There was a moment of silence when I told Carlesa Washington, a 24-year-old recent college graduate, to drop the Internet service she gets on her cellphone.
Her bill is about $75 a month. She pays an extra $20 for the Internet.
“You don’t need e-mail on your cell phone if you’re in debt,” I said. “What do you want more, a home or to e-mail your friends?” “A home,” she replied.
Washington is putting up with my demands because she has volunteered to take part in the Color of Money Challenge. This is the second in a series of columns in which I’ve promised for the next year to help four people – two single women and one couple – achieve their financial New Year’s resolutions.
Carl Chandler wasn’t happy when I told him he couldn’t buy the PlayStation 3 he covets. It costs about $600.
Chandler works hard and no doubt deserves the electronic toy. But he and his wife, Tania, are on a mission to save money and get rid of their credit-card debt.
“Until every penny of that debt is paid off, you can’t afford the PlayStation,” I said.
He stayed silent for more than a moment.
“You’re right,” he said.
Telling grown folks they can’t have something when they work hard every day isn’t easy. But these participants didn’t want easy anymore.
Easy credit and easily giving in to desires have caused financial strain and stress. To recap, here are the participants: The Chandlers, who live in Maryland, have resolved to create an emergency fund and pay down more than $14,000 in credit-card debt.
Annie Schleicher, a single professional living in the District of Columbia, wants to pay off $4,500 in credit- card debt, build a cushion of at least three months’ living expenses and make extra payments on student loans.
Washington, who lives in the District with her mother, wants to pay off all her debts and save for a home.
Just a few weeks into 2007 and they’re already changing their behaviors, although it’s been hard.
I sent them a budget template I found for free on the Internet. To use this worksheet yourself, go to www.financialplan.about.com. Click on “Budget Successfully,” then select “Budget Worksheet.”
By really looking at her budget, Schleicher realized she was paying $80 a month for a gym membership she rarely used.
All the participants have taken steps to automatically save something from each paycheck. Everyone has also been keeping a spending journal. They write down on a daily basis the amount of every purchase.
The one thing they all say is now they feel in control.
Contact Michelle Singletary at singletarym@washpost.com or c/o The Washington Post, 1150 15th St. NW, Washington, DC 20071.
