By Hugo Escobar
Airman and Family Readiness Center
PETERSON AIR FORCE BASE, Colo. — When was the last time you reviewed your financial plan? Reviewing your financial plan should be done periodically to ensure you are on the right track. If you find out improvements are needed, what are you going to do?
The good news is that you are not alone. Developing a plan for your budget is the first step in being financially responsible. You can get free financial advice from agencies like the Airman and Family Readiness Center, Military One Source and your bank or credit union.
The second step in being financially responsible is having a healthy emergency fund. By having the emergency fund, you will likely endure less stress during an emergency since you can handle it financially. It is important to avoid making contracts with payday lenders that charge a very high interest rate for a loan. Instead, contact your service emergency organization such as the Air Force Aid Society, Army Emergency Relief or Navy-Marine Relief Society.
How much debt do you have? Do you know how much you are paying in interest every month? If your goal is to reduce your debt, you can do it! The third step to being financially responsible is having a plan to reduce your debt. Two ways to reduce your debt is to attack the account with the highest interest first. Another way is to go after the account with the lowest balance. When you pay off that account, charge after the next account. Your debt will then be reduced as long as you don’t further use your credit accounts.
Are you making investments? The fourth step in being financially responsible is to build wealth. You can build wealth by investing, having equity in your home and saving money. By not having debt, you can use that money for long-term investing in plans like the Thrift Savings Plan, Individual Retirement Accounts or Roth IRAs. Your money will grow over the years so you can be financially set during retirement.
With our current economic situation, military members and their families should discuss their finances as a family and make changes as needed, develop a plan and live a balanced financial life. By doing so, you’ll be able to focus on your military mission and endure less financial stress. In the end, it’s not how much money you earn, it’s what you do with your money.
(Escobar is an accredited financial counselor at the Peterson A&FRC.)