With Veterans Day fast approaching, members of the military and their families already have a lot on their minds—and a great deal of it might not be directly related to finances. However, your financial future is important, so here are a few tips from Compass on how you can build better financial habits and create long-term stability for your family.
Determine Your Net Worth
The first step is to get a full picture of your current financial situation, and that means determining your net worth. This figure takes into account the value of your home, vehicle, savings, and other assets, as well as any debts you owe. It can help you get a sense for both your everyday financial situation and give you a picture of your financial potential.
For example, if your net worth is lower than the median net worth for your age range, that’s a sure sign you need to change your spending and debt habits. Take a look at your debt-to-income ratio. If you’re paying back more than half of what you’re making, you’re in an unsustainable position. Figure out how to either reduce debt or increase income in order to get your family’s finances into a more favorable position.
Think About the Future
A common long-term goal for almost anyone is to purchase their own home. That can be difficult to imagine when money is tight. Fortunately, there are programs to help reduce your down payment to something manageable. This can be a path toward home ownership for you and your family.
Parents have a responsibility to keep their children safe and secure for as long as they can, which means it’s important to think critically about your financial future. Do some research to figure out how much you should try to have saved by retirement. This is important not only for having money to live on, but also for planning to finance long-term care should the need arise. Then, look over your current savings and contributions to make sure you’re on track.
You’ll also need to plan for how you’ll support yourself if and when you ever decide to leave the military. Going back to school is a great way to further your education. Online classes in particular make it easy no matter how hectic your schedule, and certain degrees like computer science can offer all sorts of excellent opportunities for yourself. Best of all, the military will help you pay for school.
You should also make sure you’re taking full advantage of your military retirement plan. For example, if you aren’t taking full advantage of your match, then consider upping your contribution until you are – otherwise, you’re leaving money on the table. If your partner is employed, have them check out their company’s retirement plan as well, since many offer a similar matching system that can substantially increase your retirement savings.
Life insurance is another solid way to ensure your family’s financial future. If you or your partner were to pass away while your children were still financially independent, the loss of income could be devastating. A life insurance policy offers some padding and gives your loved ones time to come up with a new financial plan. Even if you pass away in your golden years, life insurance can help to cover funeral costs and provide a nest egg for your loved ones.
Build and Commit to a Financially Healthy Budget
Finally, start making positive changes now by creating and sticking to a monthly budget. There are many different approaches to budgeting, so try a few out and see what works best for you. If you like to have information on hand at all times, then a budgeting app you can access from your phone might be best. If you prefer to write things down, you may want to use a notebook or binder to track your budget. Investigate the different budgeting styles to see which one makes the most sense for your family.
Strong financial planning can reduce everyday stress, increase stability for your family, and help you make the most of your money. Use the tips in this article to get a sense of your current financial situation and learn how to meet your long-term goals. Financial stability is possible: We hope this helps you reach it.
This article is brought to you by Jason @onparparent.com and Compass for Affordable Housing. Compass provides support to those of low income residing in affordable housing. Our mission is to share educational information with a wide-spread, diverse group of individuals who may lack access to pertinent information in order to aid in their ability to achieve success. For more information, please contact us today!