How six New Orleans residents made their money work for them.

by Denise Trowbridge, New Orleans CityLife, September 2004

Debt free — finally!
Five years ago, Rachel Carner had $12,000 in credit card and student loan debt and wasn’t making any progress paying it off. “My debt wasn’t huge, but I just wasn’t making any headway,” Carner, a publicist at Pelican Publishing Company in Gretna, says.

She also had a realization — “A great job wasn’t necessarily around the corner and I couldn’t count on getting married,” Carner says. So rather than wait, she decided to dive right in and dedicate whatever resources she currently had to becoming debt free.

She enrolled in a payment program with a local nonprofit credit counseling organization that negotiated lower interest rates on her behalf, dropping the rate on her credit cards to as low as two percent. Then, they automatically deducted $275 a month from her checking account to pay the balance.

At first, $275 seemed like a fortune. “But, I just sucked it up and concentrated on paying it off,” she says, noting that she did have to cut a few corners. “I didn’t take a vacation unless I could stay with a friend or family member — no resort islands and no cruises.”

When Carner checked her progress last summer, “I had one card paid off, the second down to $2000 and only $1500 left on my student loan,” she says. “So I decided to speed up the process.”

Carner took on a second job for nine months — working one night each week at a local Barnes & Noble bookstore — and dedicated the extra income to paying off debt.

On June 30, Carner sent in her last payment and became officially debt free. Now, the money she used to spend on debt goes into a savings account earmarked for a down payment on her first home. Living debt free and being on the savings track “feels really good,” Carner says. “I’m off the grid and no one owns me but me now. Of course, I could really use a vacation.”

Your Money or Your Life
Carla Robertson and Robert Shaw, both science teachers at Louise S. McGehee school, don’t claim to be financial wizards.

But in the past four years, the couple has managed to cut their mortgage debt in half, purchase a new car with cash, save 40 percent of their earnings and more than quintuple the balance of their savings account.

Their secret? A book — “Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence” by Joseph Dominguez and Vicki Robin — changed the way they thought about money. “I read it in 1999 and it spoke to me,” Robertson says. “It’s not a budgeting book. It’s about looking at your spending, paying attention to your money habits and changing them so that your spending aligns with your values.”

Once Robertson and Shaw decided to follow the book’s nine step program for financial fitness, they had spectacular results, but only after a rocky start. “My husband was less than enthusiastic about it at first. We tried it for a month and it didn’t stick,” she says. A year later, they tried again. “All of a sudden it was empowering to see how much money was coming in and going out. For the first time in our lives, we started paying attention to our income and our net worth.”

And — unlike many people on a strict budget — they never felt like they had to give up anything. Since starting the program, they have gone on three long vacations and they still go out to eat — although, Robertson admits, not as often. “We certainly aren’t sitting at home knitting and eating beans and rice every night,” she says. “It was painless and it was just amazing to me what we were able to do without even really trying.”

Most of all, Robertson says, they have learned the secret to financial security. “It isn’t about a magic interest rate or the stock market,” she says. “It’s just a matter of paying attention.”

Working for Wealth
Lorraine Elliot is cleaning her way to riches. She works three jobs — as a housekeeper with the International House Hotel and the Marriott, as well as cleaning house for a busy New Orleans couple. Her hard work has paid off, thanks in part to her employers’ unique benefits programs.

Most of the money she earns working for the Marriott is either invested through the hotel’s stock purchasing plan or socked away in her savings account and company-sponsored retirement plan. Her goal is simple: “I’m just trying to invest my money and have it grow,” Elliot says.

And Elliot’s keen eye for investment opportunities will translate into her very own home in November, thanks to the International House — the company partners with the New Orleans Neighborhood Development Foundation to help employees purchase their first home. “My first day working there I knew I wanted to buy a home, but I didn’t know how,” she says. “When I saw a flyer for the program I decided to go for it.”

Through the program, Elliot has taken financial fitness courses covering credit, mortgages and escrow accounts, building equity and all of the other things that go along with real estate. When she is ready to buy, the International House will throw in an extra bonus — up to $1,000 to defray her closing costs.

Elliot has almost finished the program and is shopping for a home. “Wherever I go, I look at houses and I know exactly what I want,” she says. “Three bedrooms and not too outrageous. I don’t want anything with more rooms than people can use.”

While she is plenty money-savvy on her own, Elliot is thankful for the opportunities her employers have given her because she knows a lot of people aren’t as lucky. Most employers, she says, don’t offer any benefits let alone help employees invest and buy homes. “These jobs have really opened a lot of doors for me,” she says.

The unconventional road to retirement
“The big questions in retirement are how do you put food on the table and a roof over your head, and what happens if you can’t take care of yourself down the road?” says Annie Schroeder. Now that she and her husband, Doug, are in their 50s, she says, answering those questions has become a high priority. “Staring down the barrel of retirement, we started to wonder how we will manage."

The couple has two houses and two boats — but they have no 401(k) and no retirement savings. “We have always lived old-fashioned hippie lives. No 401(k)s, no money and never having a job long enough to save anything,” Annie says with a laugh. “We’ve both roller coastered between having a lot and having nothing.”

The couple, who have been married a little more than one year, had to put on their thinking caps to figure out how they would secure their future with limited time and resources. “The goal now is to even things out,” Annie says. “I believe in real estate and I think it holds the key to our future.”

So the Schroeders put their two houses —  a double on Constance Street and a multi-family rental property on Amelia Street— up for sale. They plan to use the proceeds to pay off their debt and purchase a home where they can retire comfortably as well as collect a rental income. “That way we can use the rent to pay part of the mortgage, and once that is paid, we can use that income to pay some of our expenses once we retire.”

For Annie, a public relations officer for the New Orleans Museum of Art, and Doug, a designer with Tim Trapolin Architects, real estate is “moving us slowly toward what we want. Our goal is to have a house that is paid for,” she says. “Then any money we do have left we can use to live a pretty nice life.”