Six years after Whitney Williams was laid off from his IT job at a pharmaceutical company, he and his wife, Diane, are still struggling to get the family back on firm financial footing. Uninterested in working full time for a company again, Whitney figured that his project management and business processing skills would enable him to charge $60 an hour and gross $120,000 a year working as a consultant.
Reality bites. Securing consultant opportunities has been unpredictable, which led to dry spells of up to six months and far less than the six-figure income Whitney was hoping for.
It’s all been rather disconcerting for Diane and Whitney, who have children ages 11, 8, 6, and 2. Between her salary as an engineer and what he earns as a consultant, they have a household income of about $150,000. While that seems like a healthy number, the Marietta, Georgia, family was accustomed to living on closer to $200,000 in household income. Financial strain has begun to show. They pay $13,000 in private school tuition for the children. They have $160,000 left on their mortgage, $26,000 in student loan debt, $28,000 on two car loans, and more than $10,000 in credit card debt. Unplanned expenses over the last few years for a new roof, replacement gutters, and new carpeting have stretched them to the limit.
“Given the instability, it’s been difficult to keep to any plan or budget,” says Diane. Unfortunately, the couple has used their credit cards to make up for cash shortfalls, as they have no emergency fund. They do have $55,000 in investments, $1,500 in a savings account, and $2,000 in a checking account.
To make the financial adjustment, Whitney initially took consulting jobs all around the country to keep money coming in. But the frequent travel and long stays away proved too high a price to pay for the overall good of the family. Now, the couple has become more conscious of spending, like not going crazy on the children’s birthday parties. They have also trimmed expenses on swimming and baseball lessons, acting classes, and lawn maintenance.
Another big move the Williamses made this year was to establish a business. This will allow Whitney to deduct business expenses and pay taxes quarterly. He also has plans to expand beyond computer consulting to include engineer-training programs. “As we put more time and resources into the business, it could grow to something down the road that I would join him in, even if only part time,” says Diane.
So far, the children haven’t noticed the change in their financial situation, but Diane and Whitney know that they need a plan to get back to the good old days. Says Diane, “We want to continue building for retirement; send our children to college; be ready for emergencies; and, most importantly, be debt free in five years.”
THE ADVICE
To help Diane and Whitney Williams find answers to their financial situation, BLACK ENTERPRISE asked Kathy Williams, president of Williams Financial Services Group in Oklahoma City, Oklahoma, ask_kathywilliams@hotmail.com, to consult with