This year has been tough for almost everyone. Belts are tighter and wallets are opening less often. Finances are strained as paychecks have been cut and jobs eliminated. Black Enterprise reached out to all 11 of last year’s Financial Fitness contestwinners to see how they fared. Despite the rocky economy, many of last year’s winners have done fairly well. One winner managed to double his emergency savings and is preparing to purchase his first home. Another paid down high-interest credit card debt. The third has learned to say no to loans to family members.
MAY 2008 WINNER | PARAISIA WINSTON
“Law school was a big financial gamble,†says Paraisia Winston. She’s not sure yet whether she’s won or lost. With graduation now behind her, she’s left with the fallout–some $203,000 in student loans.
She was counting on a $145,000 salaried job at a law firm to be her get-out-of-debt-free card, but the offer was rescinded because of cutbacks. So she cobbled together part-time jobs and student loans to get by. Fortunately, last year she got a summer job paying $45,000 working as an associate in a law firm. That post saved her. Winston got serious about paying down her credit card debt and reduced it from $20,000 to $4,000. She called her creditors and told them the minimum payments of $600 a month she was paying on her three cards was too high. She got breathing room with a reduction to $222. By simply asking, she was also able to get her interest rate lowered from 24% to 9%. Winston, who is on a payment plan, closed two of the accounts; she now has only one active credit card, and that has a zero balance. She also paid off her car loan. “I’m now living a cash-only lifestyle,†says Winston, who graduated in May.
The 26-year-old made other big decisions. She left Chicago in the fall to take a job in Denver as a law clerk for a federal district judge. She now earns a base federal salary of $70,000.
Winston has second thoughts about the condo she purchased before starting law school. “I wasn’t quite ready for everything that comes with homeownership, such as taxes and repairs. It was too much of my budget.†Now that she lives in Denver, she rents out the condo, which is in Chicago. Unfortunately the tenant’s $1,000 rent covers only part of the mortgage; Winston is responsible for the remaining $600.