Military Finances 101: January Is National Financial Wellness Month

I think military members are a bit bi-polar when it comes to money. We'll sit around for a good portion of the day talking about investment stuff. But when it comes to other parts of our financial wellness, we're pretty quiet. We especially don't want to get any help. We can figure it out. Sometimes, that can be a mistake. Neglect of our financial wellness can lead to stress (especially for a married couple) and if we become really financially unwell, it could negatively affect our career (you could use your security clearance).

Since January is Financial Wellness Month, let's take a look at it.

And remember, you don't have to do this alone. You can get help from Personal Financial Counselors at most bases/posts...and it is free. Or if you don't want to work with someone related to the government, you can get help from different financial professionals.

Defining Financial Wellness

The first thing to do is define what “financial wellness” means for you. This varies drastically from person to person. It is informed by who you are, where you are coming from, and what your experiences with money are. A person with serious financial troubles might have different expectations than someone who has enjoyed relative financial stability.

How, then, is “financial wellness” defined? First, ask yourself what you need to feel secure, financially speaking. Here are some questions to consider:

• How much should I have saved? 
• How much income should I be bringing in each month? 
• Where am I at with my debt? 
• Would things be simpler if I carried less debt? 
• How fluid is my cash flow when it comes to expenses that are not urgent (taking your family out to dinner or on a short trip) versus larger financial goals (such as buying a new kitchen appliance)? 
• Finally, and perhaps most importantly, will i be able to retire at your target age?

Financial Wellness Goals

Thinking about financial wellness is often a matter of setting goals for what you can accomplish now and what you can work on to make it a part of your larger financial strategy. For now, consider taking these actions:

• Have a values-based conversation with the decision-makers in your household, meaning any tax-paying adult who contributes income and shares responsibility for the bills. This could be your spouse or any other family member. Make sure that the non-essential things you are spending money on, line up with your commitments to meeting your financial needs. This is not a “stop getting lattes” conversation; it is a “Are we spending money on the things that matter?” conversation.
• Consider automating payments, especially for regular items such as student loans, credit card bills, and other installment payments.
• To establish a stable foundation going forward, create an emergency fund that covers 3–6 months of household expenses. If that seems too ambitious, build the fund a month at a time until you reach your goal. If military retirement is on the horizon, work to get 12 months' worth of expenses covered.
• Make regular contributions to your retirement accounts. Take advantage of any matching contributions if you are covered by the Blended Retirement System (BRS). 
• Make long-term financial goals. If you are considering buying a house, for instance, let that guide your overall financial strategy.  
• Is becoming debt-free an achievable goal? It can be if you make it a priority. That said, being totally debt-free can be a difficult task for most households. Therefore, it may be better for you to focus on your other goals first and make debt freedom a target later: for example, being debt-free by retirement.

Of course, these are not hard and fast rules. As mentioned above, every individual has a specific definition of financial wellness. Some of these examples might feel like a long reach, while others you might already be practicing. The good news is that with careful practice and judicious scrutiny, many people can gain a feeling of satisfaction and even pleasure from maintaining financial wellness.

Having a financial strategy in place can mean a great deal to you in the long term and may also provide you with some comfort in the short term.

Military Finances are Different

Financial Wellness is important for all of us. As mentioned above, as a military member you have free resources not available to your civilian counterparts. Financial counselors and base legal are just two examples. That isn't the only way your finances are different from a civilian's. That's why we think Active and Retired Senior Military Officers and NCOs should work with a financial planner/advisor that deals with your unique issues each and every day. If you'd like to find out how we work with people just like you, use the button below to schedule a free, initial consultation.

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