April is Military Savings Month – a time to encourage the entire military community to set aside funds for the future and gain financial traction. Coordinated by the Consumer Federation of America, the Military Saves program is dedicated to helping military members and their families reduce debt and build wealth.
Here are some quick tips to help you save more and improve your financial security.
Make your savings automatic
Budgeting for the month and staying on track can be stressful and time consuming. For the reassurance of knowing you’re saving a little for the future, set up automatic transfers from your checking account to your savings account on payday.
“If you’re not currently taking advantage of automatic transfers, now is a great time to start because 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 some of the funds in your checking account automatically transferred to savings, consider increasing the amount and switching to a money market account for additional dividends.”
Prioritize the creation of an emergency fund
When you have a safety net for unexpected expenses, you don’t have to worry about messing up your budget. You can be sure that you are prepared for the unexpected costs of a car breakdown, home repairs or medical bills, for example, that may arise.
“Chances are you have a ton of stuff in your house that you don’t use much anymore,” said Rosemarie Groner, blogger behind The Busy Budgeter and wife of an Army veteran. “It’s not only taking up your valuable space, but it could be used to fund 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, like $500, and increase your goal as you get into the saving habit.
Save for the future
The first thing to do when planning your retirement savings strategy is to find out if your employer offers a 401(k) match. If so, allocate as much of your budget as necessary to take full advantage of this option. Also explore special retirement account offers through your financial institution.
“There’s no denying that investing early can be a key part of a financially secure retirement,” said Kevin Driscoll, vice president of Navy Federal Investment Services. “Anyone just starting to save should keep their investments simple, contribute regularly, and watch long-term returns.”
Debt reduction is the key to savings
Keep snacking on it month after month. With the right planning, reducing your debt can be less daunting than you think. Another key to reducing debt is to better manage your budget. It also gives you a better idea of your debt-to-income ratio.
“You should evaluate your budget regularly to make sure it’s still realistic for your family’s situation,” said Anne Marie Ferdinando, member outreach manager at Navy Federal. “Make a list and write down your assets: how many are in your bank accounts, retirement account, investment account, etc. Do the same for your debts: credit card, student loans, car loan, mortgage, etc. where your finances currently stand can help you make important projections for the month ahead.
Saving is a family affair
Getting married and starting a family are good times to consider your future and develop 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, Navy veteran wife and creator of Wondermom Wannabe. “Set a day and time to review accounts and invoices together on a regular schedule.”
Being financially resilient is more than having access to money; it involves being aware of your own financial landscape, being aware of the resources available, and being willing to seek out opportunities that will promote your financial well-being. Improving your savings, day by day, is probably the easiest and best way to do it.
Why wait… Start saving now!
If you haven’t started yet, use Military Savings Month as an opportunity to make a pledge to start what will be a lifelong process to put aside some more. Navy Federal also has a list of a dozen money-saving tips for family life that you can start working on this month.
Navy Federal Credit Union is federally insured by the National Credit Union Administration (NCUA).
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