Women who made their money work

By MP Dunleavey

Editor's note: Join columnist MP Dunleavey and a group of women as they seek to strip away the myths around money, liberate themselves from debt and find financial sanity. Follow the quest of the Women in Red every other Wednesday in Dunleavey's column on MSN Money.

What does it mean to be fiscally fit?

As anyone who has lost weight -- and gained a nice set of abs -- can tell you, achieving your goals is not a one-time event. It's a lifetime proposition.

This is what the hard-working Women in Red are facing as they take stock of their finances in our semiannual exercise in accountability.

Have they paid off all their debts? Are they paragons of fiscal perfection?

Not lately, no. Nonetheless, three of the founding members of the WIR have realized they are ready for a graduation of sorts. Although perhaps "commencement" is a better word.

As I learned from the Class of '07, the most important criteria for being fiscally fit isn't having every single decimal point in place but rather attaining that crucial sense of control over your money and your life -- and recognizing that although you still have financial challenges to meet, you now have the strength to handle them.

Meet this spring's grads

Carole: When she joined the WIR, Carole's main goal was to save enough money to buy an apartment in New York. Overall, including the equity in her new home, she increased her net worth by more than $27,000, the second-highest of anyone in the group.

Just after Valentine's Day, Carole closed on her downtown studio. Way better than a box of chocolates, wouldn't you say?

Granted, her finances need to recuperate a bit. Carole's credit card has a $5,000 balance from miscellaneous moving expenses, and, like most new homeowners, she now has a nice big mortgage.

But she showed her true WIR grit and restored her retirement contributions (after I nudged her a little), which she had reduced to $50 per paycheck while she was saving for her down payment. She bumped them back to $300 per paycheck. Give that girl a summa cum laude for financial foresight.

She also kept $14,000 in her savings. When I asked her why she didn't use that to pay off the Visa account, she explained that she was feeling the need for a greater cushion "in case of emergencies." But she is expecting a bonus at work this summer and a tax refund, which she plans to put toward that credit card balance.

She'd better, or we'll repossess her cap and gown.

Carole	Spring '06	Fall '06	Spring '07	$ Chg. *	% Chg. *
Consumer debt	$ --	$ --	$ 5,000	$ 5,000	--
Education debt	$ --	$ --	$ --	$ --	--
Retirement savings	$ 109,450	$ 110,000	$ 111,500	$ 2,050	1.9%
Other savings	$ 40,000	$ 60,000	$ 14,000	$ (26,000)	-65.0%
Home equity	$ --	$ --	$ 56,000	$ 56,000	--
Net worth	$ 149,450	$ 170,000	$ 176,500	$ 27,050	18.1%
* Since spring 2006

Beth: It's a double graduation for Bethie, who just completed her degree and passed her exams to become a licensed massage therapist -- her dream come true.

Beth has been lucky enough to land a full-time job at a nearby spa, where her starting salary is $30,000-plus a year (and where she gets great skin-care tips she shares with the group, an invaluable perk).

Though that's about half what she was making at the Bureau of Land Management, she's confident her new profession has the potential for steady income growth.

Beth is also breathing easier because she and her husband made a bold move to pay off her student loans and their credit card debt. They looked at the substantial equity they have in their home and decided to take out a $35,000 home-equity loan, which consolidated their debts but still left about half their property's value intact.

As a result, her net worth declined from a year ago, but only by $6,000, which represents the investment she made in her future as a massage therapist. It was a difficult decision but a good one, Beth feels. You can read about it here.

It's that sense of being in control that has led Beth to feel she is ready to become a WIR alumna. She has accomplished everything she wanted when she joined some two years ago, from paying off their Mazda this past January to setting up a will to getting more financially in sync with her husband.

"It's not like we're living in a castle and dining at Wolfgang Puck's," she says. "But we have control over whatever those issues were that got us into the pickle we were in."

Beth	Spring '06	Fall '06	Spring '07	$ Chg. *	% Chg. *
Consumer debt	$ 11,850	$ 13,427	$ 13,427	$ 1,577	13.3%
Education debt	$ --	$ --	$ --	$ --	--
Retirement savings	$ 70,252	$ 70,990	$ 77,810	$ 7,558	10.8%
Other savings	$ --	$ --	$ --	$ --	--
Home equity	$ 124,000	$ 136,500	$ 112,000	$ (12,000)	-9.7%
Net worth	$ 182,402	$ 194,063	$ 176,383	$ (6,019)	-3.3%
* Since spring 2006

Stephanie: When Steph joined the WIR she was "desperate and in despair," as she describes it. With more than $30,000 in credit card, student loan, car loan and even furniture debt -- and earning just a bit more than that per year -- she was convinced her life was a financial train wreck.

But with a combination of elbow grease, ambition, overtime at work and more than a few, um, feisty discussions with her husband, in just two years Stephanie has mustered all her financial strength and is the No. 1 saver of the group (unaided by home equity).

She got two raises and a major promotion to the top of her department, where she now earns close to $70,000 a year, including commissions. She hasn't splurged on a new lifestyle, instead focusing on saving (with an occasional shopping spree and one swanky trip to Jamaica for therapeutic purposes).

Stephanie	Spring '06	Fall '06	Spring '07	$ Chg. *	% Chg. *
Consumer debt	$ 12,000	$ 9,180	$ 6,000	$ (6,000)	-50.0%
Education debt	$ 10,850	$ 10,075	$ 9,000	$ (1,850)	-17.1%
Retirement savings	$ 9,378	$ 10,903	$ 12,540	$ 3,162	33.7%
Other savings	$ 2,000	$ 3,800	$ 9,800	$ 7,800	390.0%
Home equity	$ --	$ --	$ --	$ --	--
Net worth	$ (11,472)	$ (4,552)	$ 7,340	$ 18,812	--
* Since spring 2006

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