Financial Wellness Tips for Service Members
Financial fitness isn’t rocket science - you already have everything you need to develop healthy spending and saving habits.
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Whether you’re just starting out in the military or getting ready to retire, or find yourself somewhere in between, small changes to your financial habits can improve your overall financial wellness. Here are some tips that can help you build healthy finances for the rest of your life.
1. Bank with a financial institution that meets your needs. A bank or credit union with military-focused products and services is a great fit for both active and retired service members. Many offers targeted services and resources that meet your needs at every phase of your military career and beyond. Navy Federal Credit Union, for example, is a non-profit credit union that puts the needs of the military community and their families first. Not only do they offer a wide range of products and services, but they understand the demands and rhythm of daily military life.
2. Make (and stick to) a budget. Creating and living by a budget is one of the best ways to assure financial security in the day-to-day and long term. With a budget, you know where every dollar you spend is going and can plan both fixed and variable expenditures. Doing so also allows you to identify areas where you can cut back on spending and keeps you accountable to not overspend. Budgets can take a lot of anxiety out of paying bills or waiting for your next paycheck – when you’re carefully managing every dollar that leaves your bank account you can rest assured that your rent check or car payment won’t overdraft or leave you with pennies until your next payday.
3. Save. Saving your money can look many different ways. It can include building wealth for retirement, saving up enough for a down payment on a house, or even stashing away an emergency fund for unforeseen expenses. No matter what your goals or income are, you can’t go wrong with setting aside money each month to put towards your savings. At a minimum, experts advise to keep at least $1000 in an emergency fund and work towards building 3-6 months of living expenses. If you want to dive into some of the nuances of saving your money, check out this comprehensive article about saving and investing with Navy Federal. If you’re still in service, here’s a resource guidefor jumpstarting retirement savings before you leave the military.
4. Get out of debt. Debt without a plan to pay it off can quickly become a monster on your back. Though high interest debt can often be the riskiest, even low interest debt, such as a mortgage or student loan, can significantly impact your financial health if you don’t have a plan. This is where your budget can come in handy. Allocate your monthly finances to pay down your highest interest debt first, and then work toward your lower interest debt. Make sure to include plans to pay more than just your monthly minimum – doing so helps you pay off your debt faster with less interest.
5. Build your credit. Good credit equals lower interest rates on loans and credit cards, better insurance rates, higher credit limits, and much more. Your credit score depends on a combination of several factors, such as your debt to asset ration, on-time payments, and length of accounts. Discipline and time are key to building credit for the first time or repairing less than optimal credit. A budget can help you stay on the right track and remain accountable to your goals while you’re building credit. Here are some credit-building tips if you’re a building credit for the first time.
Financial fitness isn’t rocket science – you already have everything you need to develop healthy spending and saving habits. Good financial decisions start in the day to day and will help set you up for a strong financial future.
This article was sponsored by Navy Federal Credit Union.