Striving to recover: after debt and bouts with illness, the Blackman family is rebuilding its financial future. (Family Finances).

AFTER BEING DIAGNOSED WITH CARPAL TUNNEL SYNDROME in 1995, Christine Black. man was no longer able to work. With two of her three children to provide for, Christine not only worried about her health, but how she and husband Antonio would make up for losing her $32,000 annual salary.

The disability coverage of $12,000 a year that Christine received only stretched so far. The couple depleted their savings before running up more than $40,000 in credit card debt in five separate accounts.

It took five surgeries on Christine's hands before she was able to return to work last year. although in a lower-paying position. "It was touch and go for a while," says Antonio, 37, of the seven-year ordeal that almost kept Christine, 39, from ever working again.

After Christine landed a position as a medical assistant, the couple began paying off their debt. With Christine's $24,000 salary and money from an insurance settlement, the Blackmans have retired all but $1,400 of their credit card debt.

"We've climbed over a tremendous mountain and it's a relief," says Antonio, an office administrator who earns $43,000 a year. The climb has left them with only $600 in savings, $2,000 in a money market account, $1,050 in a brokerage account, and $2,800 in bonds. In addition to credit card debt, the Blackmans have a $170,000 mortgage on their three-bedroom home, which recently appraised for $210,000.

Now the Bloomfield, Connecticut, couple is focusing less on the past and more on a promising future. They'd like to help out their 18-year-old daughter, who is now in college, by contributing $2,500 a year toward her tuition and living expenses. They'd also like to begin saving for their 7-year-old son's college education. Their eldest son, who is 20, lives on his own.

Then there's the matter of the couple's retirement. Christine and Antonio are in their late 30s and have saved little for their golden years. Because they've been financially challenged, they have no emergency savings. They're considering buying a multifamily property that could generate rental income. But right now, the Blackmans are seeking the right financial path.

THE ADVICE

To get the Blackman family off to a healthy start, Fitzgerald Miller, a financial consultant with AXA Advisors L.L.C. in New York City, was called in to help.

With the Blackmans' debt under control. Miller estimates that they have $650 of free cash flow monthly. Miller says the good news is that their darkest days are likely behind them. "They have to start saving. Unlike some people, they have already made the adjustment in their head, and they're serious," he says. Since they've shown resiliency by facing hard times and living to tell the tale. "they have something to work with," Miller says. "The future looks good."

* ADD INSURANCE COVERAGE

What most concerns Miller is how well the couple is managing risks. "I don't know much about Carpal Tunnel Syndrome. but if it pops up again, it could set them back and disrupt their long-term plans," he says. For that reason, Christine and Antonio should check with their human resources departments to see if they are maximizing the benefits their companies offer. If so, Miller advises the couple to seek out additional disability insurance.

Antonio's $200,000 life insurance coverage and Christine's own $100,000 policy is not enough to cover their needs. "If something happens to either of them, their plans go out the window, and one possibility could be losing their home," Miller says. He recommends that they increase their insurance to cover their home, their children's education, and loss of employment.

* FOLLOW THE MONEY TRAIL

Miller suggests that the Blackmans document their expenses for 30 days since they really aren't sure where all their money goes. Through a self-analysis, they can determine where they are overspending. Working in the couple's benefit, says Miller, is that with the exception of a 10% tithe to their church and eating out a few times a month, they aren't big spenders. Keeping a record of every penny spent for a month will likely reveal areas where they can improve.

* CREATE AN EMERGENCY FUND

The Blackmans understand how devastating the unexpected can be; they don't want to come up short again. The $2.000 they already have in a money market account should be designated for emergencies. They should try to have a minimum of $9,000 in that account to give them a six-month cushion. Given Christine's history of illness, the couple should save enough to cover a year's worth of expenses.

* MAKE GOOD USE OF CONTEST WINNINGS

With the $2,000 they receive from BE, the couple should take $500 and open an IBA. Christine should roll over the $700 she has from a former employer's 401(k) plan into an IBA and add $500 to it for a total of $1.200. They should place $500 toward a college fund for the youngest child and put the remaining $500 in their emergency fund.

* GET GOING ON RETIREMENT

Although the Blackmans are still young, there's no reason to delay establishing retirement accounts. Setting up vehicles such as a 401(k) and an IRA lowers their income so they can reap tax benefits now. Miller recommends conservative, large-cap growth funds with proven companies. "Christine's illness changes the dynamics of their risk profile," he says. While Miller likes the notion of purchasing multifamily homes, which offer cash potential, doing so in the next couple of years will mean taking on substantial debt. That strategy carries some risk because that debt likely won't vanish before they retire.

* TACKLE THE CHILDREN'S EDUCATION

The Blackmans have a $2,800 savings bond that they should give to their daughter for her first year of school while she explores grants, scholarships, and loans. Miller also advises the Blackmans to set up a college savings plan for their 7-year-old. They can easily afford to contribute $100 a month. Given the time before the money will be needed, Miller suggests growth mutual funds.

Financial Snapshot: Antonio Blackman

HOUSEHOLD INCOME

Gross Income                               $67,000

ASSETS

Market Value of Home                      $210,000
Market Value of Two Cars                    20,000
Home Furnishings                            10,000
Savings Bond                                 2,000
Money Market Account                         2,000
Sharebuilder Account                         1,100
Christine's 401(k) with former employer        700
Savings Account                                500
Checking Account                               100
Total                                     $247,200

LIABILITIES

Mortgage                                  $169,000
Credit Card                                  1,400
Total                                     $170,400

Net Worth                                  $76,800