Stranger Sends an $8,000 Check : With Gift, Single Mom Pays Off Debts, Starts College Fund for Son : A Matter of Choices

The Money Make-Over feature was inaugurated with The Times’ Wall Street, California pages last year with the idea that real-life experience would be a powerful teacher, and that the professional advice offered in each case could benefit the public as much as the individual or couple directly involved.

Make-Over subjects have been a diverse group facing varied challenges. For some, it was overspending or unrealistic goals or career setbacks or family situations. For others, it was an investing style that was too risky or too cautious or not diversified.

With today’s end-of-year report, The Times revisits five Money Make-Over subjects to see how they responded to financial planners’ advice and whether they profited from it.

The Coopers and Rhoni Smith faced significant debts but were fortunate enough to have fate come to their aid. Jackie Motobo and couple Dan Robertson and Steve Schullo were diligent savers whose portfolios needed a few adjustments, and who feel they are better off today for having taken some of their planners’ suggestions. For Sydney Kamlager, the problem was a lack of discipline, but she now has a better idea of where her money is going.

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When Rhoni Smith decided to participate in a Money Make-Over, she figured it would have an effect on her finances. She never imagined how much.

A few months after the article appeared in August, Smith, 28, got a letter in the mail with a sizable check from a benefactor who wishes to remain anonymous. “Everything was going along and then this angel showed up,” Smith said. “A wonderful woman sent me $8,000.”

Smith is a single mom who spent several months on welfare after the birth of her son three years ago.

Last summer, she was working in a full-time temporary job as a data specialist at UCLA making $31,800 a year. She had by that time made a remarkable effort to pay off several thousand dollars of credit card debt incurred while she was unemployed, but she still had several hundred dollars to go on that, and she owed $3,800 in student loans. She’d begun saving through that job for retirement but wanted more advice on retirement-saving strategies. Her No. 1 goal, however, was to save for a down payment for a house, and her No. 2 goal was to start a college fund for her son, Baraka, now 3.

Fee-only financial planner Kathleen Stepp of Overland Park, Kan., told Smith in August that her first step should be to pay off all her personal debt and to accelerate her payments on her student loans. In regard to saving for a home, Stepp advised putting money every month toward that into a short-term bond mutual fund--an investment that would give Smith decent returns with relatively little risk.

Smith was advised to start saving as soon as possible for Baraka’s education, with monthly contributions for that purpose going into an international stock mutual fund in hopes of achieving long-term growth.

Smith acted on the advice, using the gift to completely pay off all her credit cards and to pay off a portion of her student loan debt. She also took care of smaller obligations such as a 4-year-old parking ticket and money she owed her mother.

With $1,000 of the check from her benefactor, Smith opened an account with Janus Worldwide Fund (five-year average annual return: 21.1%; [800] 525-8983). Every month she deposits $150 into it--$25 a month more than the planner had suggested. She used the remainder of the money to buy a computer.

This fall, Smith got a new job as an executive assistant with a film company. The position is full time and pays slightly more than her former one. Through the job Smith also has full dental and optical coverage, which she didn’t have before, for herself and her son.

“I learned that being rigorous in how I manage my money--treating my finances like a business--I and my son have everything we need,” Smith says.

To participate in Money Make-Over, send your name, age, phone number, income, assets and financial goals to Money Make-Over, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. Questions or comments can be left at (213) 237-7288.