Numbers don't lie. Every year more bankruptcies are filed and more foreclosures happen and re-happen. The reality is that many of us educate ourselves about money through a process of elimination and it takes us years if not our whole lives to recover. It keeps us out of real homes and our kids out of real schools, and we quiet our very real anger with justifications, denial and desperation.

Here's a story about how financial intelligence can improve the quality of life for a family not much different from yours. We'll call them the Joneses, and hopefully you can keep up with them as they reach financial success.

Mr. Jones is a 37-year-old public school teacher and Mrs. Jones is a 35-year-old homemaker. They have two girls, 4 and 7, two adequate cars and a house to put them all in.

Although Mr. Jones made just over $45,000 a year and Mrs. Jones held down a part-time job bringing in almost $12,000, it was not quite enough to cover their expenses. They were suffering under a $383 per month payment on the minivan, a $1,800 mortgage payment, and credit card debt. They had run up $2,800 on one Visa and $4,300 on another with an additional $1,150 Mastercard and $1,480 on the Discover for a grand total of $9,730.

They desperately wanted to be debt free, retire at age 55, and send those ever-growing little girls to college, but they were just able to scrape up enough to make their monthly payments.

We were able to step in and help.

First, the Joneses had to make a monthly budget including all living expenses, entertainment, debt, and income. They even factored in for those easy-to-forget and ever-increasing taxes. Car registration, income tax, and property tax are just a few to keep in mind.

The Joneses have found that their income tax return of about $2,400 could be returned to them each month by checking with their tax advisor and adjusting their withholdings. That brings in another $200 per month. That, added with the approximate $150 left over in their budget, now equaled a total of $350.

This $350 was divided into two. One half went into an emergency account and some towards the girls' college. The other half was used to help pay down their pesky debt. They converted all minimums on their credit cards to fixed payments until all the debt was paid off. Then they applied the $175 and its minimum payment towards the Mastercard's balance each month until it was completely paid off. This gives them a victory payoff in less than eight months, which frees up a total of $175 plus $25 that can be used toward the Discover card. The new payment for Discover card was then $230 per month ($175 + $25 + Discover card minimum). They continued along this path until Visa #1, Visa #2, and the car were all paid off.

In a matter of less than 36 months, the debt was gone and the Joneses' money began working for them instead of against them. Their budget now focused on the things dearest to them: their family and their children's education.

When three years had passed, the Joneses had nearly $4,000 in their emergency account and were well on their way to saving for half of their little girls' tuition.

That's their story. What's yours? Remember, the reason this works is that we converted revolving debt to fixed and the Joneses took the wise advice not to accumulate any more debt.


Arif is the owner of Total Financial Solutions. Andrew is a administrative assistant with the company.