Stacy Livingstone-Hoyte, AFC®, is an experienced Financial Counselor who has worked extensively with U.S. Armed Forces members and families. She is a recent volunteer blogger for Navynavstress.com, but contributed previously while serving at the Fleet and Family Support Center, Millington, Tenn. 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.
Before getting into the next four steps to help you and your family spring into financial success, let’s take a moment to assess what you may have learned from steps 1 – 3. Were you surprised (pleasantly or otherwise) by your current financial situation after really diving into the details? How will you and your spouse or financial partner work together to motivate each other toward a stress-free—or less stressful—financial future? What adjustments will you make so your short-term plan yields long-term benefits? The next four tips can help you regain a sense of control, even in seemingly uncontrollable situations.
4. Expect the unexpected. It’s a fact of life that emergencies and the undesired will happen, whether it be repairs on a vehicle, household appliances, etc., so be prepared to bear the burden of these life events by maintaining an adequate emergency fund of cash and other liquid assets. Where possible, explore plans to preserve your interests, such as extended warranties, regular maintenance, etc. Also, whether its life, auto, health, home or renters insurance, ensure that what you value can be protected against catastrophic loss.
5. Understand and verify what others say about you. Similar to your personal and professional reputation, your credit report documents how you have managed your financial relationships. Although sophisticated computer models and algorithms mainly control this process, it is not without fault, and incorrect entries and outdated information can impact your financial position. While credit reporting agencies must comply with regulations to ensure fair and accurate reporting, the burden to thoroughly verify items listed on a personal credit report is the responsibility of the consumer. If errors are found, follow the stated processes to correct faulty information. Resources, such as www.annualcreditreport.com and www.saveandinvest.org, are two that a military member has readily available.
6. Anticipate aging and retirement. It’s not new data that Americans do not save nearly enough for everyday life, much less the prolonged period of retirement…. But it doesn’t have to be this way. Start saving now by taking advantage of available strategies, such as matching contributions, tax-advantaged and tax-deferred plans, low-expense ratio investment funds, dollar cost averaging, etc. Also, keep in mind that a dollar today may not hold the same value in the future, so choosing investments that will outpace the rate of inflation is a crucial step. Retirement planning should begin when income is earned, balanced with the need to secure a present, sufficient emergency fund.
7. Manage Expectations. Perhaps an even greater threat to financial stability is the finding and maintaining the balance of wants and needs. Vacation, holidays, birthdays, anniversaries and even prestige (i.e. Keeping up with the Joneses) can be very costly if not addressed up-front, so be sure to communicate and plan with those with whom you share financial relationships. You are more likely to keep plans when you have committed to money boundaries, expectations and plans.
Other ideas and plans for household financial management exist, but mastering these seven steps is a proven universal roadmap to springing into financial success, and thriving! While there may be a learning curve to breaking old habits and establishing healthier ones, try not to let a few occasional slip-ups discourage you from your path. Remember, “It always seems impossible until it’s done.” –Nelson Mandela