EASTPOINTE, Mich. \u2013 This May, an Eastpointe family of five is taking a hard look at spending, saving and debt as they rebuild their financial game plan amid rising costs.<\/p>\n
A January survey conducted on behalf of the American Institute of CPAs found 92% of Americans have set financial goals for 2026. But half said they\u2019re concerned higher living expenses could keep them from reaching those goals. Unexpected expenses and job loss ranked among other top worries.<\/p>\n
To see what a reset can look like in real time, the Orr family \u2014 Reyonna and Demetrius, with two sons in college and a high schooler at home \u2014 sat down with Kathi Sitek, a certified financial coach at Diversified Members Credit Union.<\/p>\n
With their income now stretched across three households, the Orres said their first priorities are straightforward: save more and get better balance in their budget.<\/p>\n
\u201cThe game plan is very important because this sets the tone for what you\u2019ll be doing with your financial freedom,\u201d Sitek said.<\/p>\n
Start with goals, then build a budget<\/p>\n
Sitek said the next step after setting goals is assigning every dollar a job.<\/p>\n
\u201cEverybody can do a budget, no matter how much you make, how little, or how much,\u201d she said. \u201cIt\u2019s good to do a budget to assign that money and to stick to that.\u201d<\/p>\n
She recommends starting with known expenses, then tracking everything else for 30 days \u2014 especially \u201cmiscellaneous\u201d purchases, which can quietly add up.<\/p>\n
\u201cNumber one, miscellaneous, because that\u2019s super important,\u201d Sitek said. \u201cList all your miscellaneous expenses for 30 days.\u201d<\/p>\n
Watch for waste: subscriptions and insurance<\/p>\n
Another common leak: subscription services.<\/p>\n
\u201cI don\u2019t really have a clear capture of what we spend in subscriptions. I really don\u2019t know,\u201d Reyonna Orr said.<\/p>\n
\u201cThat\u2019s a big area,\u201d Sitek said.<\/p>\n
Sitek suggested checking for duplicate services within a household \u2014 and canceling subscriptions that aren\u2019t being used. She also encouraged shopping around for lower insurance rates, noting auto insurance costs can increase over time.<\/p>\n
Know your credit score \u2014 and keep credit use in check<\/p>\n
Sitek also said it\u2019s important for families to know their credit score and understand how their credit use affects it.<\/p>\n
\u201cSometimes I feel like your credit score is more important than the money you have in your pocket, because that helps you get better rates on auto loans, home loans,\u201d Sitek said. \u201cSo I want people to realize that. So we talk the credit score. We talk about their lines of credit, we teach them that they need to pay down their lines of credit 30% or below to bring up that credit score.\u201d<\/p>\n
Paying down debt: snowball, avalanche \u2014 or consolidation<\/p>\n
For families focused on debt reduction, Sitek said there are multiple approaches:<\/p>\n
Snowball method:\u00a0Pay off the smallest debt first while making minimum payments on the rest.<\/p>\n
Avalanche method:\u00a0Pay off the highest-interest debt first.<\/p>\n
Consolidation:\u00a0Consider a personal loan to combine multiple debts into one payment \u2014 potentially at a lower rate.<\/p>\n
\u201cThen your payment will be one payment. It\u2019ll be at a lower rate, but also it\u2019s less stress on you,\u201d Sitek said.<\/p>\n
Build the foundation: emergency savings<\/p>\n
Sitek also emphasized the importance of emergency savings, describing a \u201csavings pyramid\u201d that starts with a foundation many people overlook.<\/p>\n
\u201cAt the top is retirement. In the middle is set-aside savings. And at the bottom is your emergency savings,\u201d she said. \u201cThe bottom of the pyramid is the foundation.\u201d<\/p>\n
Savings Pyramid (Diversified Members Credit Union)<\/p>\n
Sitek recommends building at least a $1,000 emergency fund, then growing it over time. The Orres said saving has been one of the toughest parts as everyday costs rise.<\/p>\n
\u201cSaving is the absolute most difficult because you still have to deal with the right now,\u201d Reyonna Orr said.<\/p>\n
Sitek suggested automating weekly transfers to savings, even if they\u2019re small, to build a cushion before an unexpected expense hits.<\/p>\n
\u201cI think the good part is taking the step and being honest about its discomfort, but that it won\u2019t kill you,\u201d Reyonna Orr said.<\/p>\n
The Orr family plans to check back in with their financial coach in the coming weeks. In the meantime, Sitek\u2019s \u201chomework\u201d is simple: create or refresh a budget, track every expense for 30 days, and identify two changes that could free up cash this week.<\/p>\n
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