April is Military Saves Month – a time to encourage the entire military community to put aside funds for the future and gain new financial ground. Coordinated by the Consumer Federation of America, the Military Saves program is dedicated to helping service members and their families reduce debt and build wealth.
Here are some quick tips to help you get on the path to more savings and improved financial security.
Make Your Savings Automatic
Budgeting for the month and staying on track can be stressful and time-consuming. To have the reassurance of knowing you're tucking a little away for the future, set up automatic transfers from your checking to savings account on payday.
“If you aren’t currently taking advantage of automatic transfers, now is a great time to start as it makes saving easy and efficient,” said Jaspreet Chawla, senior vice president of savings products at Navy Federal Credit Union. “And if you already have a portion of your checking account funds transferred automatically to savings, consider upping the amount and upgrading to a money market account for additional dividends.”
Prioritize Building an Emergency Fund
When you have a safety net for unexpected expenses, you don’t have to worry about throwing your budget out of whack. You can be confident that you’re prepared to handle the unexpected costs of a car breakdown, home repairs or medical expenses, for example, that could pop up.
“There’s a good chance you have a ton of stuff in your house that you aren’t using much anymore,” said Rosemarie Groner, blogger behind The Busy Budgeter and Army veteran spouse. “It’s not only taking up your valuable space, but they could be used to finance your emergency fund.”
So how much goes into a rainy day fund? Three to six months of living expenses is ideal. However, it’s best to start with a small goal, such as $500, and increase your goal as you get into the habit of saving.
Save for the Future You
The first thing you should do when planning your retirement savings strategy is to find out if your employer offers a 401(k) match. If they do, allocate as much of your budget as needed to take full advantage of that option. Also, explore any special retirement account offers through your financial institution.
“There’s no denying that investing early can be a key component in a financially secure retirement,” said Kevin Driscoll, vice president of Navy Federal Investment Services. “Anyone just beginning their savings journey should keep their investments simple, contribute money consistently and monitor long-term returns.”
Debt Reduction Is Key to Savings
Keep chipping away at it month by month. With some savvy planning, reducing your debt can be less daunting than you think. Another key to reducing debt is managing your budget better. This also gives you a better idea of your debt-to-income ratio.
“You should be evaluating your budget regularly to make sure it’s always realistic for your family’s situation,” said Anne Marie Ferdinando, member outreach manager at Navy Federal. “Create a list and write down your assets: how much is in your bank accounts, retirement account, investment account, etc. Then do the same for your debts: credit card, student loans, car loan, mortgage, etc. Taking stock of where your finances currently sit can help you set important projections for the month ahead.”
Saving Is a Family Affair
Getting married and starting a family are great times to look at your future and put together a plan for managing joint finances.
“I recommend scheduling money dates once a week or once a month [depending on how you and your spouse like to handle finances],” said Corinne Schmitt, Marine veteran spouse and creator of Wondermom Wannabe. “Set a day and time to go over accounts and bills together on a regular schedule.”
Being financially resilient is more than having access to money; it includes being conscious of your own financial landscape, being aware of available resources and being willing to seek out opportunities that will support your financial wellness. Improving your savings, day by day, is probably the easiest and best way to do it.
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Navy Federal Credit Union is federally insured by the National Credit Union Administration (NCUA).