Getting back on track.

Author:Brown, Carolyn M.
Position:Family financial planning - 1993 Money Management Guide - Cover Story

It was just 23 days after the 1989 San Francisco earthquake when Mary and Calvin Ransom moved into their first home on Oakland's east side. In fact, "we rushed over to the house a few weeks early to make sure there wasn't any extensive damage," Calvin recalls. Who could blame them, since their new neighborhood was roughly 15 miles from the Bay Bridge, whose collapsed upper deck, flashed on TV screens nationwide, had become a dramatic image of the earthquake's devastation.

The three-bedroom bungalow survived the quake, all right. But taking a look at the Ransom's finances, it's clear that their worries are hardly over: the house itself has them all shook up. Since they unpacked, it has been a virtual "money pit," eating up $15,000 in extensive renovations. Even so, the couple expects to spend another $8,000 on additional upgrades, including a new roof "We believe that the improvements will eventually make the home more salable," explains Mary.

Ordinarily, such home repairs might indeed be a smart move on the Ransoms' part, especially since both have backgrounds in architecture and home renovation. And if all

The ransom family must goes as planned, once they've fastened the last bolt, the Ransoms, both 40, estimate that the alterations will have vaulted the home's value to $169,000, nearly 50% more than their initial investment.

Play cacth-up in the race Frankly, though, the cost of remodeling has become a major financial strain. For one thing, the Ransoms and their two children are living off one paycheck. Calvin, who works in the Architectural Services Division of the City of Oakland's Office of Public Works,

For financial security. has a salary of $51,383. After the birth of the Ransoms' second child, Amadi, in 1989, Mary left her design position with the city to work full-time at ARC-3 Consultants, a drafting and design firm she set up in 1985. Unfortunately, business for her one-person practice, specializing in home remodeling and renovations, has earned only $5,000 to $13,000 annually.

Such circumstances make for a frugal lifestyle: Calvin spends modestly on his wardrobe; they can't afford to frequent pricey restaurants; and vacations outside the state are a rarity. Despite the sacrifices,the Ransoms are satisfied with their decision that Mary should stay at home, although it cut their comfortable $65,000 combined income (in 1987) by 15%. "I plan to spend as much time as I can with my children until they enter school full-time," explains Mary, who enjoys spending time with Asha, her five-year-old daughter, and three-year-old son, Amadi.

A close-knit bunch, the Ransoms eat dinner together every night - a true feat for today's modern family - precisely at six o'clock. Playtime is always a family affair, as are backyard cook-outs and camping trips. The downside to such parental bliss is that devoting most of her time to the kids has given Mary little time to nurture her business. ARC-draws 3 about 10 projects a year, so unless the Ransoms are willing to put more time into growing their fledgling firm,they will continue to be in a tight squeeze. At their age, and with two children, Calvin and Mary must play financial catch-up - and quickly.

They've already had one financial false start. Shortly after they were married back in 1985, the couple purchased two...

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