Military Saves Week, dedicated to helping Marines, sailors and families save money, reduce debt and build wealth will occur from Feb. 26-March 2. Marine Corps Community Services’ (MCCS) Personal Financial Management Program (PFMP) is here to help you meet your goals at 703-784-2650.
Dave Ramsey writes, financial problems within the military’s ranks are growing. The Department of Defense reports that financial problems are behind 80 percent of revoked security clearances. In fact, revocations of security clearances increased 1,600 percent during a recent five-year period. A 2008 study by the Defense Manpower Data Center found that 55 percent of military spouses reported a problem managing expenses during a service member’s deployment.
Couples argue about money more than any other topic. Money represents a multilayered problem for many couples, representing more than dollars, but security, independence, status and self-control. Both spouses enter the marriage with different spending habits. Often one spouse is a saver oriented towards financial security and the other a spender oriented towards enjoyment. Conflict easily abounds.
Zig Ziglar once said, “If you do the things you need to do when you need to do them, then someday you can do the things you want to do when you want to do them.” Couples who spend time making a budget, tell their money where to go instead of wondering where it went. Similarly couples who plan their financial goals for both the short and long-term dramatically increase their chances of arriving at their financial destination. (You can read between the lines, seeing the need for a spending plan). Today, we’ll focus on the key building block to any budget–building your emergency fund.
Build a $1,000 cash emergency fund immediately, $500 if your income is under $20,000 per year.
Saving money as a way of life is an exercise of character. The U.S. has a negative savings rate. That means we are spending more than we make. That has got to change or we are going to fail. It is also about contentment. It means I do not have to impress you. It is more important to have savings for my kids’ college and to retire with dignity.
Dave Ramsey writes that financially, “It is going to rain. You need a rainy day fund. You need an umbrella.” According to Money Magazine, eight out of ten of us will have a major financial emergency. Emergencies will occur ranging from a spouse losing a job, grown kids moving back in, or the air conditioner calling it quits. So Ramsey recommends both couples and individuals build an old-fashioned grandma’s rainy-day fund. Now, obviously $1,000 will not cover all emergencies. Ramsey urges you to increase your emergency fund from $1,000 to $5,000 and finally, fully fund your emergency fund by saving up three–six months living expenses. A fully funded emergency fund buys Marines, sailors and their families time to make good decisions in the event of the unexpected. Starkly, 49 percent of Americans could cover less than one month’s expenses if they lost their income.
However, Ramsey urges more than saving up an emergency fund, but saving for major purchases including a home and a car. You can build separate accounts to save for vacation, purchasing a reliable used car, amassing a considerable down payment on a home mortgage and your children’s college. And of course, starting while young, you can save for retirement, through your military’s Thrift Savings Plan. Many put off retirement savings, falsely assuming retirement will come automatically. Starkly, 58 percent of Americans never calculate how much they need to save for retirement.
Thankfully, there are abundant resources across the Marine Corps to help you overcome financial stressors. You can visit your command financial specialist or turn to MCCS.
The MCCS Personal Financial Management Program offers classes and counselors to help Marines and families master their finances. You can visit them and register for their classes online at http://www.quantico.usmc-mccs.org/index.cfm/marine-family/personal-professional-development/personal-financial-management-program-pfmp/ or call 703-784-2650.