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You don’t have to be a financial statistic

Statistics are interesting numbers. Some people love them, and others think they are a way to twist things to a particular advantage. Even knowing that results can be skewed, I still like to review financial statistics. I use them as conversation starters, an impetus if you will, to encourage people to step back and take a realistic look at where they stand financially.

Here are a few statistics from a recent study that I unfortunately found unsurprising, and quite telling, about the financial condition of many Americans.

  • More than half of American consumers (56 percent) say they are living paycheck to paycheck.
  • 48 percent have experienced financial setbacks in the past three months.
  • 51 percent have less than three months’ worth of emergency expenses in an emergency fund.
  • 25 percent report having no savings at all.
  • Only 54 percent of American adults have life insurance.
  • 30 percent of Americans believe life insurance is only for end-of-life expenses.

How did you feel as you read those numbers? Do any of them reflect your situation? Did you react with relief, or have an immediate justification for why you fall into one or more of these categories?

The good news is that if any of these statistics apply to you, that doesn’t have to remain the case. Here are a few tips that can help you get on a better financial footing.

• Record every penny you spend, including those items you charge, over the next 30 days. Once you have the record of your spending take the time to review over every expenditure and put it in a category. Was it essential, like utilities or rent? Debt reduction? Was it discretionary, like new clothes or eating out? Did any of your dollars go toward investment or savings? How about charitable contributions?

I try to adhere to the 80/10/10 rule as a minimum: expenses, 80 percent; savings or investments, 10 percent; and 10 percent charitable contributions. If necessary, adjust your numbers, perhaps 90/5/5 is the starting point that works for you.

  • Make a list of all your debt, including credit cards, mortgage, automobile loans, zero-interest furniture loans, college loans, etc. Note the current balance, the interest rate and your monthly payments.
  • Review your gross income and the amount of taxes or any other amounts withheld from your paycheck. I don’t advise allowing the IRS to keep your money all year and then simply returning what you overpaid without interest via a tax refund.
  • Make a list of what really matters to you, your non-negotiables.

Now, carefully, thoughtfully and prayerfully, review everything. Ask yourself some questions. Do these expenditures align with what I say really matters, my non-negotiables? How would my life change, for better or worse, if I stopped spending my hard-earned dollars on these discretionary items? Are the items I have listed as essential truly essential? Consider how life insurance could be used to provide for those you love if you were unable to do so.

Now it’s time for the hard work, using your findings to make a change. Perhaps your income falls short of meeting your day-to-day needs. If so carefully consider if it is really a shortfall of income or a case of overspending and living above your means. If you believe you are underpaid, it may be time to have a conversation with your employer or polish your resume. Keep in mind that unless the circumstances are extenuating, it is normally not a good idea to quit your job until you have another one. Only you can make that decision.

Next, I encourage you to develop a budget. I have an Excel spreadsheet I often send to my clients to help them with setting up their budget. Email me if you would like a copy, and I’d be glad to send you one.

I often have heard the phrase “A goal without a plan is just a wish.” If your goal is to stop living paycheck to paycheck, spend less and save more and plan for your financial future, it’s time to stop wishing and enact a plan that works for you. Set aside any embarrassment, and ask for help if you need it. If you do, it could not only change your life, but the lives of those you love.

Written by Kathy Rogers

Kathy Rogers is the vice president of Marston Rogers Group, a life planner and financial consultant. Reach her at (228) 206-5902 or

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