By Lila Quintiliani, AFC®
Military Saves Assistant Coordinator
There are lots of folks who believe that because they make a small salary, there is no way for them to save. “I pay my rent and my bills,” I’ve had people tell me, “and there’s just nothing left over.” Well, our newest success story is proof positive that there IS a way for individuals and families to save no matter their income level. Staff Sergeant Robert Zuniga is the only breadwinner for his family, yet they have a healthy 3-6 month emergency fund, have no car payments, max out contributions to his and his wife’s Roth IRAs, and are on goal to pay off their 30 year mortgage in only 12 years. You can read Staff Sergeant Zuniga’s inspiring story here.
How does he do it, you ask? Well, I think the takeaway from his tale is that there isn’t a single thing that he does that has led to his success. Rather, there are MANY things that he and his family do that have set them on the path to financial freedom.
Make a budget. Zuniga has a spreadsheet where he tracks his expenditures and makes sure he budgets for the “unexpected” stuff. If you’re not an Excel guru, though, a sheet of notebook paper can be just as effective.
Keep an emergency fund. Zuniga and his wife socked away a sizeable emergency fund. So then when their house got flooded and they suddenly had to move in to base housing (and thus lost their housing allowance), they still were able to cover their mortgage payments.
Emphasize education. Zuniga and his wife have both gone out of their way to further their education. That’s a smart move, because college grads have a greater earning potential. In fact, a recent study by the Mitchell Institute in Maine showed that college grads in that state earn as much as 50% more than those with no degree.
Save for retirement. Zuniga and his wife both have Roth IRAs. Having individual retirement accounts (in addition to employer-sponsored accounts) is a good idea. Many service members don’t have any type of account, figuring that they’ll put in twenty years and then have a pension. But it’s always a good idea to not put all your eggs in one basket. And this way, his wife will have an account in her name, as well.
Cut back where you can, and then you’ll have more money to spend on stuff you really want. Zuniga mentions many areas where he and his family cut back (they make their own toiletries, for gosh sake!) BUT there are just as many areas where they splurge – massages, vacations, home furnishings. The point is, they have figured out the things they truly want to spend money on and have sacrificed in other places.
So the Zunigas truly seem to have figured out where their priorities lie, and that has helped guide them to a measure of financial success. Hopefully, their story will inspire others to do the same.