Little time, a lot of debt

Tara McCarthy sits with Graham and Tracy Benson in their Bloomington living room. Tracy is shuffling through papers. Graham, bouncing 8-month-old Capri, wants to know how long he'll need his second job handling packages for FedEx. He works there during weekday evenings after finishing his copywriting day job.

"I'd say it's a two-and-a-half to three-year gig," responds McCarthy.

Graham, 42, who says he's exhausted by his schedule and misses his family, clearly is disappointed. "I hope it's not that long," he says. "I will die."

McCarthy, who runs Financial Rehabilitation Inc. in Minneapolis, tries to cheer him up. "You saved your household from going into collections and collections is brutal," she says, telling the Bensons they should be proud of what they've managed to accomplish in one year. About $4,000 in medical debt is history, as are a number of small credit card balances. The total credit card balance has dropped $3,500 -- to $28,500.

Reducing debt and paying on time has improved the Bensons' credit scores from the mid-600s this spring to 718 for Tracy and 698 for Graham last time Tracy checked. She shopped around and transferred all of their credit card debt to cards with 0 percent, 6 percent, and 8 percent interest rates, a great improvement from the double-digit rates they were paying last year.

But it's still hard for the couple, who see progress but feel the toll it's taking on quality of life. "It has been very hard on our relationship," Tracy, 43, writes in an e-mail -- the easiest way for her and Graham to communicate some days. "We have very little time and money and energy for each other."Tracy seems to get unhappy with me about the very job she was unhappy with me for not having," he writes. He likens getting a second job to stopping up a hole in a failing dike with his finger: "One solution created a different set of problems."

McCarthy says the couple must find time to work on their relationship. Otherwise, "the financial issues end up being tools for economic warfare and you end up beating each other up in divorce court."

What if he watches the kids in the evening and Tracy works, he asks? It's a scenario Tracy is reluctant to consider, wanting to resume her arts education career, not work handling packages. But they need to consider all of the options, and McCarthy suggests they agree to a meeting in a year to talk about who works the evening job.

Tracy has tried to bring in extra income. This summer, she started selling muffins, scones, and her favorite burnt-sugar cake at the Bloomington Farmers Market. The new business is in the black this week and Tracy figures she'll earn about $800 by season's end.

She also continues to squeeze in shifts at a health-club day care when she's not watching the younger girls or taking the kids to or from school. Two are at home, two are in private school, two are in a charter school and one is in college.

Looking ahead, McCarthy tells them to make a plan for any tax-refund money they expect in 2008. They figure they'll use it pay a small amount toward daughter Tasha's college and the roughly $3,000 they owe for private school. Any remaining money will go toward debt.

She also wants Tracy to look into streamlining their 10.75 percent, adjustable rate, interest-only home equity loan, a process that fixes the interest rate for a lesser fee than a refinance.

Says McCarthy: "Now it's steady as she goes."