enough to qualify for a conventional mortgage. Gabriel opened one credit card and two trade lines at rates varying from 9% to 12 %. Those accounts are all reported favorably on his credit report. The Raines’ broker helped facilitate the settlement agreements and also forwarded the payoff letters to the underwriter and the three credit bureaus.
The Advice: Negotiate smartly. Ask the real estate agent to negotiate for the seller to pay the closing costs.
The Action: The couple did not negotiate on the closing costs. They didn’t feel that they needed to because they were able to get a good deal on the purchase price. The house listed for $149,900 and they paid $138,000–a savings of more than $11,000.
The Advice: Increase retirement contributions from 4% to 10%. Put the remaining $1,000 of contest winnings into their emergency fund.
The Action: They met the goal of increasing contributions to their retirement plans to 10%. April didn’t miss the extra money going into her retirement account because she was earning additional income from teaching. Because they needed to furnish their new home, they were not able to build on their emergency fund. However, they plan to do so in the future.
The Advice: Fund the children’s college education. Rather than invest $75 a month in two mutual funds, divert that money to the children’s 529 plan, doubling the savings amount from $75 to $150 each month.
The Action: They are still putting $75 into the children’s college fund because of expenses related to their home purchase; however, they are making it a priority for 2009.
May 2007 Winner: Victoria Reddic
After 33 years, Reddic’s career with MetLife ended in October of last year. Her position as a compliance consultant was relocated to Hartford, Connecticut. Reddic, 53, did not want to leave the city where she had spent most of her life, so she opted for early retirement with severance instead.
“I decided to take my chances with job hunting in St. Louis,â€ says Reddic. While she thought she would quickly obtain a part-time job, work wasn’t too easy to come by. However, Reddic did find a full-time job working as an unemployment insurance consultant for Talx/Equifax in April of this year. She also started in January as a seasonal tax preparer and this summer began working with the city of Moline Acres as an alderwoman. These jobs bring in about $3,000 a month, compared with the $6,000 she was grossing at MetLife.
“I hated to leave MetLife. I had a job that I enjoyed, but moving didn’t make sense for me,â€ says Reddic. Another hurdle Reddic faced was funding college for her daughter, Veronica, a freshman at Northwest Missouri State University. However, things worked out and Veronica received scholarships. For the first year of school, 50% of the $17,000 tuition, room, and board will be paid for by the college and private scholarships. Reddic is paying the balance. “We don’t do loans,â€ says Reddic proudly. Since Reddic has not had to touch the severance she received, that gives her a