February just begs for an article about love.
For past Februarys, I’ve written about Valentine’s Day gifts for the one you love, protecting your Valentine’s Day gift and even taking care of the ones you love. This month, I’m taking love in a different direction with five financial expressions that set my heart aflutter.
Integrating some of these into your own plan may help make you more financially secure for many Valentine’s Days to come. And that gift of stability is something your sweetheart will likely appreciate.
1. Saving Big
This one is top of mind because I just got off the phone with a young service member who was stashing 13 percent of her earnings into her Thrift Savings Plan and another 10 percent into a short-term savings account. My reaction: Wow! USAA’s view is that you should start by investing 10 percent for retirement and an additional 5 percent for savings. I know that can be a tough, however, so I often encourage people to start small — even with 1 to 2 percent — to have something to build on. But if you can pull off big savings like the service member I recently spoke with, even better.
2. Being Financially Ready
As someone who spends a lot of time coaching military personnel about financial matters, I’m fired up about all the energy, effort and resources the DoD is directing toward helping military members make smart financial decisions. Much of that is related to the arrival of the new Blended Retirement System in 2018, but no matter the reason, anything that moves the needle is encouraging. Take advantage of the available education and counseling, whether it’s offered by the Defense Department or your installation.
3. Earmarking
I know a lot of folks — myself and my wife included — who have multiple bank accounts. We’ve named each for specific goals, and money comes straight out of our paychecks into each one. For us, the accounts are New Home (since we’re moving in sometime in 2017), Family Vacation and, yes, Vegas (for my bride and me). Whether setting aside money for birthday or holiday gifts, a car down payment or much-needed time off, make it easy on yourself by setting up a system to earmark your savings.
4. Teaming Up
Throughout the past six months, I have attended numerous military spouse events. These days, it seems like more spouses are deeply involved in both everyday family finances and longer-term decisions and planning. That’s a beautiful thing. If you’re not yet involved, you should be. It makes for a more harmonious financial plan if you and your partner are singing from the same sheet of music.
5. Starting Early
You’ve seen charts that show how just a little each month can grow into a big pile of money with time and compound returns. Studies, surveys and anecdotal conversations lead me to believe more and more young people are leveraging their greatest asset: time. But if you didn’t get a head start, don’t let that stop you. To illustrate, I’ll hijack a Chinese proverb that answered the question, “What’s the best time to plant a tree?” The best answer was 20 years ago, but the second best time is now. The same applies to building for the future through saving and investing.
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