Our Stories: How Maria Catalina turned financial education into power.
by Marcia Tabenken | Photo by Jaime Grant
When Maria Catalina talks about her credit-building journey, the notion of “education” comes up often.
Her own financial education began in her native Colombia, where she studied business administration, specializing in finance. When she arrived in the U.S. five years ago, she found a much different financial landscape than the one she’d left behind. “I realized the financial world works differently here. I needed to learn.” With dreams of becoming the first in her family to own a home, she set out to learn how to manage her finances.
First, she consulted with those closest to her, but found a wide range of knowledge and opinions. “If you ask family and friends, each one tells you something different. I decided I wanted to learn from experts.”
She found what she was looking for in NOAH, a Boston Builds Credit partner. NOAH is a community development organization that works to increase access to affordable housing, create social and economic opportunities, and empower Boston residents to be change leaders. By taking classes and collaborating with a financial coach, Maria Catalina gained a new perspective on her finances, built her credit, saved money, and made progress toward her financial goals.
She describes a particular budgeting exercise that had a powerful impact on how she approaches spending: Participants were asked how much money they spent on coffee in one day. They then mapped out their coffee-spending for a week, a month, and a year. Maria Catalina realized, “It was a lot to spend on an item that’s nice to have but not a necessity.”
She began looking at other expenditures in the same way, noting how much she could save by cutting back on small unnecessary items and focusing on larger more important ones.
“Everyone should do this exercise because we all overspend on small items. By realizing how much we spend, we can make the switch to spending on things we really need. Once I did that, I started saving a lot of money.”
Building credit was a key step in Maria Catalina’s financial education. When she started working with financial coach Nathalie Kallab Racimo in 2020, she had no credit history. Together they explored the different credit-building tools to determine her best options. Because she had a savings account with a credit union that partnered with her employer, she was to get an unsecured credit card with a $1,000 limit. Keeping balances low and making payments allowed her to obtain a second credit card and expand her credit history.
“Back in Colombia, I had a bunch of credit cards and I used them a lot,” she said. “Today instead of spending money on small things, I use my credit cards to build credit so that I can save to achieve the big goals,” she explained.
In less than a year, Maria Catalina’s credit score went from 0 to over 700!
That achievement was the culmination of hard work, careful planning, and a new perspective on her finances. And it helped her weather an unexpected job loss last spring when COVID-19 shut down the economy. “During that time, I tried to spend money only on necessities. I kept on track so that I didn’t accumulate a large debt.”