WHAT TO SAVE FOR

Make a pledge to yourself and create a simple savings plan that works. Complete the Pledge and Military Saves will send you short email and text reminders, resources and tips to keep you on track towards your savings goal.

Savings Goal:

Emergency fund

Nearly a quarter of savers who take the Military Saves pledge chose “emergency savings” as their first wealth-building goal. And they have the right idea. Research shows that low-income families with at least $500 in an emergency fund were better off financially than moderate-income families with less than this amount. Yet most Americans don’t have enough savings to cover an unexpected emergency.

What is an emergency savings fund?

An emergency savings fund consists of at least $500, usually in a savings account that you do not have easy access to. Saving for this fund starts with small, regularly scheduled automatic contributions that build up over time.

Why should you start saving for emergencies?

Maintaining an emergency savings account may be the most important difference between those who manage to stay afloat and those who sink in debt. It also gives you peace of mind knowing that you can afford to pay unexpected expenses. That’s because keeping $500 to $1,000 of savings for emergencies can allow you to easily meet unexpected financial challenges such as repairing the brakes on your car or replacing a broken window in your house.

Not having emergency savings is one of the reasons many individuals borrow too much money, resort to high-cost loans, or increase their credit card balances to high levels.

How should you build your emergency savings?

The easiest and most effective way to save is automatically. This is how millions of Americans save. Your bank or credit union can help you set up automatic savings by transferring a fixed amount from your checking account to a savings account. Learn more about saving automatically

Where should you keep your emergency savings?

It’s usually best to keep emergency savings in a bank or credit union savings account. These types of accounts offer easier access to your money than certificates of deposit, U.S. Savings Bonds, or mutual funds. Though these are useful tools for long-term saving, they are not ideal for an emergency fund that you may need access to more quickly. But not too quickly! Keeping your money in a savings account makes it much less likely that you will use these savings to pay for everyday, non-emergency expenses. Out of sight, out of mind. That’s why it is usually a mistake to keep your emergency fund in a checking account.

Your local America Saves campaign can help you find a participating financial institution that offers low- or no-minimum balance savings accounts.

How can you get started?

Those with a savings plan are twice as likely to save successfully. This includes setting a goal to build an emergency fund and deciding how much you want to save each month. This is where we come in. If you’re ready to make a commitment to yourself to save, take the Military Saves pledge to save money, build wealth, and reduce debt. We’ll keep you motivated with information, advice, tips, and reminders to help you reach your goal to build an emergency fund.

Savings Goal:

Retirement

Retirement savings is a top priority for many Savers. Saving now for retirement will ensure that you have enough money to enjoy a comfortable standard of living when you stop or reduce the amount of hours you work.

You may be able to save for retirement at your workplace through a 401(k) plan. These accounts have many benefits including direct deposit from your paycheck, which automates the savings process and may include matching funds. Unfortunately, many do not have access to an employer-sponsored retirement plan, such as a 401(k) plan. Even if your employer doesn’t offer a retirement plan, you can still save for retirement, by putting money in an Individual Retirement Account (IRA).

Keep in mind that slow and steady wins this race. Even modest monthly contributions to a retirement account for 30 to 40 years can, in part because of the miracle of compound interest, easily lead to an accumulation of several hundred thousand dollars.

Savings Goal:

Investment Savings

More and more people who take the Military Saves pledge are choosing investment savings as their goal. Making investments can build wealth over time more reliably than using a savings account, but it also involves risk. So, it’s important to educate yourself. Here are some resources to help.

Before you start comparing investment options, learning about some basics like asset allocation, diversification, and risk tolerance will help you decide which to choose.

Investment Options

According to the SEC, stocks, bonds, and mutual funds are the most common types of investments. Other options include annuities, exchange-traded funds, money market funds, and U.S. Treasury securities. The SEC provides details about various investments. FINRA, an independent organization that also regulates the securities industry, provides a helpful overview of different types of investments. 

Making Your Investment

After learning some basics, it’s time to decide how you want to invest your money. The SEC can help you decide whether to invest on your own, or hire a broker or adviser. If you decide to use a professional, you should make sure that your broker or adviser is a fiduciary, which means they owe you legal duties to serve your best interest. Not all financial professionals are legally required to be a fiduciary. If the financial professional you work with is not already legally required to be a fiduciary, make sure they sign this fiduciary oath, agreeing to act as a fiduciary under the law. You can find fiduciary financial professionals at CFP BoardFinancial Planning Association, and National Association of Personal Financial Advisors (NAPFA)FINRA and NAPFA offer step-by-step guides for evaluating financial professionals.

Protecting Yourself from Investment Pitfalls

Fees

To get the most out of the money you invest, it’s important to understand the fees. The more you pay in fees, the lower the return on your investment.

Fraud

Unfortunately, investment fraud like Ponzi schemes and advance fee scams are a fact of life. You may stumble across some fraudulent investment offers as you research your options. Make sure you know how to avoid losing your hard-earned money to fraud by following the advice of the BBBFINRA, and the SEC.

Savings Goal:

Vacation

Vacation anyone? Summer is fast approaching so you might be gearing up for your next trip. Luckily, you don’t have to be rolling in dough to travel! Here are some tips to help you save money on your next getaway.

1. Book ahead. Travel deals are easier to find when you book ahead. Give yourself at least a few months to plan so you can snag the best deals. This will give you enough time to compare prices and choose the most affordable. If you’re traveling within the country, you can also compare the cost of air fare to the price of taking a bus, train or rental car. If you’re flying, you can mix and match your flights by booking one-way trips separately, sometimes with different airlines. This is a great way to fly at the lowest rate.

2. Travel during off season. If you’re traveling someplace tropical, go during “rainy season” or during the months that aren’t so popular for vacation. Air fare tends to increase during spring break or in the summer because most people plan for vacation around that time. Typically, you can find lower prices from mid-January to mid-March.

Tip: Rainy or snowy season varies depending on the region you’re looking to visit, so do your research!

3. Get a travel rewards card. Many credit cards offer travel points that go towards your next trip. You can even rack up enough travel rewards to cover the entire cost of your vacation. Granted, that would take some time, but it’s possible! Only open a travel rewards card if you can afford to pay your credit card bill in full each month. Typically, cards that offer the best rewards have high interest rates. Be sure to do your research and look at the interest rate before you sign up for a new card. Whatever you do, don’t accrue credit card debt just to take a trip.

4. Ditch the fancy hotel for a cheaper night’s stay. Try substituting a hotel with an AirBnB. AirBnB allows you to rent an apartment or private room in someone’s home. Prices are usually a bit lower than the cost of hotels. You can also try CouchSurfing to find a host that will welcome you into their home and show you the local attractions. Not only does this save money, but it makes for a unique travel experience.

5. Be flexible. The most important tip to saving money under any circumstance is to be flexible. This means you should be willing to take the cheaper route every chance you get. If flying out of an airport that’s slightly further will save you money, go with the further airport. If you’re staying somewhere that has a kitchen, make at least one meal a day yourself to save money on dining out. If you can use the public transportation in the area you’re staying, go with that instead of renting a car. The list of ways to be flexible goes on, but trust me, being flexible will always save you money.

6. Have fun! Make the most of your vacation by scheduling activities to do while you’re away. Again, if you book your trip early, you’ll have enough time to find the cheapest activities and attractions in the area.

Let Military Saves help you save money so you can feel confident about your finances during your next vacation. It all starts when you make a commitment to yourself to save. Take the first step today and take the Military Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. Military Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.

Savings Goal:

Education

Saving for education is the second most popular goal (after saving for emergencies) savers select when they pledge to save with Military Saves. There are many different things to factor in when saving and paying for college.

According to the College Board, the average cost of tuition and fees for the 2015–2016 school year was $32,405 at private colleges, $23,893 for out-of-state residents attending public universities, and $9,410 for state residents at public colleges. The average cost of room and board in 2015–2016 ranged from $10,138 at four-year public schools to $11,516 at private schools.

Here are some ways you can minimize the cost of college:

  • Grants and scholarships are often called “gift aid” because they are free money – financial aid that doesn't have to be repaid. Grants are often need-based, while scholarships are usually merit-based.
  • According to the College Board, the average community college costs $3,435 and the average student received enough grants and tax breaks to cover the typical tuition and all but $10 of the average $1,230 bill for textbooks and school supplies. Attending this type of college for your first two years can save you thousands of dollars.
  • Earning money while you attend school is one way to help keep costs down – especially if you don’t have enough saved to pay for college in full. Any money you earn is money you don’t need to borrow.
  • Provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to the student’s course of study.

Here are some ways to save for college:

  • A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.
  • The Education Savings Bond Program permits qualified taxpayers to exclude from their gross income all or a portion of the interest earned on the redemption of eligible Series EE and Series I bonds issued after 1989.
  • If you need to borrow money to pay for college or career school, start with federal student loans.

Savings Goal:

Large Purchase

Think and acting like a saver not only means knowing what you’re saving for and how much it costs, but having a plan for building that savings. Whether you’re saving for a phone, a computer, a car, or college, this 41 second video from Military Saves can help you get good savings habits started.

Savings Goal:

Debt Repayment

Getting out of debt is the #3 goal Savers select when they pledge to save. That does not come as a surprise since a 2012 survey showed that 45% of families with annual incomes under $50,000 rely on credit cards to pay for basic needs such as rent, utilities, insurance and food. Large consumer debts can also keep you from saving and building wealth.

The good news is that there is hope. With planning, discipline, patience, and maybe some outside help, almost anyone can reduce their debts and start to accumulate wealth.

Are you in Trouble?

If you answer “yes” to any of the following questions, then you probably need to get your debts under better control:

  1. Can you only afford to make minimum payments on your credit cards?
  2. Do you worry about finding the money to make monthly car payments?
  3. Do you borrow money to pay off old debts?
  4. Have you used a home equity loan to refinance credit card debts, then run up new revolving balances on your cards?

Savings Goal:

Housing

Almost anyone can afford to own a home with proper preparation. Develop a savings plan to build up money for a down payment at purchase, for moving expenses, and for post-purchase emergency expenditures such as needed home repairs. Remember, the larger your down payment, the lower your home loan payment. Military Saves can help you develop a plan with regular monthly deposits in a bank or credit union account. At the same time, reduce your credit card and other debts in order to increase your ability to afford a house. Lowering these debts will increase your credit score and your chances of getting a lower-interest loan. For information about credit and help with debt repayments, contact your local, nonprofit consumer credit counseling service or housing counseling agency.

Get qualified for a home loan before you look for a house, condo, or co-op. That will give you some idea of whether you can afford to purchase a home and, if you can, at what price. Make certain you contact at least three lenders, including your primary financial institution. This will help ensure that you get the least expensive loan for which you can qualify. Be especially skeptical of uninvited loan offers you receive through the mail, by telephone, or online. In looking for a home, most home buyers find it helpful to work with a real estate agent. Consider using an agent that will work solely for you as a buyer representative. 

The larger your down payment, the lower your home loan payment. The most effective way to save a larger down payment is to set aside a portion of each paycheck. With direct deposit, your employer can split your paycheck between checking and savings accounts.  Or, ask your bank or credit union to regularly transfer a certain amount from your checking account to your savings account. Also, ask your financial institution about other savings products that can help you save more. If you need assistance finding money to save, check out our savings tips and strategies!

Savings Goal:

Transition fund

Military families move all the time, but to prepare for a life of moves, you need to know what to expect both before and after a move. That means asking a lot of questions and doing some research. Know the costs involved, make a PCS (Permanent Change of Station) plan, and set aside funds specifically ear-marked as a PCS fund.

The following tips can help you plan financially for your next move.

  • Get on the same page. Start by talking with your spouse about your family's finances. The FINRA Foundation offers eight steps to help you initiate a discussion that is productive and may prevent potential financial difficulties.
  • Close out and transfer accounts. Make a list of all your financial accounts. Note which accounts may be transferred to your new location and which ones need to be closed and reopened. Moving to a new location may provide an opportunity for lower rates on some financial products such as auto insurance, homeowners, or renters insurance. 
  • Pay all your current bills. To avoid negative impact on your credit, be sure to pay all close-out bills promptly, such as electricity, water, or other utility bills. Provide all organizations with a forwarding address for any unpaid bills that post after the move.
  • Compare the value of your housing allowance. As you create a budget detailing expected income and expenses at your new duty station, be sure to compare current and future Basic Allowance for Housing (BAH) to determine how much house you can afford. Make sure you keep utility costs in mind, too. Use the BAH Calculator from the Defense Travel Management Office to find out your specific allowance.
  • Save those receipts! Be sure to keep all your receipts—including expenses that don't qualify for reimbursement because they may qualify as tax deductions.
Helpful Transition Fund Links:

Savings Goal:

General Savings

It can be hard to put aside money for savings. But there is an easy way to save money without ever missing it. Make your savings automatic. You can start small and save $20 a week or month or you can try and save more.

How to save automatically

  • Many employers allow you to divide your paycheck into different accounts. Take advantage by putting part of your pay into a savings account.
  • If you get paid in cash, take a small amount to the bank to deposit into a savings account. Many banks make this easy by allowing you to deposit cash directly at an ATM. Tip: do this the day you get paid. That way you will be less tempted to spend the money.

Why automatic savings works

  • Saving automatically makes it easier to save because your money is saved with each paycheck – you don’t have to think about how much to save or take any additional steps.
  • It’s tempting to spend money when it’s readily available. If you don’t see the money, you are less likely to miss it.

I don’t have enough money to save

Everyone has the ability to save. At Military Saves, we say “Start Small, Think Big.” You can start with only $10 a week or month. You have to start somewhere. When you get extra income, you can add that money to your account as well:

  • Put a portion of your tax return money into savings.
  • Put birthday or holiday money into savings.
  • Hold a garage sale and put that money into savings

Over time, your deposits will add up. Even small amounts of savings can help you in the future.

Do you save automatically? Let us know on our Facebook page.

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Make a Plan: How to Save

When it comes to saving money, the sooner you start, the better. It's not an act that's accomplished overnight, but a process that happens gradually and grows over time. Just remember, Start Small, Think Big.

ADDITIONAL RESOURCES FOR SAVERS


What's New?

COVID-19

COVID-19 Resources

Military Saves is committed to ensuring military families have the information they need for their well-being. Here is a list of savings resources to help during the COVID-19 (Coronavirus) crisis. This page is being updated as new resources come in.

7 Side Hustles to Boost Your Savings This Summer

May 2019 Digital

4 Money Tips for Military Spouses

June 2019 Print

Financial Planning Through all Phases of Separation

July 2019 Print

6 Travel Hacks for Military Conference Season

August 2019 Digital

5 Ways to Save on Your Back-to-School Shopping

August 2019 Digital

Giving Back

October 2019 Print

Prepping Finances for Post-Military Life

November 2019 Print

Making the Health and Wealth Connection in 2020

December 2019 Print

Mastering Willpower

January 2020 Print

Mission: Save for travel, save while you travel

February 2020 Print

5 Tips For Saving Money When You're Broke

April 2020 Digital

4 Things Every Spouse Should Know About Their Finances

June 2020 Print

Should You Save for Your Kids Education or Your Retirement?

August 2020 Digital

How To Save When You're Living From Paycheck To Paycheck

September 2020 Digital