facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Military Finances 101: 8 Step Summer Financial Checkup  Thumbnail

Military Finances 101: 8 Step Summer Financial Checkup

Managing Your Finances

Summer is here and PCS season has begun. When your circumstances change, there is often the opportunity to evaluate where you are. While it's best to check the following 8 "steps" every year, if you can do it every time you PCS, you'll be ahead of most Americans.

Step 1: Analyze Your Spending Plan

In 2015, approximately 38 percent of Americans were breaking even with their spending, while 18 percent were spending more than they were making.1 An effective way to avoid spending more than you’re earning is to step back and take stock of your monthly and annual spending plan. And if you don’t have a plan at all, use this time to make one

Many credit cards or banks will offer categorical breakdowns of your spending, which can be a great way to find out what you’re spending the most money on and if there’s room to cut back. Determine which expenses are truly essential and which are optional. Look to reduce the optional expenses. To get the best look at your spending habits, you may want to evaluate your savings and spending record over the past six to 12 months. 

Step 2: Seek Out Tax Savings

Your tax return is a little like your OPR/OER/FITREP. You "write" it yourself by what you do with your money. Your tax return just reports it. This year, try taking a different approach to tax season by evaluating your tax-saving strategies early. You may want to work with your financial planner or tax professional to create a mock tax return, as this can help you understand your withholding options and tax-saving opportunities such as TSP and IRAs.

Focus on filing any time-sensitive deductions and brush up on changes in tax laws. Reaching out to your tax professional now could mean you have more time to prepare and strategize together for next year’s returns.

Step 3: Tackle Your Debt

An alarming one-fifth of adults roll over $2,500 in credit card debt each month.2 If you’re guilty of putting off managing your amounting expenses, now’s the time to start planning to pay it off. While most consumers have some amount of good debt on their plate (mortgages, car payments, etc.), it’s the bad debt (credit card debt, student loans, etc.) that you’ll likely want to focus on managing and eliminating

While you could be tempted to simply pay off what shows up on the bills each month, you may want to create a debt summary to get a better idea of your total debt’s big picture. By creating an annual debt summary, you and your financial advisor can better understand whether you’re gradually working down the amount or falling farther into the hole.

Just in case you need a reminder, your debt load and credit report affect your ability to get a security clearance. The DoD is now monitoring credit reports "continuously" not just when you update your SF 86.

Step 4: Revisit Short and Long-Term Goals

A lot can change since your last PCS - marriage, death, divorce, and growing your family. Even seemingly small adjustments, like a promotion or sending a kid off to college, can have a significant impact on your financial status. That’s why it’s important to regularly review your long-term goals and progress towards them while revisiting and evaluating your shorter term goals as well. 

Step 5: Evaluate Coverage and Providers

As you’re reviewing your spending plan, take the extra time to thoroughly evaluate your new providers and coverage options. This includes your internet, cable and wireless service providers in addition to your insurance coverage options. Don't sign up for services you did use at your last duty station and check to make sure you're not getting insurance you don't need just because you moved to a new state and the coverage is "opt-out".  

Step 6: Reassess and Rebalance Your Portfolio

It’s important to visit your portfolio and risk tolerance regularly to help keep it in line with your tolerance, goals and market conditions. While most managed portfolios will be rebalanced automatically, it’s important to take stock of your investments’ big picture. Doing so can help you determine if you need to diversify differently or reassess your risk tolerance.

Step 7: Review Your Retirement Savings

Whether retirement is decades down the line or within the upcoming year, reviewing your retirement savings on an annual basis is a great habit to start. If you're covered by the Blended Retirement System, it is critical to make sure you're contributing enough to TSP to get the full government match. If you can, contribute more or contribute to a Roth IRA.

Step 8: Assess Your Estate Plan

It’s not fun to plan for the worst case scenario, but leaving your family with an outdated will, trust or estate plan can lead to some major issues down the line. As you assess your legacy plan annually, make sure you’re accounting for any newly acquired assets (houses, cars, pets, etc.) while checking that your designated representatives are still willing and able to assist in the event of your passing.

PCS time can be busy, but there usually is some down time when you're starting to spin up. Life changes are a great time to check on how things are going.

If you liked this article, you might enjoy the following blog posts:

5 Ways for Military Officers to Stay Financially Fit

6 Books Junior Military Officers Should Read to Learn About Investing

5 Financial Goals for Junior Military Officers



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.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.