as we had love, family and happiness, we are rich—regardless of our bank account balance.”
Everyone struggles at some point with paying off debt and learning to save for the future. Lindsay Tithcotte, a 30-year-old engineering consultant from Kamloops, B.C., was no different. Did she achieve her goal of financial balance over the course of 2016? Let’s see how she did.
When we first met Sammu and Mandy Dhaliwall earlier this year, the Brampton, Ont. couple was in the middle of finding out just how financially disruptive a growing family could be to a sound financial plan. Did they get on track to paying off their mortgage and saving for the future throughout 2016? Find out here.
Shannon Jarrett and her partner Marcin Duran share a home and domestic life in Hamilton, but as of last March, they were by and large living separate financial lives. They didn’t share bank accounts but they did share expenses. Did they get on the same financial foot in 2016? Let’s find out.
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