Financial Wellness Today : Navigating America’s Financial Pressure Crisis

And of course, there are testing measures, and we don’t give legal advice in this podcast, but there are testing measures to make sure somebody qualifies for that. I know you know that this show is powered by Cambridge Credit Counseling, and one of the services that we provide is bankruptcy counseling, where if you’re going to file for bankruptcy, you have to get counseling that’s certified before you file and after you file. For whatever happened, the goal is to try to counsel the person to steer them in the right direction to move away from the bankruptcy as they rebuild themselves. Many people assume bankruptcy represents failure, and that’s not the case. In many cases, it represents being exhausted, months, sometimes years of trying to hold everything together.

The bankruptcy itself usually is the final chapter, not the beginning. Then there are the reports that probably caught my attention the most, which is where researchers found many paycheck-to-paycheck consumers feel tracked because they’re already eliminated everything possible from their budgets, and then they’re stuck. Think about that. For years, we’ve heard cut spending, trim expenses, cancel subscriptions, eat at home. But eventually, a family reaches a point where there is nothing left to cut.

The rent is necessary, the utility bill is necessary, transportation is necessary, food is necessary. At some point, the financial conversations within the household change and can affect relationships. It stops being, where can I cut, and becomes, how do I survive? And that’s a fundamentally different issue. We also saw research indicating many college students now rely on credit cards for basic living expenses, not vacations, not luxury purchases, basic necessities, food, housing, transportation.

They’re not borrowing to get ahead, they’re borrowing to keep up. And that’s a concerning development because financial pressure is beginning earlier in life than ever before. Now, when I look at all these headlines together, I don’t see separate stories. I see one story, I see what I’ve been calling America’s financial pressure crisis. So let’s talk about what that really means.

We’re going to take a break, and we’ll get into it even further. This is Gordon Oliver, your host. We’ll be right back. Welcome back to Financial Wellness Today. I’m your host, Gordon Oliver.

And again, I just talked about some headlines that just talk about the disturbing trend of America’s financial pressure crisis. And a lot of times, I do a lot of workshops that revolve around budgeting and financial wellness, credit report review, FICO scoring, understanding, just things that are topics that revolve around financial wellness. And in all of these episodes and workshops that I do and I talk about these things, when you’re budgeting, obviously a budget is, some people don’t love the word, they actually push back and feel like it’s a controlling word, like my budget, you’re controlling my money, even though it’s the individual’s money coming in and going out with the bills they’re paying and the expenses that they have. But a lot of times, we talk about what’s called a crisis budget, and a crisis budget is when something puts you in crisis, the very last thing you want to be doing is worrying about what bills you’re going to pay. So when you create a budget, and if you’re listening to this show, and this is your first time even thinking about putting a budget together, because some people just kind of go around, they know what they’re spending, they know what income’s coming in.

But if you’re at the point in your life where you want to put a budget together, and I strongly recommend it, one of the things that you do once you create a budget is you’ve got to measure it, right? If you put down that you spend $400 on groceries, and you do what’s called journalizing for a month, and you collect all your grocery receipts, and you find out you’re spending $600, well, then you’re spending $200 more than you thought you were, and you either got to make cuts or adjust the budget there. In a crisis budget, and let’s talk about those situations, crisis can be loss of a job, loss of overtime, injury, medical issue, loss of a family member. A lot of times in our time of counseling, it’s someone calling because they lost their spouse, and when you lose your spouse, right away, that income is going away, so your income technically gets cut in half. Now of course, there are some people that after everything gets resolved, they have insurances and things that will cover it, but what do you do in the time that you have that gap where you don’t have income coming in?

And that’s where a crisis budget comes in, where you’re making decisions when you have a clear mind what’s going to get paid if there’s a crisis. So this kind of leads to the disappearing financial margin, right? This is like a concept that people feel, but they’re not really sure they even know why it’s happening, and this basically explains a lot about financial stress than any statistic ever could, and the concept is the margin, right? Financial margin’s simple. It’s the difference between what comes in, and that’s your income, and if you’re making a budget for the first time, report all sources of income.

If you work in a job, for example, that is inconsistent income, like let’s say you’re a server at a restaurant, and one week you make $500, and the next week you make $250, and the week after that you make $750, right? You’ve got to put some kind of number to go off of, so typically you would average those amounts for either a month for four weeks, or three months for a quarter, so you want to come up with an average amount and use that as the income, but again, it’s income versus expenses, what’s coming in versus what’s going out. So the margin is your breathing room, so after everything is paid, and then we have a website that’s called mymoneyatcambridgecredit.org. If you go on the website, you go to the financial wellness section, the education section, there’s a link. It’s a free portal.

You can build your budget, and when you get done with building it, income and expenses, at the top it’ll tell you what you have left over, hopefully, and hopefully it’s not less, which means you’re upside down. So margin is the difference between your income, what goes out, and then whatever you have left over, and that’s your breathing room, and then you have to decide what you’re going to do with that. So imagine two families earning exactly the same income. Family A has savings, manageable debt, and flexibility. Family B has large fixed expenses, high debt, no emergency fund, and you’ll hear me say this a lot on this show, because it’s about financial wellness.

If you are listening and trying to understand what kind of savings you should have, the recommendation, if you have none, start somewhere. Open an account, don’t get a debit card with it, just start putting whatever you can each pay period into savings. Even if it’s $5, get started. You’d be surprised how when it builds, you start to feel like you’re going in the right direction. But the recommendation is three to six months of all of your bill payments in savings so that if something happens, you have something to fall back on.

So you’ve got family A that’s got savings, manageable debt, and flexibility. You’ve got family B that has large fixed expenses, high debt, no emergency fund, and both families earn the same amount. But only one family has margin. When the furnace breaks, when the transmission fails, when the medical bill arrives, margin determines whether the problem becomes an inconvenience or a crisis. What we see today is that many American families are operating with almost no margin.

I believe one of the statistics I saw was 68% of people are living paycheck to paycheck, and this is not income-based statistics. There are people that are making plenty of money that live paycheck to paycheck because maybe they overextended themselves with vehicles, the type of house they’re in, et cetera. That comes with a cost. Then when life happens and things come your way, it’s how prepared are you to deal with those things? Now I want to give you some context.

Back during COVID, the amount of credit card debt that the country was in was $840 billion. So when we talk about margin, right, the total today that we are in credit card debt is $1.25 trillion in credit card debt. So think about that. In what is it, four years now? 19?

No, so it’s six years. In six years, we went from $840 billion in credit card debt to $1.2 trillion. So you want to ask yourself, if a $2,000 unexpected expense happened tomorrow, what would happen? Would it be frustrating? Would it create a financial emergency?

Would you use a credit card to pay for it because you don’t have savings or you haven’t been using that margin to put money away? And that’s one of the best indications of where you are with financial wellness because if you’re not able to handle a $400 expense, for example, that means that you are on the limit of going upside down. It’s a sign. And if you’re in that position, that’s when it’s time to start looking at the budget, looking at where things can get cut. And again, as I said in the beginning of the show, a lot of people are at the point where they are at that limit at this point, which is causing tremendous stress.

When COVID was in play and we got out of COVID, moved and the economy opened, one of the biggest focuses was on mental stress. As time went on, anybody listening to this show knows that slowly but surely, everything started to cost more. We just went through an episode, again, several months ago, where gas went up $1 in 30 days. If you’re in a tight budget and you’ve cut everything and gas goes up $1, it has an impact. So these are the things that this show is about, right?

We’re going to talk about these things. I want you to email the show. You can email me at gordonocaresatgmail.com. Send me questions, send me topics. I know these things are happening.

I see these headlines. We counsel people all week long that are in these positions. That’s why we know these discussions need to be had, so it can give something to the community, to the public to think about. It may not be you. It may be a loved one.

At the end of the show, we’ll give some resources to you that people can reach out to to get some help. So when we come back, why good incomes don’t always create financial security and why more Americans than ever feel stuck despite earning more money. Stay with us. This is Gordon Oliver. We’ll be right back.

Today’s episode is brought to you by Cambridge Credit Counseling. This show is powered by Cambridge Credit Counseling. If high interest rate debt is making it difficult to move forward, Cambridge may be able to help. For more than two decades, Cambridge Credit Counseling has helped consumers improve their financial wellness through counseling, education, housing services, and debt management programs. You can learn more at www.cambridge-credit.org forward slash debt or call 888-656-4390.

That’s Cambridge Credit Counseling, and they are a national organization because life is just simply better without debt. Welcome back, everyone. This is Gordon Oliver with Financial Wellness Today, a very, very important episode. I would like to say all of them are because the show is really designed to help people tune in for a short period of time to get some ideas wherever you’re at in your financial life on what you can do to start to make improvements and set some goals on where you want to be in a month, three months, six months, a year, five years, 10 years. That’s what the show is about.

And a lot of this information is always going to be helpful because people are always bringing in an income. They’re always paying bills, and they’re always going to be that. So why good income still feels tight? This is a very important piece and sometimes a misconception in the world that just because you’re looking at somebody and they make a good living and you’re aware of it means that they’re on high street, right? Everything’s great.

Well, that’s not always the case, and it’s one of the biggest myths in America because more income automatically creates financial security is what people think. It doesn’t. Income helps, but income alone doesn’t guarantee stability. So let’s imagine family A again earns $75,000. Family B earns $150,000.

And most people assume family B is automatically better off. But what if family B has a large mortgage or two, one or two big cars with big car payments, credit card debt, student loans, private school tuition, suddenly that larger paycheck isn’t creating more security, it’s supporting more obligations. And most of those obligations have interest attached to them. Interest eats your money alive. So when you’re supporting more obligations, this is often called lifestyle inflation.

The tendency for expenses to rise alongside income is a common problem until you realize that you’re in the middle of doing it. So when you get that raise, what happens with your budget? It’s a question for everyone listening to think about for a while. If you’re going to get a raise, do you just keep doing what you’re doing and spending money or does that extra money that comes in your paycheck become something that helps you towards the path of financial wellness? So the lifestyle inflation tendency for expenses is usually what happens.

People either spend more, they go out more, they go to dinner more. And this is where when you start to create a game plan for financial wellness, you will be aware of some of these things and hopefully prevent them from happening and use that additional income either to build savings or pay down debt. When your expenses rise, the extra income doesn’t matter. And now you’re earning more but feeling the same exact financial stress. This is what I said earlier, which was if you don’t have savings right now and you are living paycheck to paycheck, look into the budget.

Even if you have and you think you’ve cut everything, try to find some amount to start putting into savings. And it really doesn’t matter how you do it, whatever works best for you. You want to open an account at a different bank and just have that be the deposit bank and you don’t have a debit card so that you’re just depositing and you actually have to walk in to the bank to make the deposit. And a lot of, a lot of these payments that you can make can be done with your employer. Ask your HR manager, Hey, I’m looking to start building savings.

I would like to get 5% of my paycheck, 3% of my paycheck sent to a different bank. Is that possible? And they should be able to accommodate it coming right out of your paycheck. When that happens, it’s like it was never there and it’s just happening. And then you deal with your paycheck income that comes into your main account.

So that financial stress feeling when you make more money, it doesn’t go away if you just end up spending the more that you’re making. Right? So you want to make a game plan. This is all about putting a plan together that’s going to make you motivated and happy and not stressed out to deal with bills coming in and the emotional side of when you feel like you can’t make enough money, even though you’re paying the bills, that still provides stress. We’re going to take a quick break.

When we come back, we’re going to talk about the emotional cost of financial stress because it’s not just about the feeling of it. The emotions are part of it. And then there’s the financial part of it. So we’re going to get into that a little bit as we continue this episode. This is Gordon Oliver.

We’ll be right back. Hello, everyone. Welcome back to financial wellness today. This is Gordon Oliver. And so far I’ve been talking about unexpected expenses, being overwhelmed, financial stress, what to do about savings, just things that people are dealing with in today’s world.

A very large portion of people in our country are overextended and living paycheck to paycheck and the purpose of this show always is bringing things up to light and we’re going to have some guests on the show coming up in the next few episodes to give information to go to a trusted place because don’t forget there are a lot of bad things out there for you. A lot of things advertised on the Internet, a lot of things advertised on social media, a lot of things that don’t necessarily help but make it seem like they will. So again, the purpose of the show is to bring trusted information powered by Cambridge Credit Counseling who’s been in business almost 30 years this coming November. So just keep that in mind. This is a trusted 501c3 nonprofit that’s been in business for 30 years helping people nationally.

All 50 states, the Virgin Islands helping people and that’s what the show is about. So let’s talk about the emotional cost of financial stress. So money isn’t just math. Money isn’t emotional, right? Money impacts relationships, sleep, confidence, health, productivity.

Financial stress follows people everywhere. It follows them to work. It follows them home. It follows them into bed. Many people lie awake at night not because of money itself but because of uncertainty.

Uncertainty, questions like, what if something happens? Like, what if something happens to me? How will it affect the family? How will we afford to put our children through college? Will we ever retire?

What if we lose our job? Those are the things that people think that keep them up at night. And financial pressure creates decision fatigue. Like people get burnt thinking about it again and again and again. Every purchase becomes a calculation.

Every unexpected expense becomes a source of anxiety. That’s exhausting. And I think we’re seeing that exhaustion all around us. Now, again, I talked earlier about workshops that I do all the time. And if anybody’s interested in me doing a workshop in the workplace, because I’m gonna talk about that now, please email me at gordonocares at gmail.com.

That’s Gordon, G-O-R-D-O-N-O cares at gmail.com. Here’s the story for the workplace, right? A lot of companies, doesn’t matter what size they are. We have companies we help with 30 employees. We have companies we help with thousands of employees.

So that doesn’t matter. What does matter is one in three people, statistically, are struggling in the workplace. And again, going back to COVID forward, mental health was the big push for companies to help their employees as they came back to work or as they were just dealing with the experience itself. The news was crazy. They had tickers of how many people were passing away.

I mean, there was just so many things happening that just caused mental problems for people. At the same time, the economy started going bad. Things started costing more. Everything costs more. And remember, your employers, their costs go up too now.

I think everybody knows we can talk about healthcare. It’s been going up regardless of COVID every year, it seems. And this year is no different, right? Healthcare is just a major expense. It’s a major issue for companies.

It’s a major issue for Americans. We had our guest Adam Zebian talking about healthcare and how to do some alternate strategies to start to deal with that. So again, remember when you’re an employee and your expenses are high, one of the first things that people think is, can I get a raise? Well, maybe the company is not in a position to give everyone a raise to solve the problem because everything costs more. Because again, everything costs more to the company too.

Right? So it’s not just impacting individuals and employees, it’s impacting employers and businesses as well. And that’s why the economy in itself has gone in a direction that hasn’t been great. We’ve been through the discussion about eggs and chicken and all the things that all of a sudden spike in costs. So just understand that employers and employees, one in three are struggling.

That means that’s a cost to the employer, right? When somebody struggles, let’s say employee A decides, I’m going to start looking for another job with more pay. If that happens, great, congratulations to the employee. But for the employer now, we have a gap. Now, what are we going to do with that gap?

We don’t have somebody doing their job. Do we have to fill that? What does filling it mean? It means we have to advertise that the position’s open. It means that we have to interview people.

It means that we have to decide and hire somebody and then we have to train them. All that comes at a cost. Even more importantly, let’s say that the employee doesn’t decide to look for another job. They’re just not very happy in the workplace. So what does that mean?

I brought up all the things about not sleeping at night, right? Because you’re thinking about what if the furnace breaks? What if the transmission fails? I know I need tires soon. My roof is 20 years old and there’s a leak that we keep fixing.

What does a roof cost, right? That’s the stress that people go through. And just relate it. What did a roof cost five years ago versus what it costs today? Because guess what?

The roofing company, they have additional expenses too. How about the gas that they have to put in all their vehicles to drive to the jobs that they have to do at a dollar more a gallon? So just think about, this is like, let’s all come together and understand that this is a pressure that many people today are in. I said 68% are living paycheck to paycheck. So think about the employer side.

Employee that wants to go find another job or they’re in the workplace struggling and people, when it comes to debt problems or overextension or not doing well financially, it’s one of the things they don’t want to tell everybody because there’s shame in telling others I’m struggling with paying my bills, right? So most of the time, people don’t talk to others about it. So in the workplace, they’re still struggling. So they go home, they have dinner. Maybe they’re not as focused and present to do homework with their children because they’re distracted.

That’s a result of being stressed out or financial anxiety kicking in. Then they try to go to sleep. They don’t get enough sleep because they’re thinking about what if the furnace breaks? What if the roof needs to be replaced soon? What if I need tires for the car soon?

What’s that going to cost me? And then they get up, they go to work. In work, they’re not as rested. So now they’re burnt out a little bit, let’s say, or tired. What does that mean to the employer?

That means potentially morale isn’t great. So maybe they get into a fight with another employee because they’re on edge or maybe they’re not doing their job as good as they could. So quality might suffer or they’re not doing their job as fast as they could because they’re tired. So their productivity suffers. So this is a problem that is a problem for everyone, right?

And a way to deal with it, and I say this all of the time, there’s always an answer. There’s always an answer. You can always start. You can always change directions. So what does all of this mean, right?

And here’s the good news. You don’t need to solve everything all at once. You just need to start. Three things I’d encourage every listener to do. Number one, know your numbers.

Understand income, expenses, debt, and savings. Clarity creates control. In our workshops, and I know people may not believe this, but the good news is that credit cards, if you look at your statements, and we’re in the electronic world, so now people make their payments on their phones or on their laptops or whatever, but they don’t necessarily look at the statements. They just look at what’s due and they either make that payment, they don’t necessarily look at the statement. If you have not done this in a while, open your credit card statement, and on that statement, they’re required to tell you, if you follow your minimum payments, it will take you X amount of years and cost you X amount of money in interest.

One of the examples that we use when I do workshops, a $15,000 balance will start at a payment of $501. It’ll take you 301 payments to pay it off and cost you $33,000 in interest. So the reason I bring this up is, if you don’t know your numbers, it’s hard for you to know how bad the position might be and that, like I just said at the start of this, you can start somewhere. There’s always an answer. So you’ve got to know your income, expenses, debt, savings, what is costing you in interest, and then once you know that, clarity creates stability or control.

Number two, you want to build margin. Even small amounts matter. An extra 500 in emergency savings creates options. Options reduce stress. Not having options causes stress.

So you’ve got to try to find a way, even if you start small, to build the margin. Number three, ask for help. Financial struggles are not character flaws. Education and guidance matter in this. So people that feel like that they’re depressed because they got themselves into a situation, there are many things that can lead to being on a tight budget.

It’s expensive out there. If you have children, putting them through sports is expensive. I know the hockey business is expensive. They got to rent ice time. The equipment’s expensive.

But yet, we all know that the kids being in sports is good. It’s good for social interaction. It’s good for fitness. So you go out of your way to make these things happen to try to get your children into programs and again, they’re expensive. So there’s so many reasons and some of them are not in our control.

The economy’s gone bad since COVID like I’ve said and that means things have costed more but that doesn’t mean everybody makes more money. Maybe you’re making the same amount of money and then when gas goes up and your car insurance goes up and your house insurance goes up, you’re not making more money. So these are the things that can create these situations. So my number three asking for help is also give yourself a break. There’s always an answer.

If you are stressed, take a deep breath and start to move forward on figuring out what decisions can be made. And these numbers, know your numbers, build margin, ask for help. These are all the things that you can do to get started on a path to get away from how you feel and the financial position that you’re in. The sooner people seek help, the more options that they usually have and because you feel like you might be embarrassed to ask for help, we certainly understand that and Cambridge Credit Counseling powers this show and again, I’m gonna give more contact information at the end that you can call, confidentially speak to a certified counselor. Cambridgecredit.org forward slash debt is a confidential webpage that you can call or fill out a five slot information page, name, phone number, email, city, state so that a certified counselor can speak to you and no one needs to know about it.

So understand that there is help out there, that company’s been in business for 30 years this November, trusted, top rated, national organization here to help people that are struggling with budgeting and paying bills down. Now I wanna kind of put out there a financial wellness challenge, right? So we talked about margin today and I want you to work on calculating what your margin is and here’s a huge piece of advice that we give all the time. If you’re going to make your budget and figure out what your margin is, do not start adjusting because you wanna lower the number that you’re writing down in the budget because you know you may be spending too much. If you spend 500 going out to eat dinner, put 500 down so you can find your true margin and then if you wanna adjust that number and make it 300 to cut it by 200, then do that as an adjustment.

You need the truth to come up with solutions. So when you do the budget for the first time or if you have a budget that hasn’t been looked at for a while, do it, find out what your margin is and it should only take you like 15 minutes and all you have to really look at is what comes in, what goes out and how much breathing room remains and that number tells you more about your financial wellness than almost anything else. Being in gratitude doing this show, I actually have hope and it’s because we’re finally talking about financial stress and these recordings can be listened to at any time. If you’re driving somewhere, going to work, if you’re going on a trip, you can listen to these shows and all the things we’re gonna talk about are all topics that affect consumers across the board. So talking about it is where it starts.

Having some place to go to to listen and not be judged is important. Employers for Cambridge Credit Counseling, The Powers This Show, a lot of employers and employee assistance programs are bringing Cambridge in as a benefit so that people can confidentially go to a website, fill out their information or call an 800 number and get to a certified counselor. So financial institutions, employers, consumers, families at the dinner table, they’re talking about it and awareness is definitely the first step towards feeling empowered and making improvements. Financial wellness is a topic now and employers are looking for resources to provide their employees information, workshops, things that they can use to think about how they can better their situation and that’s progress. So even though the economy is not great, there’s more and more of a starvation for companies to offer financial wellness and Cambridge Credit Counseling being national can do that and is there to help people in any way that they can.

So before we close the show, here’s my final thought. I don’t think Americans are failing financially and I wanna say that in business for a long time and knowing who calls us for help. We help companies, associations, unions, union members, their employers because I talked earlier about employers have a cost when one in three employees are struggling with debt problems. Pressure changes behavior. If you think, I think I’m gonna tell a quick story in this close because I remember it so very well.

When I was in high school, I was in a course that was all about the legal side of things, right? So in our school, we had a setup where there was a room that was a court. It was a court so you had to go in there and kind of work through court cases. So my job was I was an attorney and I had my talking points, I had my nice little pink tie, nice gray jacket, just ready to rock and as soon as it was my turn to talk, I couldn’t breathe. Like I just froze and my chest felt like I was suffocating and somehow I remember my hand shaking with my index cards.

Somehow I got through it and that’s the way that I felt and that pressure was tremendous which is why I froze. Now my teacher and maybe they were just saying it, I thought they were probably just saying it but they didn’t see it that way, I just felt it that way and I want to relate that to what happens when every single day you wake up thinking about money, thinking about paying bills, thinking about how to put food on the table. These are the conversations. I love when politicians are like, oh, this is what the American people want. Yeah, well, what the American people want is to live a prosperous life and unfortunately, our dollars, our money, the money that we make doesn’t go long these days because everything costs more than it usually does.

I’m hoping that that problem gets fixed in the future but if it doesn’t, we still are the stewards of our household, of our income, of our expenses, of our savings, of our investments, of everything that we do to be financially well. So pressure affects decisions, behavior, health, relationships, but pressure does not have to define your future. One good decision today can change tomorrow and it’s not looking for perfection, it’s looking for progress, not overnight success, not being a millionaire tomorrow by some means, it’s consistency because financial wellness isn’t about getting rich, it’s about creating enough stability that your future does not depend on luck. Thank you for joining me for another episode of Financial Wellness today. If you’d like help with debt, financial wellness or housing counseling, visit cambridgecredit.org forward slash debt or call 888-656-4390.

You can also connect with me if you have questions, if you want a topic talked about on this show, Facebook is at Gordon O’Cares, that’s Gordon O’Cares, Instagram same at Gordon O’Cares, LinkedIn at Gordon O’Cares. If you enjoyed today’s episode, please subscribe, share the show and leave a review. My goal here each and every episode is to bring information that will help you or help others so that’s why sharing the show will help others know that there is a show to listen to to get information on how to get better financially. Until next time, I’m Gordon Oliver and remember, financial wellness isn’t about getting rich, it’s about creating enough stability that your future does not depend on luck. See you next episode on financial wellness today.