Managing one's finances can prove a challenge for returning veterans—and for the rest of us, too. Here are four principals for managing money we could all benefit from.
- Posted on Oct 3, 2016
The Warriors to Summits program helped Adele Loar deal with the emotional and psychological challenges of civilian life, but returning veterans like her also have to deal with practical matters, including finances. Here are some key principles for successful money management—for returning troops, and for the rest of us.
1. Make saving a habit. Every time you receive money, set some aside. Automatically deposit a percentage of your income into a savings account. Start small, with an amount that’s comfortable for you, even if it’s as little as five percent, and increase it with time. To save for retirement, take the tax advantages of a 401(k) or a Roth IRA.
2. Spend smart. Budgeting should be an everyday activity, one that involves all the decision-makers of the household. Set aside money each week for larger expenses that you know are coming up, such as car repairs, appliances or holiday gifts. To decide whether a purchase is necessary, ask yourself, “What would happen if I don’t buy it now?” Review your bank and credit-card statements regularly; they will remind you where your money is going.
3. Use credit wisely. Shop for a credit card with a low annual fee and interest rate. Pay off your balance as quickly as you can. If you apply for a loan, look for a lender with a good reputation. Understand the terms of the loan agreement before you sign. Every time you borrow money and keep your promise to pay it back, you are strengthening your ability to borrow the next time. If you find yourself in trouble with debt, take action early. Call your lender and work with it to decide your next steps. Or contact the National Foundation for Credit Counseling at debtrelief.nfcc.org/military.
4. Bank on it. Find a financial institution that offers safe, secure and convenient services. Get to know your options. Savings accounts are a great place to set money aside to grow for the future. For paying your monthly bills and making day-today purchases, a checking account is better. Keep your receipts and record your transactions. That will help you avoid overdrafts. Take advantage of services your bank may offer—like online banking, mobile banking, direct deposit and automatic transfers.
For more expert advice, order your free copy of our Financial Readiness booklet at guideposts.org/financialreadiness.