The New Year has come and gone. February is two-thirds over and most New Year's resolutions have been forgotten. Military officers don't generally make resolutions about getting in shape because you've been staying fit as part of your job. Unfortunately, the mission often gets in the way of your financial fitness. If you're past the resolution "high" and are ready to get and stay financially fit starting now, here are 5 ideas to get you moving in the right direction.
1. Trim the Fat
One of the first steps toward a more healthy financial future is spending less. If you take the time to take a hard look at your budget, odds are you can find some excess that you can easily trim off without feeling the pinch. Start with spending items that are wants versus needs. Do you really need to go out for lunch, all those cable channels, or the newest tech? If you don't need it, look at dropping it. When you've trimmed your wants to a reasonable level, take a look at reducing what you spend on your needs. You can look for ways to reduce your grocery costs like shopping at the commissary or perhaps some energy efficiency upgrades can reduce your energy costs and pay back the investment quickly. You won't eliminate needs (they're needs after all), but you might be able to save a bit.
2. Tone Up Your Debt
Odds are the holidays have increased your credit card bills. Don't let that debt snowball higher than it needs to with accruing interest. Start with your highest interest rate card and set a larger payment in your budget to begin lessening that total. Once it is paid off, use that payment plus what you were already paying to start tackling your next high-interest debt and so on. A critical thing to remember is that when paying only your minimum payment, it will take you ten years and a significant amount of interest to pay off your card so always pay more than the minimum if you are looking to pay off debt.
3. Whip Your Credit Into Shape
Your credit score can affect you in many aspects of your life. Most importantly, it can affect your security clearance. Beyond that, whether you are looking to buy a house, a car, or to take out a loan to start a business, your credit score will be used to determine how much interest you will pay and how likely you are to even get your funds. Credit scores can also affect the amount you pay for auto insurance. Unfortunately, many people neglect their score until they need it, and at that point, it can be difficult to improve in the available time. Keep your credit card balance far from the limits, be sure to make payments on time, and monitor your score for negative marks.
4. Load Up of Savings
Once you have trimmed the fat off your budget, you will want to put some of that into savings. One thing to start saving for immediately is an emergency fund. Unexpected expenses such as surprise repairs can damage your financial health if you are not prepared for them. Having this fund available for these times can lessen the blow and help you stay on top of your bills, so you don't fall behind. You'll also want to have a cash reserve when you separate from the military and you will eventually separate from the military.
5. Put Retirement Savings in Your Routine
Saving for retirement is critical so that you can retire. If you stay in the military for 20 years, you'll have a pension which puts you ahead of most civilians. With that said, you can't ignore saving for retirement as your pension may not be enough and there is no guarantee you'll stay for 20 years. Make it a point this year to focus on your retirement goals and find extra funds that you can put into TSP so that it has the necessary time to grow as it should. If you're covered by the Blended Retirement System (BRS) make sure you contribute at least 5% of your base pay so that you get the full government match.
Get your finances healthy this year and set attainable goals to help you grow your wealth and get started on a secure financial future.
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This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.