The Molly Project: Episode 2

Last week, on The Molly Project…

Now you know the facts. Let’s start tackling the problems.

When I meet with someone to help them solve financial problems, I get inside their head and swim around in it for a while. The numbers NEVER tell the whole story. Every word they speak matters. Every nervous laugh they laugh matters. Every personality trait that I can pickup on matters. Once I “read them”, then I make a series of notes about their persona. I’m not making this up. This is what I do. I need to know how to motivate an individual. The numbers would never tell you this. It kinda explains why I snapped on that emailer yesterday. There was no way that another method would have worked with him.

Anyway, here are my professional notes and observations for Molly:

  1. Molly had no debt upon graduating from college. The debt came when she decided to switch careers, kicked off by going to grad school. She then decided that she didn’t want to pursue a career in the field of her advanced (expensive) degree. There’s a major underlying problem here. Debt was so foreign to Molly, that she had no idea how to deal with it. She chose to do what she always did; she strapped on her genuinely positive attitude and proceeded the way she had for the previous 27 years. She proceeded as though she didn’t have debt.
  2. There is hope in every financial situation. And Molly’s situation, believe it or not, is laden with lights at the end of the proverbial tunnel. She has a tax refund check on the horizon (amount to be determined). She has nearly $500 per month to put towards debt. And she has various bonus opportunities sprinkled throughout the year.
  3. We have over $450 per month to work with for Molly’s financial priorities. One of the major challenges that people face when trying to fix financial problems is they don’t know what to focus on. We only have so much focus and energy to put towards something that is currently stressing us out. All that Molly should focus on is $450. If she focuses on allocating this amount every month to the right debt, then she will succeed.
  4. Molly’s positive attitude got her into trouble, but it will get her out. She can see the silver lining in a tornado cloud. The world needs more people like her. She didn’t panic as things were getting bad. She should have. I need to get her a bit panicky.

The budget haps

Here are Molly’s expenses:

  • Rent: $550 (includes utilities)
  • Car payment: $225.84
  • Cell phone: $79.99
  • Car & Renter’s Insurance: $83.99
  • Groceries:$200
  • Gas: $150
  • Personal care items: $100
  • Medical: $50
  • Personal care services: $50
Total living expenses: $1,489/monthly
Minimum debt payment: $1,392/monthly
Total expenses: $2,881/monthly
Take-home pay: $3,333/monthly

MY MONEY: $452
Molly’s first task: Pay off Gap and Loft credit cards. And then put $200 into savings. That’s it. You are done until the tax refund check comes in. That was painless, wasn’t it?
Getting out of a major financial jam is difficult, but the solution is simple. You cannot convolute the situation by just firing all sorts of financial shots at your financial problems. The only thing that Molly can do, other than reducing spending (which she already did), is focus on the $450 she has to pay down debt. This is where people get themselves in trouble. They start flailing for a solution. Don’t flail, just proceed calmly.
Be sure to listen to my radio interview with Molly. It’s the February 17th episode (part 2). Courtesy of 93 WIBC FM.

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