Sitting in a Starbucks north of Seattle, a Lynnwood couple was prepared to talk about the nitty-gritty of their finances. But Tammy and Charlotte Jane wanted to talk about something else first: the day Tammy proposed.

“She got on one knee and looked up with the ring,” Charlotte says.

“I was so nervous I didn’t say anything,” Tammy says. “Finally I said, ‘You are supposed to say “yes” and she said, ‘You are supposed to ask me a question!’ ”

The couple laughs and hugs.

Tammy, 44, and Charlotte, 52, married in 2015, and they act as if they are on their honeymoon. Watching them banter and hold hands, they could be the poster couple for finding love in middle age.

Both Tammy and Charlotte have been married before and they each have grown children. Which is to say, their lives have been complicated and personal finance hasn’t been top of their minds.

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But lately, their debts have grown into something that can’t be ignored. Some of what they owe is related to their wedding, as they put part of the expense of the gown, suit and ceremony on a Visa credit card with a balance of $7,183 and an interest rate of 25%.

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They have four other credit cards — altogether the Janes have $16,642 in credit-card balances. That’s higher than the average household’s credit-card balance, which is $6,194, according to Experian.

How did they get here? Tammy says she had paid off her debts — then slid back into trouble when she bought a 2009 VW Beetle. She took out a $5,000 loan to buy the car, then shelled out $6,000 in repairs.

Tammy is a medical assistant in a dermatology clinic. “You know when you have a funny spot on the skin? I’m the biopsy assistant, the one who wields the needle.”

Tammy makes $53,500 annually. Charlotte is disabled and collects $8,640 a year in Social Security Disability benefits.

“I’m on disability because of failed back surgeries,” Charlotte says. “I’ve had three back surgeries. The first to fuse discs in the lower spine, the second to fix that surgery — but I turned out to be allergic to the screws, and the third one was to fix what we can.”

Charlotte is in chronic pain; she can’t stand for long or lift anything heavy. When she’s feeling up to it, she does tax preparation during tax season, and some pet sitting, and brings in an additional $5,000 to $7,000 a year.

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So Tammy is the main breadwinner but she is training for a new profession: to become a pastor. Amid this backdrop of debt and transition, Tammy was feeling overwhelmed. “I thought I’ll just wallow out here in debt-land.”

Then she saw The Seattle Times Money Makeover online and the couple applied to have a certified financial planner volunteer to help figure things out.

The overall impression of Sean Cooper, president of Fit Financial Consulting in Wenatchee, was straightforward: “Your debt and fixed expenses are driving your budget into the ground.”

The first thing he had Tammy and Charlotte do is take a hard look at their expenses. Shortly after starting to work with Cooper, they moved to a less expensive apartment where the rent is $1,430 a month. They pay $803 a month for health insurance through Tammy’s employer, their car payment is $370 a month, the required minimum payment on all those credit cards is $541 a month, and Tammy pays $125 a month on an old student loan and $2,500 a year in a 5-year pastor training program.

Even with the lower rent it wasn’t looking good. Then something unexpected happened. Charlotte got into a car crash. She wasn’t hurt but the car was totaled.

“Surprisingly, the car crash helped their bottom line,” Cooper says. “The accident wasn’t Charlotte’s fault and they got $7,000 from the insurance company plus the auto loan went away.”

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Tammy bought a cheap car from her son — and even though she “can’t stand” the car, she’s breathing easier. “Not having a $370 car payment is a relief off my shoulders.”

But Cooper doesn’t want the Janes to get too relaxed. The budget needs more trimming. He suggests shopping for better deals on cable TV, internet and phone service, and eliminating some of the couple’s excessive insurance coverage.

Once there is a little wiggle room in the budget, Cooper wants Tammy and Charlotte to tackle credit-card debt. “Some of their credit cards have terrible interest rates,” the financial planner says. “They should pay down the one with the worst interest rate first.”

That’s the Bank of America credit card with a rate of 25%. It may sound counterintuitive, but Cooper says one way to tackle the 25% card is to get another credit card.

He suggests that Tammy and Charlotte move the balance over to a card with a 0% intro balance transfer. That way some of the $540 they spend each month on credit cards will reduce what they owe — instead of just servicing the interest. But they need to pay down that debt quickly — zero interest typically lasts only for a year or so.

“Another option is for Tammy and Charlotte to go to a bank and get a personal loan which would have around a 4% interest rate,” Cooper says. “By taking out a personal loan they may be able to pay off all of their credit cards and consolidate them into one payment with a bank or other lender.”

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The next pressing need, according to Cooper, is retirement. Charlotte has no money saved for retirement. Tammy has $17,487 in a 401(k) through her employer, and it is in the Fidelity Freedom 2040 Fund.

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“The 2040 fund is more aggressive than their risk tolerance,” Cooper says. “It has 93% equities.” Instead, Cooper constructed a portfolio using funds in Tammy’s plan to create a more diversified mix of stocks and bonds, which also will reduce the annual expenses of the holdings to 0.23%.

“I didn’t feel savvy enough to make any changes to my 401(k),” Tammy says. “But I agree with Sean’s suggestions. I can wrap my brain around this, it’s easy to fix and understand.”

Tammy and Charlotte were on pins and needles wondering what the financial planner would say about Tammy’s desire to become a pastor. The position would pay less than what she’s making now, about $35,000 a year.

But it also includes a perk that surprised Cooper when he crunched the numbers.

“Interestingly, Tammy’s transition to a pastor position should improve their financial situation somewhat,” Cooper says. “It comes with free housing, and by eliminating their rent payment the couple will save more than $17,000 per year, more than offsetting the reduction in income after accounting for taxes.”

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Tammy says the thing about working with a planner that helped the most is that Cooper gave them a step-by-step “to do” list. They know it won’t be easy, but Charlotte and Tammy have a road map out of debt and into a better financial future.

“Before the Money Makeover I was lost in the middle of nowhere,” Tammy says.

“This gives us options,” Charlotte says, giving her wife a kiss.


Some benefits are not worth paying for

Are you paying too much for benefits at work?

Through her work, Tammy Jane says she signed up for every benefit that was offered. But their Money Makeover planner believes she and her wife can’t afford all that coverage. For example, in addition to the accidental death and dismemberment insurance that’s paid for by her employer, Tammy pays for a second AD&D policy.

Sean Cooper, Fit Financial Consulting  (Fit Financial Consulting )
Sean Cooper, Fit Financial Consulting (Fit Financial Consulting )

“It generally does not make sense to carry more insurance than what you need,” says financial planner Sean Cooper. “Like the additional AD&D policy. It’s unlikely that Tammy would collect for having an accident on a public carrier, like a commercial airliner. It’s not worth $117 a year.”

Tammy pays $20 a month for a legal benefit that provides assistance with things like estate planning and money counseling but she hasn’t used it. Cooper suggests Tammy and Charlotte tap it to get wills updated and to help with debt consolidation — then drop the coverage. He also wants them to consider switching from the most expensive dental coverage to a plain vanilla plan.

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When cash flow improves, Cooper urges the Janes to purchase more life insurance for Charlotte, who would be in financial difficulty if Tammy should pass.

If you’re wondering how your benefits at work compare to other companies, one resource is the Society of Human Resource Management’s annual survey of what its members offer in areas like health insurance and leave policies.

When it comes to benefits, Cooper warns to not set it and forget it. “You should review your policies any time you have a major life event; get married or divorced; have a birth or death in the family,” he says.

Even if nothing has changed, Cooper recommends reviewing your policies annually.