Detailed Plan

1. Eliminate unnecessary expenses

Cable $95
Newspaper $35
Laundry $30
Miscellaneous $30
Home Phone $75
The goal is to get them to have a surplus, even if it is small at first. If they keep the
internet they can access most cable shows, and also the news. I think its reasonable to
ask them to make efforts at doing their own laundry items. I am assuming this is
probably work shirts? The mom doesnt work and if necessary I am sure can learn the
skill of laundering and pressing the shirts.
We are also going to take the miscellaneous out of the equation, because we will be
starting a savings that will be used for miscellaneous items if there are, or to pay off
debt. We also have $15 left there for gifts. If needed this can also be used for
miscellaneous, needed clothing items. If the couple needs to borrow from family let it
only be for miscellaneous items or repair.
Homophone is debatable, but its such a high cost and the parents both have phones.
Being a mom of 5, I know how important having a home phone is for emergencies etc
for when the parents are gone. Because the mom is home most the time even for work.
This one would be ok to eliminate and then possibly add back in when there is cash
flow.
Freeing up $265
I would ask the Hopefuls to sacrifice Clothing and Entertainment for the first years and a
half or so, 17 months. The first 17 months will be the most difficult to adjust to
financially.
Temporarily freeing up another $120
Total $385
This first plan allows them to make all their payments, plus on their debt and have a
surplus of $77
2. We are going to aim to pay off the smaller debt with the higher interest rates first,
and keep all the payments the same with the other cards, paying not the minimum
payment, keeping the payment the same.
Credit Card #2 triple the payment $69.34 to be paid off 17 months.

Putting clothes back into the expenses.

The next debt to pay off would be the medical bill. With almost doubling the
payments of $130.14 for 11 months this will be paid off.
At 20 months the car is paid off, after which the 200 payment will go into
savings.

Total $350
3. Within 26 months, a little over 2 years, two of the credit cards at 15% will be paid off.
I would at this point recommend building a savings even if it is a small portion.
Adding $40 into savings each month will give some options for the future investing.
4. After 30 months, 2 years, we have paid off 3 credit cards and are seeing a savings of
$480.00. Woohoo! I think it would be fair at this add entertainment and gifts back into
the budget. We will increase savings and work at paying off the last two Credit Cards.
This will take about two more months. By not changing the payment amount we are
able to pay the credit cards off quickly by sticking with a budget and paying more than
the minimum balance.
5. At 34 months the only Debt left is the home, now we have a savings of $5,560.00.

Mortgage 1 $35,844.00
Mortgage 2 $17,313.00

At this point the Hopefuls can think about retirement, they have a good start to savings
and start investing. They can do a corporate bond after tax rate of 6% for the first three
years investing $1,060.00. they would be looking at approximately $3,374.62.

6. After three years they can take the money that they would normally spend on their
home and invest that also for the next 27 years $177,855.03
This would be a great plan to follow if the Hopefuls are willing to stick with the correct
principals of managing their money, investing, and staying out of debt.