Financial Fix-Up participants staying the course

FARGO – About six months ago, three local families started The Forum’s Financial Fix-Up, a very public process to tune up or overhaul their personal money situations.

The series of stories, which debuted in January, shared each couple’s financial challenges and goals, as well as the paths laid out for them after meeting with financial counselors from the Village Family Service Center in mid-December.

Now it’s time to check in on them.

Since receiving their customized financial action plans and sharing their experiences, the participants have largely stayed the course by cutting spending, paying off debt and saving for the future.

The Graveses
John and Annette Graves say they still have their monthly financial struggles but are living life with a balanced budget.

“We have been able to get caught up and work on some debt,” Annette said. “There’s always those days you look and say, ‘Is there enough money in there to get us to the next check?’ ”

The Moorhead couple were stuck in a cycle of catching up in the summer and falling behind in the winter because of John’s sporadic self-employment income.

Shortly after meeting with The Village, John was hired for a full-time maintenance position at the Courtyard by Marriott in Moorhead. It’s made a huge difference, they said.

“We have been able to divide up the bills according to the paydays,” Annette said. She has set up automatic bill pay through her bank. They continue to track their expenses on a spreadsheet, and cut back.

They also received a hardship grant from the Otto Bremer Foundation, administered by The Village, which paid a month of their mortgage and put $70 toward their electric bill, Annette said.

Unfortunately, Annette said she has not received any child support for her three children since February. “That has been a struggle with trying to give the kids the things they need, but yet being able to say ‘no’ to them.”

The Dockters
Steve and Meghan Dockter of West Fargo say they have paid off about $18,000 of their $40,000-plus credit card debt (racked up during a medical crisis) since starting the Fix-Up.

“For the most part, it’s just Meghan and I communicating more, being on the same page,” Steve said.

With Meghan, a nurse, going to school and working, and Steve teaching and coaching, their expenses dropped more than they fathomed, he said. The couple earn about $5,300 a month.

“When you don’t have the time to do anything, you don’t have time to spend the money,” he said.

They’ve retired two of four credit cards by paying off the smallest balances first. The final two cards have similar balances, so they’re now focusing on the higher-interest card.

The couple also went through a Financial Peace University course. This convinced them to compile a detailed budget, something Steve, a math teacher, hopes to do now that school is out.

The course also steered them away from using a credit card, something Steve wasn’t ready to give up when they met with The Village counselor. He wanted the safety net and convenience.

“I didn’t want to work at it. I’m starting to see the more you work at it, the more benefits you get from it, too,” he said.

He set an aggressive goal of paying off their credit card debt within a year. If they can do that, they will be able to make it financially through Meghan’s second year of graduate school, when clinical training will prevent her from working for pay, he said.

Another motivator: Steve will be teaching a consumer math class.

“I want to make sure I can set a good example for the kids,” he said.

The Richmans
Nathan and Brenda Richman quickly crossed their first Fix-Up goal off the to-do list: pay off the car loan. That was done the beginning of February.

With that loan retired, the Moorhead couple are now focused on the second goal of building up an emergency fund. Brenda said they’ve put about $3,500 into that savings. She figures it will take about 18 months more to get the balance where they want it.

After that, they’ll plow the surplus money into their retirement funds.

The Richmans started focusing on their finances last summer. A career change by Nathan more than four years ago depleted their savings. They felt they’d strayed from their financial values.

They were already on the right track in many ways before starting the Fix-Up, but a meeting with retirement professionals at State Bank and Trust in Fargo helped firm up their path.

They are in the process of consolidating all of Nathan’s various retirement accounts under one house. “We’re in the paperwork stages of that,” Brenda said.

Meanwhile, their daughter Tori graduated from high school. As she prepares for college, Brenda says she’s making decisions to avoid graduating with too heavy a debt load.

 Readers can reach Forum reporter Sherri Richards at (701) 241-5556

Some Final Words

The Village Family Service Center

The Village Financial Counselors who worked with each of the Forum Financial Fix-up families had a few final words they wanted to share.

Joshua Huffman, financial counselor for Annette and John Graves
Annette and John fully invested themselves in this process. After fully tracking their expenses for 30 days, we reviewed their budget using the newly tracked figures. It was an eye-opening experience for them to identify their actual monthly expenses. They are fully committed to making changes wherever necessary and have made great progress already. I think this experience was a valuable one, and I am confident they will continue to improve their situation. Congratulations John and Annette!

Tracy McFarlane, financial counselor for Steve and Meghan Dockter
I want to thank all three of our featured families for their willingness to share the details of their personal finances with our readers. Through this process you have encouraged others to reflect on their personal situations; and through your blog posts you have introduced some of the invaluable basic budgeting skills and tools that promote positive change.

The Dockter’s were not able to meet with me after their initial appointment because of their hectic schedules, but I look forward to meeting with them in the future. I wish them success in their journey and encourage them to continue to schedule time each week to sit down with each other to discuss their finances.

Morgan Almer, financial counselor for Nathan and Brenda Richman
I believe the Richman’s will be very successful in their financial future going forward. The goals they set were what I consider SMART goals. Goals that are Specific, Measurable, Attainable, Realistic, and Timely. To some degree, the financial counseling sessions did more to affirm the financial decisions and lifestyle changes they had already made, than to offer new ideas. If they follow the advice provided by the financial planners at State Bank and Trust, they will be well on their way to achieving their long-term goals of retirement planning and saving.

Thank you to Sherri Richards and The Forum for inviting The Village to participate in this worthwhile series, and to each of the families for opening up their financial lives to the Forum and blog readers. That is not an easy thing to do.

If you have questions about your own financial situation, contact The Village at 701-235-3328, 1-800-450-4019 or

Redemption, Reflection & Appreciation

John and I have learned many little things while working with the Village and our financial counselor Josh.  The BIGGEST lesson learned was opening the line of communication between us about money and spending.  We are slowly but surely getting caught up and the spreadsheet that I used to track spending in December and January  has become a necessity to manage our finances.

We would like to send out a HUGE THANK YOU to Forum reporter Sherri Richards for writing our story and spending time with each family.  I believe that finances are at the heart of many problems for families, businesses and the world.

Here is a short list of the others we’d like to thank:

* Josh, our counselor at the Village for being so positive and helping us to see the light.

* The Village Family Service Center for offering so many programs to anyone and everyone in the community that is suffering and in need of a little help.

* State Bank  & Trust for your awesome gift that will help further our financial success.

* The Dockter and Richman Family for sharing their stories and proving there are a variety of financial worries affecting our community.

* Friends, family and readers that supported us through this endeavor.

And last but not least THANK YOU to our children for being understanding about our cutbacks and the changes that were made in our finances to better our lives.

Thank You!!

My wife and I want to thank the Forum and Sherri for putting together this Financial Fix-up.  We learned alot through this process and are well on our way to meeting our goals of paying off our credit card debt quickly.

Next I would like to thank the other two families involved.  We all faced different obstacles and were in different places in our lives.  But no matter what situation was faced, there were many things to learn from them.

I also want to thank our counselor at the Village, Tracy.  We didn’t see eye to eye with her on a few items but what she did force us to do was to communicate with each other.  Meghan and I have been completely on the same page since our meeting with Tracy.

Finally I also would like to thank State Bank for sponsoring this project.  For going through the process they sent us a gift which was the final little bit we needed to finish paying off the first of four credit cards.  Now we are getting to work on the next one.  Here’s to having that one paid off just as quickly as the first.

It’s your turn for a fix-up

For the three families that took part in The Forum’s Financial Fix-up, the past six weeks have gotten them looking closer at their finances and taking positive steps regarding their money. Perhaps you’ve been inspired to do the same. Today, we’re compiling the best advice the couples received to outline how anyone can take on their own money makeover. These are actionable steps, broad enough to apply to most individual situations. For more detailed, personalized advice, contact The Village Family Service Center or a financial adviser.

Step One: Get the numbers down on paper. You can’t do anything about the dollars unless you know how many you have and where they’re going. Figure out what your take-home pay is, not your total salary, advises Tracy McFarlane, a financial counselor at The Village. Subtract out things like taxes, insurance premiums, flex dollars, child support and retirement savings. This is your spendable income.
Then write down what you spend in different areas (housing, food, transportation, clothing, etc.). Determine if those numbers are accurate by tracking your spending for at least two weeks.

Step Two: Balance that budget. In other words, make sure as much or more is coming in than is going out. There are only two ways to fix a budget that’s out of balance: Increase income or decrease expenses. To increase income, take a second job or find one that pays better, get a roommate or rent out a room, and sell unneeded possessions, McFarlane said.
As far as expenses, every budget has these two categories: fixed and variable. If fixed expenses are higher than recommended maximums, the budget may be unmanageable, McFarlane said. For example, your rent or mortgage payment should not be more than 30 percent of your net income. Variable expenses are the easiest to limit when a budget is out of whack. These include groceries, eating out, entertainment, hobbies and technology. This is when people really need to analyze their wants and needs. Remember, they may be temporary sacrifices. “What little things can you do now that will make a big difference as you go forward?” McFarlane said.

Step Three: Pay off debt. Figure out how much you can pay toward your debt each month, and make this payment even as the balances go down. This in effect “snowballs” your payments. “The power payment method is always the way you should approach any debt, whether a self-administered plan or through a program,” McFarlane said. Call your credit card company directly to try to lower your interest rates. Most have an internal hardship program, McFarlane said. Or contact a consumer credit counseling agency, like The Village. Families with small children who receive more than $200 in a tax refund should change their withholding on Form W-4, McFarlane said. Otherwise they’re giving an interest-free loan to the government, perhaps while paying interest to a credit card company, she said. “It’s really putting you further behind,” she said.

Step Four: Save for the future. Budgets should also include a third category for periodic expenses, such as insurance payments, medical bills, car repairs, home maintenance and gifts, McFarlane said. Add up these quarterly or yearly expenses and divide by 12. Put this much into a separate account.
Also save for emergencies, putting aside three to six months of expenses, and start saving for retirement with diversified accounts. The first place to start saving for retirement? Your company’s 401(k) or 403(b) plan. Paul Jarvis, a portfolio manager at State Bank and Trust in Fargo, said he sees far too many people not taking advantage of the company match. “Don’t throw money away,” Jarvis said. “Take advantage of money your employer offers. Contribute up to the match.” Then start increasing your contributions. Many people aren’t putting enough toward retirement, especially now that people live longer and want more active, fun-filled retirements, Jarvis said. To ramp up savings over time, each time you get a raise, increase your retirement contribution. “That way you’re not going to miss your money. You’re not going to see a drastic change in your take-home pay,” he said. Look at diversifying your savings. Investing in a Roth account, whether a Roth IRA or Roth 401(k), will provide tax diversification in retirement. Also make sure one particular stock or bond is not more than 10 percent of your portfolio. “I like to see it less than 5 percent,” Jarvis said. “Mutual funds are a good way to do that,” he added.

But first things first: “Create a written budget and live by it. That’s the most important thing,” McFarlane said. “Design a budget that works with your income and your goals. … Stop adding to your debts, and make a plan to pay them off.”

Readers can reach Forum reporter Sherri Richards at (701) 241-5556

Do you have ‘Frugal Fatigue’?

Minority Found Lifestyle Changes to be Positive

Are you weary of pinching your pennies? You may have frugal fatigue.

The January poll hosted on the National Foundation for Credit Counseling (NFCC) website,, queried consumers regarding their attitude toward “frugal fatigue,” the weariness associated with long-term restricted spending. (The Village Family Service Center, a local nonprofit credit counseling agency, is a member of the NFCC.)

“It is not surprising that the majority of respondents, 66 percent, indicated they were tired of pinching pennies, but would have to continue that lifestyle,” said Gail Cunningham, spokesperson for the NFCC.  “Even though the recession is technically over, that textbook definition isn’t being felt in American households.  The interesting finding is that more than 20 percent of those weighing in said they had implemented financial lifestyle changes that they found to be positive and intended to keep them in place.”

 The recession introduced many Americans to a financial lifestyle they had not previously known, one that included tracking spending, creating a budget that was in line with income, and saving for the inevitable rainy day. “Even though these positive actions may have been forced upon consumers out of necessity, any time a person takes control of his or her financial well-being, it’s a step in the right direction,” continued Cunningham.

When one in five people makes a decision to permanently alter their financial habits, presumably spending less and saving more, it potentially impacts the economy as a whole. This could be worrisome to some who encourage increased spending as a necessary component to the country’s recovery.  Nonetheless, it can be argued that a financially stable household is critical to a financially stable America.

The NFCC supports financially responsible behavior, and congratulates those who have embraced it as their new lifestyle. Further, the NFCC encourages the 66 percent of Americans who are reluctantly remaining in the restricted spending mode to examine their current financial habits to see if some of the elements are worth implementing permanently. 

The actual poll question and results are as follows:

Do you have “frugal fatigue?”

A.  Yes, I am tired of pinching pennies, but will have to continue that lifestyle = 66%
B.  Yes, I am tired of pinching pennies, and have decided to begin spending more = 5%
C.  No, I’ve not made any spending changes in recent years = 8%
D.  No, I have made lifestyle changes, but they are positive and I intend to keep them = 21%

If you need help dealing with frugal fatigue, contact The Village Family Service Center at 701-235-3328, 1-800-450-4019 or Certified financial counselors at The Village see clients throughout North Dakota and Minnesota.

Credit Score Basics

By: State Bank & Trust (Member FDIC)

You may have heard that your credit score is important, but what is a FICO score? FICO is short for Fair, Isaac and Company. The Fair Isaac Company developed custom software back in the 1980s that helped other companies determine a credit risk based on a number derived from a person’s credit history. This number soon became a standard that was adopted by the 3 main credit bureaus: Equifax, Experian and TransUnion. The FICO score ranges between 300 and 850.

Credit Score vs. Credit Report

A credit score and a credit report are 2 different things, although the credit score ultimately depends on your credit report. Your credit report is simply a detailed account of your credit history. The report will contain information such as:

  • Current credit accounts
  • Payment history
  • Credit inquiries
  • Credit utilization
  • Bankruptcy

A FICO credit score is based off of your credit history, but it’s not actually a part of your credit report. Instead, the 3 major credit bureaus will calculate your FICO based on your credit history they have on file. This means you can have up to 3 different FICO scores at one time. Your FICO score does not come with your credit report and it isn’t something you’re entitled to annually. You may have to pay a fee to actually receive your score.

What Makes Up a Credit Score

A credit score takes into account a lot of different information from your credit report, but it’s not all treated equally. Some aspects of your credit history are more important than others and will weigh more heavily on your overall score. Your FICO score is essentially made up of the following:

  • Payment History – 35%
  • Total Amounts Owed – 30%
  • Length of Credit History – 15%
  • New Credit – 10%
  • Type of Credit in Use – 10%

Why Your FICO Credit Score is Important

Your credit score will follow you for as long as you live. Not only does your credit score determine whether or not you’ll receive a loan, it also determines how much it will cost you to borrow that money. People with higher credit scores are deemed to be less of a risk and therefore will typically receive the lowest interest rates. Those with lower scores are viewed as more of a risk so you may receive a higher interest rate.

How to Receive a Free Credit Report

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months.

Here are some common questions about getting free credit reports:

Q. How do I order my free report?
A. There is one central website, toll-free telephone number and mailing address for all three companies. Do not call the companies directly. To request a report, do one of the following:

Q. What information do I have to provide to get my free report?
You will need to provide your name, address, Social Security number and date of birth. If you have moved in the last two years, you may have to provide your previous address. You may also be asked for information only you would know for security purposes.

Q. How long does it take to get my report after I order it?
A. If you request the report online, you should be able to access it immediately. If you order the report by phone or mail, it should be mailed to you within 15 days.

Q. Should I order a report from each of the three nationwide consumer reporting companies at the same time?
You can, but some financial advisors say staggering your requests during a 12-month period may be a good way to keep any eye on the accuracy and completeness of the information in your reports. Note that information from each company may not be the same, because their sources may be different.

Q. What if I find errors or inaccuracies on my credit report?
Under the FCRA, both the consumer reporting company and the information provider are responsible for correcting the information. Contact the company in writing with your corrections.

Changes help give families new hope

One month ago, we introduced readers to three families who had made a public resolution to fix up their finances.

Each family met with a financial counselor from The Village Family Service Center on Dec. 13 or 14 and received a customized action plan to put them on a sound financial path.

Today, we check back to see how they’ve implemented the financial counselors’ suggestions and what progress they’ve made on their money makeovers. As an incentive for taking part in the series, State Bank and Trust is giving each family $500 to put toward their financial goals.

The Graveses
John and Annette Graves of Moorhead found themselves juggling bills each month, trying to stretch their inconsistent income.

Soon after meeting with financial counselor Joshua Huffman, John was hired for a full-time maintenance position, providing a steady paycheck for the family. Annette said this has meant the family doesn’t need to keep pushing off bills. “Now I know when that check is going to be there,” she said.

Child support payments from Annette’s ex-husband have also been steady, she said.

Annette has been tracking the family’s expenses on a detailed spreadsheet – a tool a friend recently asked to copy for her own household. Annette said it’s shown them areas where they can cut back. For example, the family was spending more on eating out than they realized, she said.

“It was really interesting to finally see where all the money went instead of saying, ‘Oh, the money’s gone’,” Annette said.

While they’re still behind on a couple bills, they haven’t charged anything to a credit card. “I think we’re really moving forward,” she said.

The couple is also communicating more about money. John sits down with Annette to help pay the bills.

Huffman suggested the Graveses use their $500 to get totally caught up on bills, and if current, put some in savings to create a buffer. That was exactly what Annette had planned. “There’s light at the end of the tunnel. We can see it,” she said.

The Dockters
Steve and Meghan Dockter racked up $40,000-plus in credit card debt during a medical crisis, and stopped communicating about their money.

Since meeting with Village counselor Tracy McFarlane, Steve said the couple has paid off more than $5,000 on their cards. The money came from cutting back their expenses like eating out, a check that Steve got for coaching basketball and the fact they each got three paychecks in January.

One of their four cards (the one with the smallest balance) should be paid off in a couple weeks, he said. The couple plans to snowball their payments to pay off the debt quicker.

They decided to not take part in The Village’s Debt Management Program, which McFarlane suggested. They are still using one of the four cards.

Meghan has started graduate school, and together they’ve started Financial Peace University through their church. The Dave Ramsey class spurred them to set aside $500 in an emergency fund, money that gave them great peace of mind when Steve got into a minor car accident.

McFarlane had also suggested the West Fargo couple set aside money each month for periodic expenses, like car repairs. They hadn’t agreed with her at the time. “It’s the same message, but I think the way it was worded, we came away with a different message. It made more sense to us,” Meghan said.

McFarlane suggested the couple use their $500 to pay down a higher-interest credit card.

The Richmans
Nathan and Brenda Richman started looking at their finances last summer, feeling off track after a career change by Nathan four years ago. They said the Financial Fix-Up gave them the motivation to continue work toward their goals: get out of debt, save an emergency fund and save 15 percent in retirement.

They now have about $1,000 left on their car loan, having paid off about $6,500 in six months. They plan to put their $500 incentive toward that loan.

On Monday, they received an action plan from Paul Jarvis and Tyler Stegman of State Bank and Trust in Fargo to work toward their savings goals.

Their current saving plan would leave the Moorhead couple short in their retirement, Jarvis said. But by putting the $655 surplus in their budget (once the car loan is paid off) into a money market account and Nathan’s 401(k), they should be able to retire comfortably at ages 67 and 62, a little more than 20 years from now.

“The critical point here is not to waste cash,” Jarvis said.

That $655 per month would also help them achieve a stated goal, bringing their savings percentage to 17 percent of their gross income. Jarvis also suggested increasing their retirement contributions by 1 percent each time they received a raise, and rolling over old retirement accounts into an IRA.

“I feel a lot of hope,” Brenda said.

“This is encouraging. I think we’re more comfortable than we were before,” Nathan said.

Coming Saturday
In Saturday’s Forum, read about how you can take on your own financial fix-up, with a four-step action plan. 

Readers can reach Forum reporter Sherri Richards at (701) 241-5556

Conflict Stinks

By Nathan Richman

I’m not a competitive person by nature.  Unfortunately, whenever more than one person is involved in family finances, disagreements are virtually inevitable. This is a good thing, because everyone ought to have their say in how the money is spent. At the same time, it feels a little uncomfortable, because at least in our family, the negotiating process is often conflictual.

Last summer, my wife and I agreed to become more intentional about our finances. We rolled up our sleeves and got down to business.  We participated in an educational seminar, which was ironically called Financial Peace University!  The information provided a blueprint and common language with which to discuss our situation.  It also provided tools for tracking expenses, building a budget, and monitoring progress toward our financial goals.  We established our processes and began doing the actual work of living a disciplined financial lifestyle. 

We quickly discovered that over the years, we had each become individual spenders sharing a common checkbook.  Each of us did what we wanted while keeping an eye on the month-to-month solvency of our accounts.  If we felt paid up, we would each splurge a little more, and when we felt broke, we would both pull back a little bit.  This process all but guaranteed that we would feel out of control with regard to spending and frustrated with each other in terms of how we spent.  In other words, the lack of communication was increasingly a source of conflict. And the “cure” for our former complacency was to increase our communication, which of course led to all kinds of additional monetary discussion and stress. 

Guess what … it got hot in the kitchen at our house! I’m grateful that both of us have become more skilled at marital disagreement since we said our vows 20 years ago. It turns out that “for richer or poorer” is hard work, and we found ourselves working a lot. (Definitely build a strong support structure and positive conflict resolution skills before embarking on this journey!) The discussions we had were often frustrating, occasionally painful, but almost inevitably productive in bringing us closer to unity on how we spend our money.  The great news in all this is that when we got “in sync” with each other, the conversations became easier and shorter.  We started realizing financial peace, and enjoying the benefits of rational spending.  Among other things, we stopped fearing the end of the month, because we knew that we had all the money we needed to make it through.  We even had an emergency fund in case we got a financial surprise.

I really don’t like conflict, but I’m a strong believer in the benefits that come after we communicate, understand, negotiate, and agree on our common interests. Most of us prefer the security of what we know, even when it’s not ideal.  I’m glad to report that the process is bumpy, but the results are worth it. And she is worth it too!

Multiple Benefits of Working Hard on this project

When we started this project, our main goal was to communicate more about our money and how it is being used.  Through this though we are starting to see other benefits too.

Since we started this project, we have been very committed to eating at home and really limit our eating out.  Because of that we have gone out a maximum of once a week.  We still aren’t the healthiest of eaters but eating at home more often than not is healthier than eating out.  Because of that, in the last 4 weeks alone, I have lost 10 pounds.  As a basketball coach, teacher, husband, and father of 3 young kids, I don’t have time to work out right now as most of my time is devoted to one of those.  So the only change that has been made is eating at home.

Another great thing that is going to happen in the next couple of weeks is we will have one of our four credit cards completely paid off and will not be used again.  That in itself is a great accomplishment and will feel really good to get rid of.  But then what we will take advantage of is the power of snowballing your payments.  That payment that we put towards that credit card will go directly towards paying off the next one, so that we can pay that next one off even quicker.

Most money experts will tell you that if you are going to put extra money towards debt put it towards the debt with the highest interest rate.  And they are right, you will save the most money doing it that way.  We actually didn’t do that though.  Instead we decided to pay off the debt that had the lowest amount so we could get rid of that completely.  (Our highest interest rate is on the card that has the most debt.)  Who’s right??  The experts probably still are, but I’m going to be down to 3 credit cards very quickly, instead of still having four.

I tell my students all the time in class that there are many ways to solve a problem and I don’t care which way you choose as long as you do it right.  There are ways to make the problem easier or quicker to solve, or there is a very long roundabout way to get to the answer.  In the end does it matter which way you did it as long as you do it??  No matter what problem you are facing, commit to something that makes sense to you and then go after it.  Because of that, like I said we’ll be down to 3 soon.  Then it’s time to get it down to 2 and so on:)