By Andia Dinesen, AFC ®, EVP Communications and Operations, Association of Military Banks of America
This Military Saves Week, take the Save The Extra challenge. Military life, your benefits, pay, raises, promotions, deployments, duties, special pay, etc. can provide a military family many opportunities to “save the extra” money that may find its way to you. There are many strategies to help you save more effectively and using the tips below may help you reach your saving goals much faster when you challenge yourself to Save The Extra! Take the Military Saves Pledge as your first step.
1. Save a portion of your extra. Challenge yourself to save a percentage of your extra before you start receiving the new pay. Whether you will save 50% or 30%, make a deal with yourself and stash that money away before you start getting used to the new income. (See tip 2 for ideas on where to save your money.) If you are feeling particularly comfortable in your current financial situation, challenge yourself to save 100% of your extra. However, we know you work hard, you will likely want a little of that extra money in your pocket, and maybe your expenses have increased, and the extra pay will help. But don’t forget to save at least some of it!
2. Where to save your extra. Start with an emergency fund. In an emergency situation, or when an unexpected expense that pops up, $500 can really come in handy. Once you have the first $500, continue adding to this account on a regular basis until you can save about 3 - 6 months in living expenses. Already have your unexpected expenses in order? Consider adding an additional 1%, 2%, or more to your TSP, start a spouse retirement account, or a ROTH IRA. See tip #4 for more helpful advice on how to prioritize.
3. Deployments. The Department of Defense offers a fantastic resource to help you save even more when you are on a deployment. The Savings Deposit Program is available to those in qualifying deployed locations* to save with a 10% yield! *Read more about the Savings Deposit Program at DFAS.org.
4. Meet with a financial counselor. There are many great benefits you receive as a servicemember and family member and access to certified financial counselors is one of those benefits. Financial counselors are available through your installation family readiness office and MilitaryOneSource.mil. Financial counselors can help you
prioritize your “save the extra” savings goals, debt payments, and help you make sense of all your finances.
5. Stop into your local military bank or credit union. Financial institutions on your installation work with their military customers every day and know what it is like to serve. Check to see what your financial institution can offer to help you reach your financial goals – especially during Military Saves Week – they may offer some great savings offers and accounts to help you save more effectively!
Whatever the case may be, you will likely receive some sort of pay increase this year. What will you do with that extra? Challenge yourself to save (at least a portion of) it!