Money Makeover Revisited: Climbing out of debt in the new year
By Dorothy Rosen • Bankrate.com

Dorothy Rosen, the Dollar Diva

Six months ago, Michael Smith, a Michigan police officer, came to the Diva for help. "I'm starting to feel as though I'm sinking in debt," he lamented. "I want to be in control again."

Buying a motorcycle he couldn't afford put 28-year-old Mike in a bad place, financially. The $155 loan payments were more than he bargained for, and no matter how hard he tried, he just couldn't pump up his paltry $270 savings balance. For Mike, not having a savings cushion was extremely nerve-racking.

Today, officer Smith is back in control of his finances. He understands how critical it is to know what comes in and goes out each month, and is automating his record keeping to get the job done. "I am slowly transitioning to Quicken," he tells the Diva; "I sometimes forget to update it, but I'm getting there." It takes a little while to get into the groove with Quicken, but once he does, there will be no turning back. Reports are created with a couple of keystrokes, and money management will be so easy, he'll wonder why it took so long to get with it.

Mike's online telecommunications business is moving slower than he'd hoped, but the money he's making is helping to pay down the debt, and he's working on building his nest egg. He happily reports, "I've projected some figures and should be sitting pretty by April 2002." Not bad for a guy who was crying the blues six months ago.

Progress is a great motivator, and Mike is moving forward at a nice clip. "You've been a great help," he tells the Diva; "I can definitely see improvement from a few months ago." He's back on track and optimistic about the future; The Diva thinks that's a fine way to start the New Year.

-- Posted: Jan. 11, 2002