Meet Katie, the grand-prize winner of the 2014 Summit Credit Union Project Money competition!
Katie’s goal at the start of Project Money was to get her finances under control. More specifically, she wanted to figure out a plan to pay her student loans off sooner rather than later.
“Before I began Project Money, I was told I had 16 years of loan payments left,” she explains. “My debt intimidated me and it was hard to set financial goals because my debt seemed overwhelming.”
Together with her coach, Adam Grady, Katie developed a plan and has increased her savings by $5,068 and decreased her debt by $10,324 -- cutting down her loan payments by 11 years.
“I always felt like I had to choose between savings and reducing debt,” she explains. “With Project Money, Adam showed me how I could accomplish both types of financial goals.”
Katie also says she has significantly changed her spending and savings habits. “I haven't reached for a credit card in eight months and don't plan to anytime soon. I can now see the light at the end of the (debt) tunnel. Good-bye credit cards and student loans!”
Summing up her experience and how it’s changed her life, Katie says, “Project Money helped me take control of my debt instead of letting it control me. I am well on my way to being debt free and intend to stay that way.”
Q&A with Katie:
What are the key things you learned from your experience in Project Money?
I learned the importance of establishing an emergency savings account, setting and sticking to a budget and the efficiency of taking baby steps toward achieving your goals.
What’s the best advice you’d give to someone who’s in a similar financial situation to where you were seven months ago?
You absolutely have the ability to set and achieve your financial goals. Identify achievable short-term and long-term goals, and then take baby steps toward them. It's amazing how quickly setting aside small amounts of money or paying off a little bit of extra debt each month can add up!
What were the key factors in your success?
It sounds so simple, but I think the biggest factor in my success was Adam encouraging me to set up multiple savings accounts and establish an emergency savings. It's been so helpful to estimate my annual spending in certain areas like car and pet expenses so that I can set aside a specific amount each month in anticipation of future needs. In fact, I've set up five different savings accounts and two checking accounts (one for bills and one for monthly expenses). It's amazing to see how quickly your savings can grow when you set aside a little bit each month and are careful about how you spend this money.
What was your “aha” moment?
My "aha" moment came when I needed an unexpected car repair. I didn't flinch when my mechanic told me the cost because I knew I had money set aside in a car expenses savings account for just this type of purpose. The feeling was so freeing, knowing that I didn't have to pull out a credit card and add to my debt.
I have set up a plan to pay off my last credit card debt (which is at 0% interest) by June. Then I should be able to increase my student loan payment to $700 a month, which would allow me to pay off my student loan by 2019.