I stare at the credit card bill, then look at my bank balance on the screen in front of me. How could this be? Again, I cannot make the minimum payment. My pay shows in the transaction list. Is it the right amount? I don’t know. I’d worked overtime recently, but my pay doesn’t’ seem much more than usual. I sigh, feeling defeated. Every month I vow to pay the credit card bill in full, but never do. Each month more interest and late fees accumulate. At this rate, I will never be able to stop working.
Rent was paid, thank goodness. But we need to eat, and gas the car. I still haven’t made last month’s car payment. I worry that someday the car will be repossessed. Then how would I get to work? And the kids to soccer practice? Reaching into my pocket to check for cash, I remember I’d spent it last night taking the kids and their friends out for pizza and a movie. I shake my head in frustration. Why were we always out of money at the end of the month?
FINANCIAL AND RETIREMENT PLANNING
Financial worries can affect anyone. The cost of civilian life might be higher than expected. Post-service income might be lower than expected. Both can cause financial worries. Financial and retirement planning can help address these worries.
Set Goals
Setting goals helps you see where you want to be financially. Common financial goals include reducing debt, saving to buy a home, and saving for retirement. Click here (https://www.nerdwallet.com/article/finance/how-to-set-financial-goals) for goal setting guidance from NerdWallet or here (https://www.clevergirlfinance.com/blog/examples-of-financial-goals/) from Clever Girl Finance.
Budget
A budget is a spending plan for how you will achieve your financial goals. Start by identifying all your income and expenses. Review your budget to see if you can find unnecessary costs. Be sure to include all sources of income. For help, watch the below budgeting video from the Department of Labor’s financial planning series.
Click here for budgeting tips, video, and template from the Navy Federal Credit Union MakingCents website, www.navyfederal.org/makingcents.
Manage Debt
Many people have some form of financial debt such as a home mortgage, student loan, or unpaid credit card balances. How you manage debt determines whether debt is helpful or harmful. High interest rates and late-payment fees can impede reaching financial goals. Click here (https://militarysaves.org/images/stories/pdf/materialstepbystep.pdf)for steps to managing problem debt from Military Saves, and here from Investopedia (https://www.investopedia.com/personal-finance/digging-out-of-debt/).
Save & Invest
The Balance.com defines saving as “the intentional act of setting money aside for a specific goal or purpose”. Common savings goals are an emergency fund, homeownership, and retirement nest eggs. Finding money to save may require a different job, a second job, or less spending. For some saving strategies visit the MilitarySaves Make a Plan: How to Save page (https://militarysaves.org/for-savers/make-a-plan-how-to-save), or the American Savings Education Council Savings Resources — ASEC page (https://www.asec.org/services-5).
Investopedia says, “savings can be used to increase income through investing”. The military Thrift Savings Plan (TSP) and civilian 401(K) are retirement savings methods that allow for investment growth. Both plans have legal requirements regarding contributions, taxation and withdrawals. Clickhere (https://themilitarywallet.com/tsp-leave-military-civil-service/) for suggestions from The Military Wallet and here from tsp.gov (https://www.tsp.gov/living-in-retirement/ ) on managing your TSP once you leave service. Click here for 401(k) basics from The Motley Fool (https://www.fool.com/retirement/plans/401k/).
Other retirement plans like IRAs (Individual Retirement Account) are also options for saving and investing. You can also invest outside a retirement plan. Read 9 Steps to Begin Retirement Planning | Military.com (https://www.military.com/money/retirement/second-retirement/9-steps-for-retirement-planning.html) and Save and Invest | Investor.gov (https://www.investor.gov/introduction-investing/investing-basics/save-and-invest) for more information. Visit this site, Retirement Savings Toolkit | U.S. Department of Labor (dol.gov) (https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/retirement-savings-toolkit ) for a variety of saving and retirement planning guides.
Financial worries can seem overwhelming. Financial and retirement planning resources and support can help sort things out. Click here to listen at the Know A Vet? website to veterans sharing their financial issues and how they tackled them.
ADDITIONAL RESOURCES
- Military Money Show on Apple Podcasts
- Military Guide – The Military Guide To Financial Independence (the-military-guide.com)
- Retirement and Financial Literacy Education Program (RFLEP) – Office of the Chief Human Capital Officer (OCHCO) (va.gov)
- Veterans Financial Coalition
Article Sources
Alexander, F. (2021, January 9). Creating a financial planning process for yourself. Clever girl finance. Retrieved January 22, 2020 https://www.clevergirlfinance.com/blog/financial-planning-process/
American Savings Education Council (n.d.) Savings resources. ASEC. https://www.asec.org/services-5
Cusson, M.P. (2020, November 11). Financial planning for veterans. Investopedia. Retrieved January 20, 2021 from https://www.investopedia.com/articles/financial-advisors/011415/financial-planning-veterans.asp#:~:text=Key%20Takeaways%201%20When%20military%20veterans%20separate%20from,in%20which%20vets%20are%20likely%20to%20need%20help
Employee Benefits Security Administration (n.d.). Retirement savings toolkit. U.S. Department of Labor. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/retirement-savings-toolkit
Guina, R. (2018, September 12). What should you do with your TSP when you leave the service? The Military Wallet. https://themilitarywallet.com/tsp-leave-military-civil-service/
Hagen, K. (2020, December 11). 401(k) basics: everything you need to know. The Motley Fool. https://www.fool.com/retirement/plans/401k/
Lewis, M.R. (2020, June 12). How to do your own financial planning. wikiHow. https://www.wikihow.com/Do-Your-Own-Financial-Planning
Military.com (n.d.) 9 steps to begin retirement planning. https://www.military.com/money/retirement/second-retirement/9-steps-for-retirement-planning.html
Military Consumer (n.d.). Military consumer, your tool for financial readiness. Retrieved January 20, 2021 from https://www.militaryconsumer.gov/
Military Saves (n.d.). For savers. Retrieved January 20, 2021 from https://militarysaves.org/for-savers
Navy Federal Credit Union (n.d.). Improving personal finances. MakingCents. https://www.navyfederal.org/makingcents/knowledge-center/financial-literacy.html
Principal (n.d.). Build your own financial plan: a step-by-step guide. https://www.principal.com/individuals/build-your-knowledge/build-your-own-financial-plan-step-step-guide
Securities and Exchange Commission Office of Investor Education and Advocacy (n.d.). Save and invest. Investor.gov. https://www.investor.gov/introduction-investing/investing-basics/save-and-invest
The Balance (n.d.) Budgeting and personal finance. https://www.thebalance.com/budgeting-4074043
Thrift Savings Plan (n.d.). Living in retirement. https://www.tsp.gov/living-in-retirement/
Uyeno, J. (2019, January 26). Why is a personal budget important? The Nest. https://budgeting.thenest.com/importance-roles-budget-24912.html
Voight, K., Benson, A. (2020, December 11). What is a financial plan, and how can I make one? Nerdwallet. https://www.nerdwallet.com/article/investing/what-is-a-financial-plan
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