PLEASE NOTE: This case study uses an actual client engagement but names have been changed.

Trevor self-referred for financial advice. At the age of 28, Trevor was going nowhere. He has a child but is no longer in a relationship with the child’s mother. He has a good job, but admitted at our first meeting that he was “terrible with money”. He buys stuff he doesn’t need, and is always short of money before his next pay. His bank has been “very helpful” by allowing him to dip into overdraft each month, even though he does not have a formal overdraft arrangement.

The first thing which I did with Trevor was to take him through the “Big Picture” exercise, to help him to realize that what was happening at the moment was one stage of the rest of his life. Left alone, it could threaten his financial situation for 50 plus years. Trevor had never considered the longer term future before, and I witnessed a real “light bulb moment” as he realized that he didn’t want to spend the rest of his life in the current situation.

This is an important tipping point as it now makes it easier to get clients to buy in to the strategies necessary to turn their lives round. The first thing to do was to get Trevor to complete a budget of his living expenses. This showed that he could live within his means, but, by the time he had met his debt obligations ($405 per month at 25% for a car loan due to end in three years time), there was nothing left.  Clearly this had to be addressed.

I was able to work out a plan with Trevor where he would cut his expenses, find additional employment (while he pays off the debt), enroll in KiwiSaver, and start to put aside $100 per month for savings. Trevor found this hugely motivating and couldn’t wait to “get started”.

The other important factor was to provide Trevor with the tools to help him to follow the plan. I gave him a range of tools including a budget tracking tool and a revised cash management structure. I equipped him with the necessary questions to take along to a meeting with his bank, so that he could start to follow a plan which worked for him, rather than a plan which worked for the bank.

When Trevor met the bank, not only did they help him to make the changes he requested, but they were so impressed with what he proposed that they offered to take over his finance company debt at 15% instead of the 25% which he was paying. Clearly this would make a big difference to Trevor as he pays off this money.

As a result of implementing the various changes which we proposed, Trevor is now on the way to a much more secure and fulfilling life.

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