Fill Your Cup: Financial Care

Written by Crystal Blackwell Tyson on April 1, 2020.

As the old saying goes, "Money is the root of all evil." Similarly, 1 Timothy 6:10 states, "The love of money is the root of all evil." So how can we protect ourselves financially from "evil" when it seems money is in everything we do and makes the world go around?

Around 62 percent of people feel stressors regarding money. Statistics are higher for servicemembers of all ranks and their families, especially new military families and those about to retire. Often times, servicemembers come into military life with limited financial knowledge. This plays a major part in how one reacts to their first paycheck after seeing a much larger number than ever before. If a servicemember is married, this can also be the first time a spouse is introduced to money and home management. For retirees, change in finances can be one of the highest stressors. After 20 plus years of receiving BAH, BAS and a set amount for time in service, learning to adjust to civilian pay can be frustrating and scary. Even worse, some have no plan to have an additional income besides retirement pay. Financial stress is the main cause which has lead to over 30 percent of military divorces. In itself, financials are not an easy task to learn at any point in life, but there are steps to put you on the right path. According to the American Psychological Association (apa.org), the best ways to deal with financial stress are to make one financial decision at a time, track spending habits, make a plan or budget, and always ask for help when stress levels become too high.

Although there is not a best practice in learning financial management, the steps below can start one on the right path to financial care. It is important to know the military provides programs to learn about financials at all levels. Army Community Services (ACS) offers financial readiness education, counseling, and training as well as emergency assistance or Army Emergency Relief (AER) for those qualified. To learn about ACS programs, visit gordon.armymwr.com/acs. For other branch services, visit your local financial readiness provider.

Steps to Financial Care

Learn to Transition – Leaving high school, without bills or responsibility, is a major transition in becoming an adult. The burden is lessened when becoming a servicemember due to the military providing housing, food and essential needs. The only thing a servicemember has to pay for is their phone bill besides other bills they’ve acquired before joining the military. A good idea is to create a Word document where you are able to see what you will have to do transition from being on post in the barracks to living on your own. You can also connect with Relocation Readiness for assistance. Visit gordon.armymwr.com/relocation for more information on programs like the Lending Closet and other programs to assist you in moving into a place of your own.

Budget – Budgeting is estimating what should be spent for a month and trying to stick as close to that number as possible. Do not underestimate how much should be spent. Learn the 50/20/30 Budget Rule. This rule breaks down how to spend your net pay. 50 percent goes to bills such as rent or mortgage, groceries and car note. 30 percent for items you want, such as vacations, ticketed events or memberships. While the last 20 percent goes to savings or investments. The only alteration you should ever make in this rule is to lessen the amount going to wants and adding that additional amount to savings. Find an automated budget calculator at gordon.armymwr.com/financial-readiness.

Pay Off Debts – Debt is more than just credit cards. This can be a loan or any type of money owed or due. The trick is to lower your account each month and pay it off as soon as possible. Keep track of your accumulated debt with online files or by using an Excel template. Many of these templates give advice on the amount you should pay dependent on the interest and balance. You must also be aware that debt ratios effect your credit score. Normally it should stay under 30% of the total to stay in the green.

Save – It is a good idea to start saving at least 20 percent of your income in an account only to be used for emergencies. Starting this rule with a first job helps the concept become a habit. Even if you are just starting, after completing your budget with things you absolutely need, look at the remaining amount. Prior to budgeting your 30 percent of want spending, look at a realistic goal to save every paycheck. Going one step further, you can even have it taken directly out of your check before it goes to your checking. An important note is to save at least 3 months worth of emergency funding as quickly as possible.

Invest – Investments include real estate, retirements, gold and stocks & bonds. The key for investment is to start early. The longer amount of time you have in your investments, the better the outcome. There are tons of companies that teach investing and invest for you. Its advised, however, to learn as much as you can for yourself about investing.

Buy Smart & Sacrifice – Couponing has been a huge deal for some time. Learning how to properly coupon can save you tons of money on everyday products and food. Shopping around is also very important. Impulsive buyers, more than not, can regret purchases when seeing an item for less than what they’ve paid. Also look at necessity over wants. Do you need to go to Starbucks every day for coffee or can you purchase items for less that can be made at home? Sacrificing little things like buying lunch everyday can add up quickly in your savings. Remember when financing large items to use the "rule of three" — compare three products at three different places with three types of financing.

Supplement Income – If you feel as though your income isn't enough, consider a temporary second job. Many times, people work remote jobs from home like customer service or call centers. Others have turned to driving companies like Uber, working at their favorite convenience store or opening their own business.

The intent is for everyone to get a good start on becoming financially savvy! Start early by teaching children about financial care while you go through the process. Financial care, if completed correctly, can add years of happiness to your life by making sure financial stress never exists. Reach out for help in regards to things you do not know. There are tons of expert matter subjects in the library and free classes offered on Fort Gordon. If you have questions about programs and services offered, visit gordon.armymwr.com/acs.

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