During February 22-27, the nonprofit called America Saves promotes Military Saves Week to encourage military families to save money, reduce debt, and build wealth. It’s a perfect time to review your savings habits, make changes, and set goals to create greater peace of mind and improve your long-term financial stability.
Consider these facts: Only 50% of Americans say they have a savings plan with goals; and surveys show that money is the top source of psychological stress for adults. Money issues not only create stress, they strain relationships, lead to conflict, and are a leading cause of divorce. However, this doesn’t have to be the case if you create a realistic budget and a financial plan–and stick to them.
Many people don’t know where to start. My advice is to begin with goals in mind. America Saves suggests:
- Saving for emergencies
- Paying off debt – especially high interest rate debt
- Opening a retirement account and regularly contributing to it
- Saving for big purchases such as a car, house or your children’s education
Fortunately, there are several federal programs that help military families save for the future. By taking advantage of technology, you can boost your savings habits:
- Save automatically using MyPay
- Save for retirement using the Thrift Savings Plan
- If deployed, use the Savings Deposit Program
However, it’s one thing to create a budget and plan, and quite another to follow through on your best intentions. Begin to cut spending in areas that drain savings opportunities:
- Keep a daily record of all expenses. Then, analyze where you spent money needlessly, such as that latte on the way to work or eating out daily for lunch.
- Pay off high-cost debt immediately. Loans and credit cards with high interest rates, for example, can eat up savings fast.
- Stick to a budget for special occasions such as birthdays, vacation trips and holidays. Going into debt for these events is not worth it.
- Change shopping habits to reduce impulsive purchases that may set you back on budget goals.
Yet, oftentimes it’s difficult to squeeze more money out of your paycheck for monthly needs– let alone set aside money for bigger goals. A good strategy is to start small and look for simple ways to trim spending. Just changing your mindset can make a big difference:
Save loose change – .50 cents a day adds up to $180 per year
Bring your lunch to work more often – save approximately $5 per day that can be transferred to savings
Eat out two fewer times a month – save $30 per month or $360 per year
Pay off credit card bills completely each month and on time to avoid spiraling interest and late fees – $25 per month or $300 per year
These tips are just the beginning. If you want more resources and ideas, go to www.militarysaves.org and begin your journey to financial security.
Military Saves Week Guest Article for MilitaryShoppers.com
by Don Giles
President, Armed Forces Bank