WAY, Wash. — The gut-wrenching financial crisis of
2008 and the Great Recession remain fresh memories for
Seattle-area couple Meg and Jesse Dutcher.
Dutcher, 30, and Jesse Dutcher, 33, married in 2005, one
of the go-go years, and they both had jobs in the
booming construction sector, making a combined $68,000 a
year. They used their credit card to make down payments
on a truck and a vacation-club membership.
in rapid succession, banks crumbled and crashed, the
stock market plummeted and millions of jobs evaporated.
Construction work dried up. Just like that, the Dutchers
years since have been a struggle. Although the Dutchers
made several good decisions, their pre-recession debts
haunt them. Their household budget was frustrating and
tyrannical. They were sometimes puzzled where the money
went, and they cut so many expenses to make ends meet
that they felt like they were living in a financial
of the things that I stressed out about the most,"
Meg Dutcher said, "was money."
after working with a financial planner, the Dutchers are
learning how modest changes in their household accounts,
spending and financial approach can lead to big
benefits, both immediately and for years to come.
can make it better without changing a lot," Jesse
Dutcher said. "For me, it was huge. It takes a lot
of the stress out."
the crash, the Dutchers scrambled for jobs. Jesse
Dutcher signed on with a series of contractors, only to
get laid off again. Meg Dutcher took a job at Starbucks.
2010, Jesse Dutcher was accepted by an
electrician-apprenticeship program, which he expects to
complete this summer. His current pay is about $36 an
hour, but the hours are variable, and he works less when
he takes classes. His annual income now ranges between
$45,000 and $55,000 a year.
pay down debt and save money, the couple in 2011 moved
in with Jesse Dutcher’s parents. They saved about
$10,000, more than enough to make a down payment a year
later on their home, which they purchased in a short
sale for $128,500. Last year the county pegged the home’s
assessed value at $182,000. Zillow estimates its current
market value at $224,000.
the way, the Dutchers had two children, now 4 and 2, and
the couple agreed that Meg should stay home and care for
them. She occasionally earns money with odd jobs and
temporary food-service work.
the couple continued to struggle with their household
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weighed on them. They owe about $119,600 on their home,
and when it needed a new roof, the couple financed it by
getting a $10,000 deferred, no-interest loan through the
city of Federal Way’s Emergency Housing Repair
Program, which assists low- and moderate-income
homeowners with emergency repairs.
distressing are the couple’s old credit-card debts,
which are now rolled into an outstanding balance of
$12,800 in a home-equity line of credit at a credit
the major breadwinner, Jesse Dutcher’s variable income
made it difficult for the couple to get ahead. During
the down times, they would defer maintenance and cinch
their household budget even tighter.
planner Bobby Reamer was paired with the Dutchers by the
local chapter of the Financial Planning Association.
budget was ultratight," Reamer said. He looked for
ways to create some wiggle room so the Dutchers wouldn’t
feel completely boxed in by their household finances.
focused on the couple’s fixed monthly expenses to see
if the Dutchers could cut some recurring costs. For
starters, he suggested combining their mortgage and
home-equity line of credit into a single, refinanced
debt, potentially saving them between $100 and $200 a
month in interest and insurance.
also showed the Dutchers how to take much of the mystery
and emotional stress out of personal finance by
reorganizing their household accounts.
many families, the Dutchers put all their earnings into
a single account and use it to pay every bill.
it was hard to track the numerous entries, and the
system pitted Meg and Jesse against each other when it
came to buying items for themselves.
suggested setting up one household account for recurring
monthly bills and a separate account for yearly bills
and surprises, such as annual insurance premiums and
unexpected repairs. The annual account could backstop
the monthly account.
also advised the Dutchers to allocate some money every
month that each of them could spend on personal items,
ending their competition over the same stash of
examined the couple’s long-term risks, including their
estate planning and insurance. He discovered, for
example, that Jesse Dutcher has a 10-year, $250,000
life-insurance policy — not enough for a primary
breadwinner with young children.
a little research, Reamer found a 20-year, $500,000
life-insurance policy with a similar annual premium of
Dutchers are moving ahead with Reamer’s
recommendations. They are also looking forward to this
summer, when Jesse Dutcher graduates from his
apprenticeship program and attains a higher pay grade
— $42 an hour — with more predictable hours.
expect to see more money coming into the household. When
that happens, the Dutchers say they will have more
confidence in knowing what to do with it.
feeling less stressed," Meg Dutcher said. "Now
I see I can do something about it."