Teacher needs financial education

Gayla Baker teaches special education to troubled young people at a state correctional facility, and she expects her students to be disciplined about their studies and their behavior.

Now she's finding out that she needs quite a bit of discipline herself when it comes to her own finances. The divorced mother of two boys has piled debt upon debt, usually as last-ditch efforts to pay bills. And that has cost her dearly.

"When I am in desperation, I don't make good choices," she admitted.

Baker only recently realized that her credit card debt was four times what she thought it was, and both her car and her car loan were too much for her pocketbook.

But her biggest blunder -- "my greatest embarrassment," she said -- was to fall for the TV advertising hype of CashCall Inc. by taking out a $2,400 loan that carries an interest rate of 99.25%.

"She does have a head-in-the-sand mentality," said Sandra C. Field, a financial planner with Asset Planning Inc. in Los Alamitos.

Field met recently with her to sort out Baker's fiscal fiasco and figure out whether the 38-year-old teacher can reach some of her goals.

Baker, who has studied gang psychology and teaches many gang members, wants to earn a doctorate in education to teach at the university level. She also wants to pay for her sons' schooling, buy the tiny home she's living in from her mother and secure her retirement.

But going back to school to earn a doctorate must be put on the shelf for a decade because it would be too costly, Field said. And to reach any of her financial goals, the planner said, Baker is going to have to adhere to a strict budget, maintain a diligent review of all bills and steadily repay debts.

In two years, Baker might be ready to buy her mother's Los Angeles County house for $250,000, Field said. She's now paying her mother $1,000 a month in rent for the home.

"This could be a 40th birthday present to yourself to say, 'I'm financially sound,' " Field told her.

As a state employee, Baker should have a pension worth $6,808 a month by the time she turns 55, the planner estimated.

Baker takes in $111,000 a year from her full-time job, child support and a part-time night-school gig teaching English to adults. But she has only $200 in savings.