Podcast: Finding the Money to Reach Your Goals
In this episode of Money Smarts, a podcast of Summit Credit Union, we're talking with a financial coach who's helped people like you go from living paycheck to paycheck or feeling stressed about money to living their goals and dreams within a year. Listen to learn how you can find the money to reach your goals.
AMY CROWE: Welcome to Money Smarts, a podcast of Summit Credit Union, where we connect people and inspire action to create member and community wealth. As a not-for-profit financial cooperative, Summit Credit Union exists to improve our members' lives and help them reach their dreams. Our Money Smarts podcast is just one way we engage members in the community in conversations about money that inspire you to spend smart, save more, and take action to build a richer life.
Welcome to Money Smarts. I'm Amy Crowe, Financial Education Specialist at Summit Credit Union and your host for our time together today. We are delighted to have Sherry Johnson, who is the branch manager of our Rimrock Road branch as well as the manager of the staff who serves members on our personal teller machines, plus Sherry is a former Project Money coach. So happy to have you here today, Sherry, welcome.
SHERRY JOHNSON: Well, thanks for having me.
AMY: Absolutely. We wanted to invite you in to the studio today to share a little bit about how you've helped members find money in their personal budgets to reach their financial goals, especially as a Project Money coach. So tell me a little bit about Project Money.
SHERRY: Well, Project Money is a financial challenge where we help couples reduce debt and save money, all in a seven-month period, and then the winner is the proud recipient of $10,000.
AMY: And I heard the other four participants get $2,500 as well.
SHERRY: That is true.
AMY: And, you've actually had the opportunity to work with two of our families in the programs to the nine years that we've had Project Money, Louise and David, and Carrie and Chris. Tell me a little bit about those families.
SHERRY: Well, Louise and Dave were in a unique situation. Dave had some health issues that caused them to really take a look at their finances and figure out where they were struggling. And, Carrie and Chris were looking for advice and guidance on how to manage money after coming out of a business venture that didn't go as, quite as planned.
AMY: And that can be really a financial stressor on the families, which is one of the reasons why they applied for the program. You know, your participants went on to have amazing results. They achieved their financial goals in the seven months of working with you.
So often, our members come in to the credit union, and they've been living paycheck to paycheck, or they're feeling stressed about their money. I know one of the first things that we kind of advise them is to really dig into their finances, and that's something that you probably did with Carrie and Chris and Louise and David to really figure out where their money is going. What is one of the best pieces of advice that you can give somebody when they're looking to dig into that and figure out where their money is going?
SHERRY: Well, my first piece of advice is to track your finances to see where your spending is actually going. And to do this, there's a couple different ways. You can either, if you do cash or use cash, you could keep all your receipts and then track them on our daily tracking sheet that we have available for you. And you would just put them in each category. So if you eat out, you put it in the eating-out column. If you grocery shop, you put it in that column. Otherwise, we do also have, if you use a debit card, you could pull your statement, and from your statement, you can put the totals of the amounts that you're spending in each category on the sheet as well.
AMY: Oh, and that sheet is available on our website, in the Money Smarts section of our website. What really worked for Louise and David or Carrie and Chris? Do you remember some of the best tips that they had?
SHERRY: Well, for Louise and Dave, they had three children, so figuring out how to make the meals at home and take them with you, when you're going to your swim lessons or you're out and about, was a key eye-opener for them. Not eating out really did save them a lot of money.
And for Carrie and Chris, I think their biggest area of where they were able to save money, since they already did so much of eating at home, was just using what they already had and not just continuously buying the same items at the store over and over again.
AMY: Oh, gosh, I remember there was this blog that Carrie did in her year of Project Money where she talked about how they ate out of their freezer or something like that, and she made it a challenge.
AMY: And she took all that money and either put it toward savings or debt reduction then, right?
AMY: So there's also this new tool that we have at Summit Credit Union called Summit's Climbr, and it offers a really fantastic opportunity to automate kind of tracking your expenses where inside online banking, you can click on the Money, Climbr tab, and it will bring in all of your transactions and will actually tag them by retail store. So whether it's a gas station or a grocery store or a big-box store, it automatically knows, and it will tag everything for you, and it will add it up for you, which is fantastic if you don't want to take the time to actually save all of those receipts and spread them out on the kitchen counter to organize them.
SHERRY: That's right.
AMY: So Summit's Climbr is a great tool. I love how you said, you know, we have an Excel worksheet on our, on our website, but we also can do it just by hand. I mean, it's pretty powerful to see a huge stack of receipts.
SHERRY: I think also the things that we're learning about Climbr that's very helpful is it doesn't just have to be a Summit debit card or your Summit items. You can pull in other credit cards into that, so you can get the full financial picture.
AMY: Oh, yeah, because you can also pull in like if you have a spouse or a partner, and they have a checking or savings account at a different financial institution, you can pull that in. You don't need to have access to their accounts. I mean, they have to give you the username and the password to be able to pull it, but you can't, obviously, if you're not on that account, you can't go and withdraw money or anything like that. So it's just the data that you're seeing inside Money Minder to get a full family picture of wherever you're spending your money.
SHERRY: That's right.
AMY: So one of the things that, you know, after determining and pulling everything into categories and really looking at those totals, what were some of those aha moments, besides the Louise and David were like, we're spending way too much eating out? We're going to make it a conscious effort to start packing our lunches. What did that trend data that those families saw really, how did they start making other changes?
SHERRY: Well, what we did is we took a budget, and put all of their monthly items of what they spend their monthly bills on, and we tried to determine where their finances were going and how much they actually could have allocated towards either eating out or grocery shopping or gas. Once you categorize how much money you have coming in and plugging it into a certain category, then that will tell you how much you can spend on each of those items.
And for Louise and Dave, it was just knowing that they had all of the expenses of three kids and going to school, because they had a higher tuition than most people. So they had, and they were putting all of their money into their checking. When I met them, they didn't have a savings account or anything like that. They were just putting everything in there like, oh, I can pay a bill today, and I'm just going to write a check. But they never really knew what was going in or going out, because it was all going into the same pool of money.
AMY: Oh, gosh, and then they couldn't separate in their minds really what this is allocated for, where the, where, what this is allocated for. And that's kind of hard to make good money choices then when you don't have things kind of in pools of money to use.
SHERRY: Exactly. Right, and you can't get a big picture of where your funds are going, because you can't visually see it. So that budget worksheet really gives you that blueprint of your finances.
AMY: Well, we have that budget worksheet located out on our website on the Money Smarts page, and it really becomes this tool where you can take several months to figure out what the best budget is for you. I know Carrie and Chris really kind of struggled with that, because they didn't want to really spend any money, but then they allowed themselves to.
SHERRY: Yeah, and for Carrie and Chris too, it was hard, because Chris had taken a job that paid significantly less than what he had made before. And through the Project Money, he got a new job which paid more money, and then they were able to take the extra, and start applying it to debt to reduce their debt a lot quicker.
AMY: It's a huge example of the fact that budgets are fluid, that they're constantly changing. I think a lot of people create a budget at the beginning of the year, and then they say to themselves, well, that's my budget, I'll try and stick to it, when something always happens.
SHERRY: Yeah, and you have to have that emergency money put aside for when those uh-ohs that happen and like…
AMY: Or the really fun uh-ohs.
AMY: I like the fun uh-ohs. I like to be able to plan for that. So you have all your categories, and you can directly create those categories into a budget. So you're like I want to spend my money on this. I want to spend this much on this. I want to spend this much on this. Did they have to tie those back to their values in the things that they found really important?
SHERRY: Well, yes, they did. And, I mean, taking a big look at the overall picture, they were able to determine how much money they wanted to put into, well, after they determined what they, all their expenses were, they could see how much money they needed to put into each of those categories. And once they realized they didn't have enough funds to go into all their different categories, that's when the fun begins. That's when you have to decide what are you going to do less of, so that way it creates additional money?
Or, you know, a person could get another job to add more income into that, so that they don't have to technically give up anything. But for us, it was, you know, how much are you spending on your haircuts? How much are you spending on oil changes? Where else can you go? Can you use coupons? What options are there out there for you?
AMY: Yeah, and it really becomes not telling yourself that you're missing out on anything. It's re-aligning things to your values. Plus, did you talk with them a little bit about how this was for a short period of time?
SHERRY: Yeah, so we knew that for Project Money being a seven-month period, we had to do a lot of condensing, and that would, a normal family might take a year to put together. We had like two months. So it was really just jumping into it and deciding what they were going to keep in their budget and what they were going to do without just for a short period of time, you know, in order to make the numbers work for them.
AMY: Well, then after they've achieved a goal, they can always loosen up a little bit.
AMY: I mean, I think that's the beauty of be able to have a budget and track your expenses is you're holding yourself accountable, but you also see light at the end of the tunnel.
SHERRY: Well, and it depends how important that value or thing is to you, right? So Chris and Carrie, they had a living room project that they had been working on for three-plus years I think, and every time they would walk into their house, it was non‑livable space, so they couldn't get an appraisal done. Therefore, they couldn't re‑do their mortgage which they didn't like where their mortgage was at at the time.
But because they didn't have the finances to re-do the project that they needed to do in the living room, they were at a standstill. So they had to start saving money into that bucket for home repairs. And then once they had enough money there, then they could get the refinance of their mortgage, and it put them in a better position all around.
AMY: Well, it's what I think the best things about talking with somebody at Summit about your finances and your big picture and your goals and dreams is you never know what might come out of it, and someone else can help you develop a plan. I know you worked with Carrie and Chris and Louise and David over seven months, but I think the planning probably started from day one, didn't it?
SHERRY: It did, and they told me right upfront what was super important to them. I know that Carrie and Chris, for them, it was the boys and dad always went on a Fourth of July camping trip, and that was a non-negotiable. And that's okay to have a non-negotiable. That just means we had to figure out how much it was going to cost, divide it by how many weeks were left before they left, so we could start saving, so they would have cash to use versus using their credit card or pulling money from another account in order to be able to go.
AMY: Well, and when you're trying to find all the money to do the things that you want to do, I think what I've discovered through our conversation is you have to set a lot of little goals.
SHERRY: Yeah, and you have to be accountable in checking in with those. That might be utilizing a staff member that you're working with at the credit union. It could be your spouse, but that communication is key.
AMY: Well, and I know in our Climbr tool as well, there's something that you can set up where they're called spending targets which is kind of code for budget. And you can say, okay, I only want to spend $300 on groceries this month, and you can set that spending target.
And then because it tags everything and adds everything up for you, it will tell you that you might have spent 75% of that $300 budget maybe on the 23rd of the month, say that that happens on that day. And then you'll get a text message, or you'll get an email if you've set up alerts, and you could actually change your spending habits based on a positive money message coming to you.
AMY: That's pretty powerful when you're trying to hold yourself accountable, right?
SHERRY: That is true.
AMY: So one of the things I wanted to ask you too about your participants' journeys was, you know, what did they really struggle with when they were faced at looking at those hard decisions? It's really, you know, you have your goals, you kind of know what those spending targets are going to be and what that budget is, but what really was that struggle? Because it really is an implementation of not spending in your old habits, right?
SHERRY: Correct. So for both of my families, they both had children, and to try to find the time to sit down, and communicate openly with one another and knowing where the finances were going, that was a huge challenge, because they would make dinner, they would have homework, they would have to get the kids to bed. But then it was finding time to sit down, and review where their money was going. And knowing that Chris had his own debit card, and Carrie had her own, you had to talk, and find out where those finances were going, but you needed the time to schedule into your life to do that.
You can't just, oh, I got a meeting with Sherry at 1:00 tomorrow, and it is, you know, 9:00 the night before. It doesn't work like that. You physically have to make the time to review your budget, review what's going on, so that way you're able to be held accountable for that.
AMY: Well, and that's for someone who is single or part of a couple, whether or not you have joint finances or you have your own individual finances. It really is looking at those on a regular basis, and having those reminders pop up in your Outlook or your phone for you to go check on, you know, mobile banking or the mobile app.
I use our mobile app for Summit all the time. I'm transferring money back and forth. It's a really convenient tool, and so many people are using their phones for so many different things now that it's super easy to do, and you don't even need a computer to be able to transfer money back and forth. And I just love it. When you are in online banking, can you set up alerts in online banking as well?
SHERRY: You sure can, and you can set up the type of alerts that will let you know when your balance hits a certain dollar amount, so if you don't want to go below $50, it can alert you when you've done that. It'll alert you when a deposit is made, multiple options.
AMY: So those really are so many different ways that they can use tools from Summit whether it be that daily expense worksheet to be able to categorize all of your expenses, whether it's our budget worksheet to be able to pull together this is how much I'm going to spend in this category, in this category, in this category. Plus, of course, you’ve got to put all your bills in there. You got to put your income, where you're saving money, different things like that.
And those are both located on our website under the Money Smarts app, but, excuse me, the Money Smarts page, but then there's the mobile app and online banking and all of the different alerts that they have for that. And it's the consciously thinking about money in a positive way.
SHERRY: That's right.
AMY: So when you were working with Carrie and Chris and Louise and David, how did they feel at the end of their Project Money journeys, seven months in, that they've pulled together their expenses, they've made some tough decisions, they've pulled together a budget, they've tried to achieve that budget, they've had some setbacks, some successes. How do they feel after they've gone through that process?
SHERRY: Well, I know for sure that Carrie felt accomplished. She felt like she had gained so many knowledgeable tips throughout the program that she was forever going to be able to pass it, pay it forward to other people knowing that she had learned how to take $5 and stretch it or how to make, you know, the meal planning easier.
And with Louise and Dave, I know that they were able to plan for their family's trip to Hawaii. They had family there. So for them, it wasn't so much a huge expense once they got there. It was just getting the five of them there. But because we had set up a plan, and they were able to save for that, and they were able to go a year after the Project Money so…
AMY: That's so fantastic. That's being able to take someone from kind of a paycheck to paycheck, stressful situation to being able to live their goals and dreams within a year of feeling stressed.
AMY: I think that's really amazing to be part of something as an organization, because we're a not-for-profit financial cooperative, financial education, and advice and guidance are so important to what we do every day. When you're working with someone, and you see kind of that lightbulb moment, and then you can celebrate in their successes, how do you feel when that happens?
SHERRY: Yeah, it's, I get so excited, and I feel for these families, because you watch them grow, even if it's not specific to Project Money, but you watch your members, and you watch them come in on a daily basis. And when they are able to take away just even a couple tools that are going to work for them and apply it, and then they come back, and they're like so excited, it just makes you feel good.
AMY: Awesome. Well, thanks, Sherry. Thank you so much for being with us today. I really appreciate your time, and please join us again some time. Would you do that?
SHERRY: I would.
AMY: Awesome. Thanks, Sherry.
SHERRY: All right, thanks.
AMY: Join us next time for our Money Smarts podcast to get more tips, tools, and advice on how you can own your money. Discover more money smarts at summitcreditunion.com. Like us on our Facebook page, tweet us, or pin something from our Pinterest boards. That's all for today. Thanks for listening and remember, it's your money, own it.