February just begs for an article about love.
For past Februarys, I’ve written about Valentine’s Day gifts for the one you love, protecting your Valentine’s Day gift and even taking care of the ones you love. This month, I’m taking love in a different direction with six financial expressions that set my financial planner heart aflutter.
Integrating some of these into your own financial love plan may help make you more financially secure for many Valentine’s Days to come. And that gift of stability is something your sweetheart will likely appreciate.
Saving Big. This one is top of mind because the pandemic has challenged us on this front. USAA’s view is that you should start by investing 10% for retirement and an additional 5% for short-term savings. I know that’s been a tall order during the pandemic, but don’t throw in the towel. Keep the good habits going even if only in a small way. That will give you something to build on as we emerge on the other side.
Being Financially Ready. As someone who spends a lot of time talking to military families about financial matters, I’m fired up about all the energy, effort and resources the DoD is directing toward helping military members make smart financial decisions. Take advantage of the available resources, education, and counseling, whether it’s offered by the Defense Department or your installation.
Earmarking. I know a lot of folks — myself and my wife, included — who have multiple bank accounts. We’ve named each for a specific goal, and money comes straight out of our paychecks into each one. For us, the accounts are currently, “Ireland Trip” (we still have our fingers crossed that we will be able to take a great trip this fall) and “House Fund” (the projects will never end!). Whether setting aside money for an emergency savings fund, birthday or holiday gifts, a car down payment or much-needed time off, make it easy on yourself by setting up a system to earmark your savings.
Teaming Up. Over the last year, I have attended numerous virtual military spouse events to talk about financial issues. These days, it seems like more spouses are deeply involved in both everyday family finances and longer-term decisions and planning, not to mention surviving the economic challenges of the pandemic. That’s a beautiful thing. If you’re not, you should be. It makes for a more harmonious financial plan if you and your partner are singing from the same sheet of music and that starts with shared financial goals.
Draw a line in the sand. Successful relationships are typically characterized by couples who maintain their individual identity, but still work as a team. When it comes to purchases, big financial decisions (portfolio moves, insurance, etc.), and who is doing and managing what, I suggest you clearly delineate when individual autonomy is OK and when there’s a need to work in tandem. This line in the sand may move over the years, but it should be understood. The last year has highlighted how an approach like this – that requires discussion before action – can keep you out of financial trouble a knee jerk reaction or decision can cause when emotions are running high.
Starting Early. You’ve seen charts that show how just a little each month can grow into a big pile of money with time and compound returns. Studies, surveys, and anecdotal conversations lead me to believe more and more young people are leveraging their greatest asset: time. But if you didn’t get a head start, don’t let that stop you. To illustrate, I’ll hijack a Chinese proverb that answered the question, “What’s the best time to plant a tree?” The best answer was years ago, but the second-best time is now. The same applies to building for the future through saving and investing.
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