If the thought of picking a military retirement option has you considering your family’s future, the good news is that it is never too early to start planning and saving. As Josh Andrews, Director of Military Life Advice with USAA, noted in the previous article, retirement is the biggest bill everyone faces in life. But following these five steps can give you a head start on having the funds you’ll need to meet all of life’s unexpected and planned-for events.
1. Create a monthly budget. Andrews recommends having a budget meeting each month. You could make it a date night or involve the whole family. “A family meeting is a great way to introduce kids to the idea of budgeting and saving practices,” he shared, “by modeling those behaviors for them.” As you make your budget, consider the next steps:
2. Prioritize your expenses. According to Andrews, at the top of your expense list should be everything that protects you or your family. Your insurance – home, medical, automobile, etc. – would be listed here. He also suggests including an emergency fund, which is accessible money equal to 3-6 months of your basic living expenses. “If you don’t have that now, start small by trying to get savings up to $1000 and then keep adding to that emergency pot,” Andrews said. He also includes retirement savings as a top expense because “It’s never too early to start saving; it gives you more time to accumulate funds, even if it’s just $25 a month as you start,” he noted.
3. Plan for individual and family needs. Whether it’s braces for children, a new car or car repairs, even Christmas spending, Andrews says after the priority expenses, include saving for future needs in your budget. It can be a helpful way to avoid creating out of control credit card use. “By prioritizing and planning for life’s events, you can help reduce your personal debt,” he advised.
4. Agree and support the budget. This may be the hardest step in the process Andrews admitted. “Be willing to compromise to keep in financial harmony, especially if you are a spender married to a saver,” he shared. “Learn to live within your means; if you don’t have the cash, don’t spend it. The only way to get ahead financially is to make sure your monthly expenses are less than your monthly income,” Andrews added.
5. Don’t forget the occasional treat. Creating and following a budget plan shouldn’t be torture for you or your family Andrews noted. “If you are following your budget make sure to treat yourself but be sure the treat doesn’t undo all of your budgeting work,” he said. Andrews explained that like dieting, if you don’t factor in an occasional treat it is easy to become discouraged. “Maybe it’s dinner at the fancy restaurant you’ve been meaning to try or a weekend getaway for the family,” he said, “Just don’t go into debt to treat yourself.”
The most important step of all according to Andrews it to stay committed to your budget. You can only reach your goal of financial fitness by following through on your plan. For resources on how to set up a monthly budget, you’ll find tools at usaa.com under the Advice tab – click on the Saving and Budgeting option under Financial Resources. You’ll also find helpful tips on the Military Saves website – https://militarysaves.org/. So what are you waiting for? There’s no better time than now to become Financially Fit!