Breaking Bad Habits

To achieve financial security, this single mother has to curb her indiscriminate spending and stop abusing money

Don’t ask Jennifer Bogar how many pairs of shoes she owns. “There are at least 30 hanging on the closet door alone. I can’t even think about how many are stacked in boxes,” says the 30-year-old self-proclaimed slave to fashion — and debt. Bogar has accumulated $11,000 in credit card debt from charging clothes, a computer, ceramic kitchen tile, and furniture for her two-bedroom townhouse in Irvington, New Jersey. “It was my first house. I wanted to have it look nice,” says Bogar, who purchased the home for $100,000. “In retrospect, I should have waited.” Then there’s the travel itch she is compelled to scratch. Between May and June, she flew to Miami, Atlanta, and Puerto Rico.

Two years ago, Bogar, a single mother of a 5-year-old son, Aaron, took out an $18,000 home equity line of credit to pay off her credit card bills and to get her debt under control. “If I’m going to accomplish anything, I have to get disciplined,” she says. She is also determined to set some hard and fast financial goals.

Although she recently quit a $50,000-a-year job and took an $8,000 pay cut to work as a paralegal, Bogar has increased the value of her 401(k) contributions, from $2,000 to nearly $9,000. “I’ve seen what can happen when you put money away,” says Bogar, who plans to rollover her 401(k) to her new employer’s plan. She also intends to continue saving for Aaron’s college education, investing $50 a month into a 529 college savings plan. Bogar says she always wanted to pursue a career in law but had put her dreams on hold to raise her son.

She decided to test the waters as a paralegal before jumping into law school. She took out a $10,000 personal loan to finance a one-year paralegal program and is planning to take the LSAT. She wants to attend law school at night in the fall of 2007 and is confident she will command a salary of at least $70,000 as a corporate lawyer.

Bogar is considering selling real estate as part of her plan to reduce her debt. She has a real estate license but has only sold property sporadically. Her mother, a real estate agent, has been encouraging her to get back into it and possibly form a partnership.

As she attempts to reconstruct her financial life, Bogar has learned some valuable lessons. “Credit cards are not the answer for me,” she concedes. “They can only be for emergencies. What I’m paying for credit cards could be going into an interest-bearing account.” Fortunately, she has been vigilant about paying her bills on time and, as a result, has maintained a good credit rating. Bogar is now ready to take charge of her finances: “I know what I need to do. … I see the error of my ways.”

The Advice
BLACK ENTERPRISE asked Gwendolyn Kirkland, a certified financial planner with Kirkland, Turnbo & Associates in Matteson, Illinois, to review Bogar’s financial situation. Kirkland commends Bogar for being a property owner and having

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