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How to become more financially stable

A financial counselor for Evergreen Credit Union walks through the steps to take to get out of debt and grow a savings account.

PORTLAND, Maine — Nearly everyone experiences financial worries from time to time, but when they are a constant factor in your life, it can be devastating to your productivity, your health and your mental well being.  

The 35-day government shutdown which began in Dec. 22, 2018 through Jan 25, 2019, emphasized a staggering fact: 78% of US workers live paycheck to paycheck, according to a 2017 report by employment website CareerBuilder. It’s not merely those earning low wages who are struggling, though - the survey reports that nearly 10% of Americans with salaries of $100,000 or more also live paycheck to paycheck. 

It is effectively managing your economic life and understanding the concept encompasses many factors such as:

• Keeping spending within one’s means

• Establishing a $1,000 emergency fund (69% of Americans have less than $1,000 in savings – GoBankingRates.com) 

• Knowing where to access the information and the tools necessary to make good financial decisions 

• Making a plan 

The first step we recommend is to determine where your money goes each month. What comes in and what goes out. You can calculate this by adding all of your mandatory expenses: Mortgage/rent, utilities, insurance, property taxes, and other household expenses.  

Second: Review previous month’s spending and add all other expenses such as groceries, paper/cleaning supplies, medical expenses, child care and pet care, phone, internet, cable TV/satellite TV, and other regular expenses. 

Third: List all nonessential expenses such as entertainment, donations, shopping, gifts, and others. Add up what you spend for a year in this category and divide by twelve.  

Fourth: Add creditors to a DEBT section. This includes credit cards, equity loans, car payments, student loans, medical bills, etc. You should list the balance owed, the interest rate paid, payment due date, and minimum monthly payment for each. Add the minimum monthly payments for each one. This is what you’ll use to determine your overall monthly financial picture.  

This is your personal Profit & Loss sheet. Is your bottom line a positive number or a negative number? 

NOTE: Most of the people who completed this as part of the Evergreen program, have no idea of what their net gain or net loss was. Those clients with heavy credit card debt had a negative bottom line number. 

Completing this exercise is crucial to help you make better financial decisions. Evergreen Credit Union began a financial wellness program in 2018 to provide its members and local employers with free financial counseling. The program helps participants understand the financial challenges they face and offers tips and tools to take steps to understand and improve their financial wellness.