We ask Denverites how they spend their hard-earned dough.
Damien Jenson, 34, stay-at-home dad
Karin Jenson, 35, attorney
The Story The childcare dilemma took on a decidedly modern twist for Damien Jenson, a former restaurant manager, when he became a stay-at-home dad for his son, Sebastien, and his wife, Karin, went back to work as an attorney at a downtown law firm. With no student debt and just one car payment, the couple is on track to buy a bigger home (they had lived in their townhome for less than a year before they found out Karin was pregnant). Eventually, Damien would like to switch professional tracks and get into a music-related career, but for now he takes care of another baby a few days a week for some "play" money that pays for afternoon coffee breaks at Starbucks or to rent out space to play and write music each month.
The Makeover "Damien and Karin are going through an adjustment period with a new baby in the house, but are on firm ground," says certified financial planner Herb White. A priority is setting up a tracked, monthly budget. Karin has resisted in the past because she prefers to be less controlled by her money, but she now recognizes it as an important milestone in reaching their goals. So far, additional baby costs have had little impact on the family's finances because Damien and Karin had shifted funds normally dedicated for travel to caring for Sebastien. But with a budget in hand, the couple should be able to fund things they like to do (travel) and things they want for their family (buy a bigger home).
Annual Income: $100,000+
- Auto Expenses: $950
- Clothing: $100
- Groceries, Diapers, and Target Runs: $950
- Eating Out: $230
- Entertainment and Recreation: $130
- Home Expenses, Utilities, and Mortgage Payments: $2,700
- Insurance and Medical Expenses, including hospital bills from birth: $700
- Total: $5,760
Kati Bostwick, 28, attorney
The Story Since graduating from the University of Colorado Law School in 2007, Kati Bostwick has worked hard to pay down her student loans. She still rents an apartment in Capitol Hill and has negligible credit card debt, but now the 28-year-old attorney is wondering what do with the $12,000 she's saved. Invest it? Use it for a down payment on a home? Pay off student loans?
The Makeover Kati is in the enviable position of having a good career, bright future, and no emotional issues around money, says financial planner Jake Koebrich, meaning that she can focus more on a shopping list of "things to do," instead of typical issues like debt and stress management. Protecting her property through renter's insurance is vital, as is setting up disability insurance. Kati should also set up savings accounts earmarked for her goals, like making a down payment on a home and paying for vacations. She can invest her current savings into these accounts while still meeting her long-term goal of paying down her student loans.
Annual Income: $69,845
- Rent: $750
- Clothes: $250
- Phone: $50
- Gas: $50
- Groceries: $300
- Eating Out and Entertainment: $250
- Student Loan Payment: $624
- Car Insurance: $50
- Health Insurance and Costs: $58
- Cable TV: $50
- Gifts: $50
- Personal Care and Incidentals: $25
- Total: $2,507
Dorothie Hughes Werth, 40, stay-at-home mom
Michael Werth, 39, art director
The Story When Dorothie Hughes Werth was laid off from her marketing executive job during her sixth month of pregnancy, the family lost more than half of its income. Unemployment helped for a while, but unpaid medical bills from a C-section began to pile up on the financially strapped couple. Michael and Dorothie carried three mortgages: two on their home (one has an adjustable rate set to change soon), and one on a Leadville condominium. Selling one of their properties seemed unavoidable, but the couple didn't know how to find the money or time to make the house or condo sale-ready. They sold their "gas-hogging" Range Rover to help with the cash crunch, but the remaining financial stress was creating fissures in the fabric of the marriage as Dorothie tried to stay home with Ryder, their son, and the couple picked up freelance work to help make ends meet.
The Makeover To start, planner Jake Koebrich asked Dorothie and Michael to individually complete a life questionnaire, answering questions about how satisfied they were with their careers and the amount of stress that money puts on their relationship. The couple read their answers to each other over dinner and a bottle of wine. "It got really emotional," says Dorothie, "but it reminded us how many of our goals are similar." Armed with their shared goals, the couple could focus on "big stepping stones," or priorities that would help move them through this precarious time. The first big step came when both admitted that letting go of some debt and taking stress off of their family was much more important than holding onto a house. They have already met with a Realtor to explore options and a timeline for selling their Denver home. Once they recognized that keeping the Leadville condominium was more important to them, they could strategize how to start renting that property to generate additional income. "They knew what they needed to do," says Koebrich. "They just needed to talk it through."
Annual Income: $85,000
- Entertainment and Recreation: $125
- Dining Out: $35
- Groceries: $300
- Home, Utilities, and Mortgages: $2,441
- Personal Care and Incidentals: $153
- School Loan Payments: $50
- Pets: $20
- Health Insurance: $200
- Auto Expenses: $585
- Public Transportation: $108
- Baby Gear: $42
- Child Support: $560
- Total: $4,619
Judy Browne, 47, owner/founder of Workshop for Women
Bill Ryan, 60, retiree
The Story After working at a lumber business for 22 years, 60-year-old Bill Ryan was ready to retire. His wife—whom he met in 2003—joked that she would become his retirement fund. A former manufacturing engineer, Judy had started Workshop for Women, a business dedicated to teaching women home-maintenance skills, in 2004. The couple agreed to live off of Bill's IRA retirement funds while Judy's business became profitable. But the stock market's erratic behavior has made them nervous about dipping into Bill's account. They have little debt—their two cars and two motorcycles are paid off—and several real estate investments to help out, but they are paying $800 a month for COBRA health insurance.
The Makeover "Judy and Bill are a unique couple in the way they approach life and the way they approach finances," says Lisa Purcell. "It is very dynamic and there are a lot of moving parts." Fine-tuning their finances so that their inflows match the outflows is the overarching goal. That means drafting wills, managing their rental properties, and finding less-expensive health insurance. To help, Judy will start working part-time as a home inspector to minimize the amount the couple pulls out of Bill's IRA. Most important, Judy and Bill plan to meet more regularly with a financial planner to make sure that their investments match their retirement goals.
Annual Income: $77,700 from IRA distribution and rental properties
- Home, Utilities, and Mortgages: $4,044
- Car Payments: $0
- Health Insurance: $800
- Groceries: $520
- Gas: $320
- Entertainment and Incidentals: $1,410
- Total: $7,094
Marsha Corn, 41, social worker
Michael Penka, 39, quality assurance analyst
The Story Marsha Corn bought a 100-year-old home in Sloan Lake 10 years ago, and the 800-square-foot space was a perfect fit for her single lifestyle. But five years ago she adopted a daughter, Olivia, and things started to feel cramped. In 2006 she met Michael, and when they married last August the couple squeezed two households into the tiny home. With a baby boy due January 11, the growing family dreams about staying in the neighborhood and building on their current property. But first they have to confront their different money management styles—Mike rigorously tracks his monthly spending, and Marsha has a more laissez-faire approach. Says Marsha, "We seem to be just piddling away our money instead of figuring out where it all is and how it can work for us."
The Makeover Herb White helped Mike and Marsha set up short-term deadlines to help meet their long-term goals. "The first goal is to within a month cut $100 to $200 a month out of the budget," explains White. The next is to rent Mike's bachelor condo, which has been empty and draining $820 a month. Within a year, the couple will free up more than $1,000 a month to put toward their goal of building a new house in their current neighborhood. Meanwhile, the new family needs to create wills, designate durable powers of attorney, and secure life insurance for Marsha to make sure that their personal and financial goals remain in synch.
Annual Income: $120,000
- 403(b) Loan: $75
- Auto Expenses: $633
- Charity: $25
- Clothing: $510
- Computer: $36
- Credit Card Payments: $25
- Dining: $546
- Coffee: $16
- Education: $478
- Entertainment and Recreation: $728
- Gifts: $193
- Groceries: $680
- Gym Membership: $29
- Home, Utilities, and Mortgage: $2,757
- Health Insurance and Costs: $471
- Personal Care and Incidentals: $396
- Pets: $46
- Storage Unit: $99
- Subscriptions: $20
- Vacations: $286
- Total: $8,049