When Linley Paske decided to switch from her bank to Florida Commerce Credit Union after being approved for a car loan, she never thought the new relationship would be akin to appearing on a reality television show.
The Paske family was one of seven families selected to participate in the $309 million credit union’s weLiveFIT! challenge launched in March. The family that does the best at improving their credit scores, reducing debt and increasing their savings at the end of the contest in December will receive $10,000. More than 100 families applied to enter the financial challenge.
“As we came into the competition, we had been sort of putting our head in the sand,” Paske said. “The competition has brought some issues to light. The attention we’ve paid to our finances has changed dramatically.”
Prior to coming to Florida Commerce in Tallahassee, Linley’s husband, David. worked as a commercial real estate appraiser earning a “great income” until the real estate market went belly up. To continue to make ends meet, the couple admittedly made a series of bad decisions that led to relying on their parents and credit cards to keep afloat. With just one car, the Paskes said they spent more than two hours each day dropping each other off at work and taking their sons, Peyton, 3, and Palmer, 1, to two different day care centers.
While the Paskes had an annual household income of $87,000, they had amassed more than $63,000 in debt, not including their mortgage, according to the family’s blog page on weLiveFitchallege.com. At the start of the contest, their savings account had a paltry $5 in it, their monthly net cash flow was $116 and their respective credit scores were 489 and 469.
“We have gotten rid of the fat in our lives,” Linley said. “At the beginning of the competition it was embarrassing to have our name out there. But it’s like checks and balances. We sort of have community accountability for our actions.”
For starters, the Paskes paid off a debt to the IRS, got a home equity loan from Florida Commerce to consolidate their debts and paid down their credit card debt. Linley, a self-described gift giver, cut way back on baby shower and wedding gifts and has put an end to biweekly pedicures. She picked up some extra cash photographing families, children and weddings. The family also earned $353 from a garage sale, which they used toward bills.
David stays at $30 a night hotels when he travels to Atlanta for his appraisal classes. Rather than eat out, he packs a cooler with milk, cereal and cold cuts. Instead of the usual beach trip this summer that would include renting a condo and meals at restaurants, the family traveled to Linley’s parents’ cabin in North Georgia where they fished, hiked and cooked meals there.
There have been a few setbacks. Linley admitted she was “irritated” when she learned that David paid a $60 fee to enter a fishing tournament. Her mood softened when he came home with the $500 prize for catching the winning flounder. Linley said she “fell off the wagon” at the grocery store by not bringing coupons or paying attention to sale items.
The Paskes’ situation appears to be turning around. Linley recently started a forensic engineering job that provided her with a company car. David is nearing the end of completing courses for his Member of the Appraisal Institute designation, which could open up more career possibilities. Signing on to online banking has helped them keep track of spending.
“Without the credit union, we would not have known where to start,” Linley said. “They have done an incredible job of taking us from a place where we didn’t have any direction to giving us the tools to go in another direction.”
Each of the seven families in the weLiveFIT challenge is assigned financial coaches who meet with them on a regular basis to offer suggestions and track their progress. Financial service officers and branch managers make up the team of 14 coaches who have been “very positive motivators” and “don’t harp on the things we do wrong,” Linley said.
For Florida Commerce, it was important to have a diversity of families participating in the challenge, said Samantha Strickland, vice president of growth and brand management. They range from a Florida State University professor to a single mother struggling to make ends meet. It surprised people that some of the participants had high incomes and were homeowners, she added.
“When we first came out the gate, there was a bit of a backlash because of the poor financial choices some of them had made,” Strickland recalled. “We wanted to show that these are not bad people. A lot of them are professionals, some had great credit scores. We’re trying to send the message that things can happen.”
This is the first time Florida Commerce has run the contest. The idea grew out of the credit union’s year-old Financially Independent Today or iLiveFIT! program that offers a free personal financial assessment, a prescription plan and bonus items such as gift cards and points off a loan for those who reach certain levels of financial fitness. Strickland said the program was so successful the credit union decided to expand it to include the weLiveFIT challenge.
The contest has received so much buzz that legislators and a Florida supreme court judge recently told some of the credit union’s staff to let them know they had been keeping track. Each of the families has their own page on the weLiveFitchallenge.com Web site complete with a blog, videos and links to their Facebook pages. As a result of the challenge, Florida Commerce is set to experience a 5% increase in membership this year, the credit union said.
Strickland said the tone has certainly shifted within the community, with many followers now rooting for the families. What helped was reaching out to the local media before the contest started, she explained. The economic downturn, unfortunately, provided a timely hook for the challenge, prompting a strong response from television and publications to cover the competition. Florida Commerce President/CEO Cecilia Homison appears on local TV shows each week, while Strickland provides radio updates.
Looking ahead, the CU plans to run the challenge again in 2010 as well as a similar one for small business owners.
Linley was skeptical about having to reveal her intimate financial details with the world, but now even she is amazed at how much she is willing to share.
“At this point, we have stopped caring what other people think and have started caring about our future and the lessons we will leave with our boys. Is it that we put on a good show, drove a fancy car, ran with the Jones’ and everyone thought we were rich? And then in reality we leave our boys with debt and poor personal finance skills? No, I choose to be transparent–judgment or not–and learn how to live well within our means by making better decisions based on fact and not fiction,” Linley wrote in one of her blog entries.
—msamaad@cutimes.com