Declare Financial Independence in 2013

We all have money worries now and then.  But there are ways you and your family can live within your budget and still provide for the future. Financial independence is within your reach if you learn how to make your money work for you.  The first step may be just learning the language, knowing where you are right now and taking advantage of available resources.

The Navy’s 2013 Financial Planning Worksheet is a good practical tool that will help you get started.  Here’s a few of the financial terms that will help you fill it out the worksheet.

  •  Net Worth: Simply put, this is the value of everything you own (assets) less all that you owe (liabilities). Use conservative numbers unless there is a recent appraisal. The resultant figure should be evaluated annually and a worthwhile personal goal is to determine how to increase one’s net worth.
  •  Income: Identify both your gross and net income. Your gross income will be the sum of all compensation. Your net monthly income is your gross income less taxes due.
  •  Living Expenses: Estimate what it costs to live on a monthly basis.  It is important to account for non-recurring items such as holiday spending, birthdays, travel, etc. To do so, start with an annual estimate, then divide by 12 to produce a monthly figure. By doing this you create a way to save for non-recurring monthly expenses in advance so that when the event occurs you already have the savings to put toward that item. A general recommendation is that monthly living expenses should not exceed seventy percent (70%) of net monthly income.
  •  Savings and Investments: Compute what percentage of your monthly net income is used to consistently meet your goals. At least ten percent (10%) of net monthly income should be saved – more depending on lifestyle goals and choices.
  •  Debt Payments: Total your monthly minimum debt payments for credit cards, car loans (non-mortgage items), etc. Dividing this number by your monthly net income will help determine your debt-to-income ratio. Generally, no more than twenty percent (20%) of monthly net income should be attributed to monthly debt payments (not including mortgage). Of course, less debt is better.
  •  Power Payments: You can easily create a practical plan to eliminate all of your debts using the snowball method. With this system, you can choose the option that best fits your goals and abilities. Paying off debts with the highest interest rate is usually the most mathematically advantageous way of eliminating debt. However, paying off the smallest balance first can provide a significant sense of mental and emotional satisfaction and long term motivation. Visit and compute your own “debt be gone” plan!

Financial fitness is part of building resilience, mission readiness and happier relationships. As Uniformed service members you have access to free personal financial management resources year round. Speak with your Command Financial Specialist today about becoming financially fit or visit Navy Fleet and Family Support: to start planning your independence.

Next week we’ll look at starting the year out right by setting a budget.

About the author:
Stacy Livingstone-Hoyte, AFC™ has served at the Fleet & Family Support Center, Millington, TN as a Financial Counselor since Nov 2009. She conducts one-on-one sessions, Command training, group workshops and other efforts designed to meet the “Mission Readiness” goal of the U.S. Armed Forces. Prior to government service she worked as a Financial Services Representative for several brokerage and insurance firms. As a military spouse, Ms Livingstone-Hoyte knows firsthand of the financial challenges and opportunities that face Military families across the globe. To that end, she embraces a steadfast belief that financial success can be simple, just not easy.

3 responses to “Declare Financial Independence in 2013

  1. Pingback: Get Your Financial Bearing by Setting a Budget |

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