One of my clients, a striking 33-year old lady (by striking I mean she was like a ball of light and energy), who I’ll call “Ali” had recently graduated with her MBA. She found herself deep in school loans and consumer debt. She had always had good financial instincts before B-School, but while obtaining her MBA in Marketing, she went into survival mode living off her credit cards. Not a great place to be, but life happens. Ali was facing not only a lot of debt, but collection notices, debt collectors and the knowledge she was no longer a good credit risk (i.e., credit score was in shambles). And to make matters worse, Ali had not found a position to justify her recently acquired MBA. Since the pay was sufficient and the hours flexible, she chose to work with a handyman while seeking interviews in her field.
Because she was not where she thought she should be at this stage in life, Ali was full of shame and fear, and the fact that she is a perfectionist, just added to that shame. She never, in her wildest imagination, saw herself as a Handyman Apprentice, particularly after B-School.
Perfectionism rarely begets perfection, only disappointment.
When Ali came to me for her 15-minute consultation, I asked her if she had looked at her credit report to see how much she owed and what her current score was. She had not. She was afraid to examine either because she recognized they would not be perfect and if she really knew her debt amounts, she would “have a heart attack.” She was paralyzed with humiliation and could not move forward.
We decided to take on one 90-minute session together as I knew once she saw things in black and white, she would be able to get a handle on her situation and press onward, becoming a better version of her old fighting self. Ali’s homework was to take an accounting of all her debts, from smallest to largest, look up her three credit scores and secure contact information for debts in collection or about to go into collection.
Ali’s consumer debt was $65,675, school loans were $84,300 and her credit score was at 420. Two of her 10 accounts were in collection and the remaining eight were slow pays, but not in collection.
The first step, always, is to create a budget. In just the way you cannot build a house without a set of plans, you cannot navigate your way to financial peace without a budget. Once Ali created her budget, we next devised a strategy for her to contact all debtors, explain her situation and establish agreed-upon minimum payments. From that exercise, Ali generated her debt snowball schedule to confront and satisfy all her debt in a healthy and manageable manner.
Now that action steps were in place, my client could see her reality. Fear, shame, and humiliation no longer influenced her because truth had replaced those emotions. Her ability to manage life and finances returned as if she was riding a bike again.
Sometimes the beast we have conjured up in our minds, does not reflect reality. But even if it were the truth, let the obstacle show you a new way.
As a coach, I like to touch base with my clients every six months or so, until I know they are out of the woods and proceeding in the right direction. It took her two and half years, but all Ali’s consumer debt is gone. Her credit score is at 705 and she is now in her dream job handling marketing for a Boca Raton firm. She has saved in excess of 6 months’ living expenses, has begun her 15% investing and is ready to attack her student debt once payments are accepted again. Letting go of her conviction of where she “should be” freed Ali to focus on new ambitions. She is content and pursing things she did not previously consider, and best of all, my client is learning to gain enjoyment from the journey, not just the destination.
Oh, and side note, Ali has been handling all kinds of handyman projects in her home with confidence. What a perfect example of an obstacle showing you a new way to approach life.
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