It is easy to find advice for families who earn over $200,000 per year, but when was the last time you saw an article about YOU? If your family earns from $55,000 to $70,000 what can you do to secure a healthier financial result?
Before we dig into the strategies, get it in your head that math doesn’t understand emotions. Emotions are not your enemy, but they seldom help you reach your long-term goals.
A. UNDERSTAND YOUR SPENDING HABITS.
There is no way to make meaningful changes if you have no idea what you are correcting. So, do a deep dive into your spending over the last 3 months. There are 3 categories: “a) Essential,” like mortgage payments, basic utilities (not non-essential things like streaming services), taxes, groceries (but not pizza delivery), and basic transportation (going to work or school, not flying to Nevada). “b) Non-essential,” like TV and internet, phones, and electronics, lawn service, etc. “c) Wasteful,” like expensive vacations, unnecessary toys (a new speed boat), and time-shares. How much are you spending in each category?
Are you irritated with where your money is going? Did you INTEND to spend $3,000 on meal delivery? AND, what changes should you make?
B. UNDERSTAND YOUR SAVING OPTIONS.
If your employer matches up to 5% in the company 401(k) but you are contributing less than that you are throwing away free money. Can you move some of the “Wasteful” spending into saving, it could be a win-win. Next time you get a pay raise direct 1/3 into savings. You won’t notice it being gone since you never had it in your hands.
Many neglect to move 401(k) $$ when they change jobs. Now is the best time to do so. One reason is that often it is difficult to access financial accounts created under a former employer. Another is that it is easier to manage one account instead of several (passwords, small amounts invested, or even the requirement to invest in company stock). Merge accounts.
If you cut your package deliveries in half you could have much more saved.
C. UNDERSTAND THE SIGNIFICANCE OF EACH TYPE OF DEBT.
Each type of debt needs different treatment. For example mortgage and student loan interest are tax-deductible. But credit card and auto loan interest aren’t
Sure! All debt is bad, but high-interest debt which has no tax benefit should be your first target. (It makes no sense to pay off an $800 furniture store credit at 11% when you have a $8,000 balance on a 24% interest credit card.) Choose the “stupidest” debt (probably a credit card) and put every dollar you can against it each month until paid in full. Then work on the next highest.
Ramsey says “pay off the smallest debt first.” I agree, if the interest rate is similar. I say “pay them off in general order of interest rate” (above 20% first, those below 10% last). Get control of the interest you are paying every month and you WILL get control of your debts.
You get almost instant relief from insanely high minimum payments the month after you drop the credit card balance by $500. The minimum payment drops from $250 to $225. You now have $25 more to apply to the principal.
D. UNDERSTAND THE PSYCHOLOGY OF AN EMERGENCY FUND.
The poorer you are the more you need one.
If you don’t have such a fund, begin now. Even if you still have high debt (especially if you do) you should have a fallback position. Put $250 away in a 3 month CD. In a month buy another. A month after that buy another. Now you have $750, $250 which is available monthly. Keep buying CDs and bulking up the balances. By the end of 12 months you’ll have $3,000 plus interest (a good start).
Keep growing it until you have enough to cover 3 months of essentials (food, utilities, taxes, mortgage payments, and basic transportation expenses).
Why? Emergencies happen. People get laid off. Ladders aren’t safe and insurance doesn’t cover everything until you can return to work.
E. UNDERSTAND STRESS PREVENTION PLANNING.
A vacation doesn’t pay for itself. Your daughter is 15 and you may need to pay for college, braces, or a wedding. Your 35 year roof shingles are 31 years old.
If you don’t plan for important stuff those “stuffs” will still happen (and credit card balances will grow). The absolutely best way to pay off debt is to avoid it. That takes planning.
F. UNDERSTAND SINFUL FINANCIAL DECISIONS.
Here is where some families fail.I define “sin” here as something that hurts someone you love. If you and your spouse are saving for a second honeymoon, and you stupidly go out and buy a new Bass boat with half that money, you have been financially unfaithful.
Don’t gamble with the rent money. Does some crazy crazy creature live inside of you making you do stupid things? If so, it is time to kick out that crazy caveman and make adult decisions.
Do free stuff together. It doesn’t take a ton of money to find joy. A nearby college has a free brass band festival every year. A nearby river ferry costs $0. A local grad school has a free high-quality Christmas concert with orchestra.
G. UNDERSTAND A SANE ORDER OF OPERATIONS.
You have a median income. You CANNOT do everything all at once. Here’s the actual secret to winning with a lower income: Pacing. There is an sane order to doing it and doing it well. Follow this order and you WILL win.
- FIRST, put to death all sinful spending where you are hurting the family. Gambling is only one example.
- SECOND, “Understand Your Spending Habits.” Your habits need to change a lot!!! But you can’t change something you know nothing about. End 95% of the wasteful spending. Reduce unnecessary spending by 25-50%. Know the difference between the two and refuse to backslide.
- THIRD, create an emergency fund. You can’t move ahead if you have no safety net. Take the savings you have from eliminating wasteful spending and get this done.
- FOURTH, after the emergency fund begin hacking away at debt. You will find that your “overhead” (the minimum you must pay on debt) drops almost immediately. Pay off ONE credit card at a time. Remove the credit card app off your phone. Make it more difficult to use a card so it is an intentional act. Your initial goal is simple: cut your minimum payment amount in half (not counting mortgage).
- FIFTH, once you have your debts better controlled you should have some extra money to throw at Planning Ahead. When you have one future thing funded you will feel an intense freedom that you’ll never want to lose.
- FINALLY, fund your retirement. Warning: You can’t fund the future until you’ve paid off most of the past (A mortgage is OK, but get that car paid off!).
You are WORKING HARD with this set of priorities to fund YOUR retirement. Unfortunately, some of the younger generation will think you need to share it with them. The biggest issue with that is that THEY have done none of the work. They “deserve” nothing they haven’t contributed to. And you need feel no guilt for having a good result.
Copyright 2026 Donald Whelpley
[PLEASE NOTE that Don is always open to discussing the thoughts and opinions he shares here and welcomes comments as shared in the comment section. He doesn’t use other social media platforms and won’t see whatever you’d like to share with him if you post it elsewhere.
ALSO, Don is always open to offer his thoughts on various topics. If you have a specific request, you can let him know in a comment; he reads – and replies to – them all. ~ Sherry]
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