November is Military Family Month, and as we show appreciation for the sacrifices those in the military make, it’s important not to forget the unique challenges they face, such as serving overseas or being deployed in conflict zones. Those challenges also impact the service members’ ability to effectively manage their finances while also dealing with the other stresses that come with military life.
There are simple steps those in the military can take to ensure their families don’t face unnecessary financial burdens. These five tips that can help military families stay out of financial traps while their loved ones are serving their country.
1. Set a budget
Living within your means is vital to any successful financial plan. By setting a budget, you can track your expenses and have a better understanding of what you can afford month to month. This information can then be used to make responsible financial choices and is especially important as the service member transfers to active duty and income changes.
2. Make saving a priority
Include in your budget a specific amount you want to set aside each month for savings. Then move that money into a savings account first before paying any bills. Consistently putting money in savings each month is the best way to grow that account. By paying yourself first, you can ensure that your account will grow.
3. Don’t get trapped by debt
Having a consistent paycheck coming in from the government will open up more lending options – whether it’s store financing or bank loans. Do not take out loans for items you don’t need. Keep your debt at a manageable level.
4. Use special pay wisely
Those serving in the military often receive special pay or tax exemptions for the dangerous situations they are placed in while serving overseas. Rather than using these funds to make a big purchase, consider using them to give your retirement savings a boost or paying off a large debt. Adding these funds to your retirement savings will allow that account to grow faster. Paying off a debt you’re carrying will free up those funds to be used elsewhere on a monthly basis.
5. Know your options
Every branch of the military has a financial relief organization. If times get tough, make sure you consult one of these organizations for help. You can also make an appointment with a financial planner either through your military branch or through MidWestOne. Seeking advice from professionals can allow you to create a plan that will work for you.
Finally – don’t hesitate to ask for help. Contact your local MidWestOne banker for help creating a financial plan. He or she can evaluate your unique circumstances and help you create a plan that helps you pay off your expenses today and save for the future.