Some Basic Steps to Financial Fitness

Though finances tend to be a personal matter, sometimes you need a little help to meet your goals. Cornerstone Credit Union’s Lorna Cote offers some steps for getting your finances in shape.

The way you handle your finances is a personal choice. The decisions you make about them change over time and may differ from those of your friends or your parents. Still, there are some broad guidelines that may help you get better control on your financial plans.


Start by comparing your income to your current expenses. Create a spreadsheet so you can clearly see how much money you bring in and how much you spend. If money is tight, use this spreadsheet to see which non-essential expenses you can cut back.

Reduce Debt

Watch how you use credit cards. If you can’t pay off the balances in full each month, you are overspending. To avoid high interest payments, try to live at or below your means and curb your credit card usage. This will not only decrease your debt but help you to qualify for lower-interest credit cards and loans.

Save for Emergencies

How much should you be saving in an emergency fund? Financial experts suggest putting three to six months’ take-home pay in a savings account. That can take time to build up, and you may need to raid your account even while you’re adding to it. Still, if you consistently put aside at least 5% of your take-home pay, using payroll deduction, you’ll reach your goal.

Create a Nest Egg

If your employer offers a 401(k), contribute a percentage that equals what your employer will match. Anything less and you’re actually giving up free money. Ideally, contribute the maximum your employer allows. Can’t swing that much while you’re saving for your child’s future education expenses? Keep this in mind: You can borrow to meet higher education expenses, but you can’t borrow for retirement expenses.

If your employer doesn’t offer a 401(k) or you are self-employed, look at other options, like a traditional IRA, a Roth IRA or a Simplified Employee Pension IRA.

Get Adequate Insurance

Buying good insurance for your health, car and home (or renters’ insurance), is a good investment. It will protect your finances from high medical costs, damages due to car accidents and losses to your personal property.

Seek Advice

Cornerstone Credit Union’s team has plenty of resources available to help you along your path to financial wellness. Find more starting points and advice online at

Lorna Cote is marketing manager for Cornerstone Credit Union, a financial services organization open to the community and serving northwest Illinois and southern Wisconsin.