As the end of 2012 quickly approaches, make sure to give your finances a checkup and discover if you need to make saving your New Year’s resolution. You may discover that you have debt you need to pay down or that you are ready to take the next step in savings. Helping yourself and your family save successfully for the future should be near the top of your resolution list – and it’s one resolution you can’t afford to break! Remember, you don’t have to make a lot of money to save successfully. Start Small. Think Big.
5 Resolutions to Get You Saving in the New Year
1. Save for Emergencies
Having an emergency savings fund may be the most important difference between those who manage to stay afloat and those who are sinking financially. In a recent survey, only 49% of families said they had extra funds (not including lines of credit) available to pay for an unexpected expense of $1,000. Don’t find yourself unprepared in 2013. How to do it: Save a Portion of Your Tax Refund.
2. Get Out of Debt
The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. How to do it: Find places to cut your spending so that you can pay down your debts faster.
3. Save for Retirement – Participate in the Thrift Savings Plan
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. It offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans. Plus the TSP now has a ROTH option. How to do it: Start with as little as 1% of your pay. Don’t forget to have your spouse or family member save for their retirement as well.
4. Make Savings Automatic– set-up a discretionary allotment using myPay
These savings will provide funds for emergencies, future consumer purchases, home purchase, school tuition, or even retirement (also see Tip #3). How to do it: You can use an allotment to automatically transfer funds from your pay into a savings account. Saving automatically is the easiest and most successful way to save.
5. Deploying? Take advantage of the Savings Deposit Program
A total of $10,000 may be deposited during each deployment and will earn 10% interest annually. How to do it: Visit the finance office at your deployed location (or home base for information) to begin saving.
Savings Strategy: Save a Portion of Your Tax Refund
Tax Time is a great time to kickstart or grow your savings for the future! Use the 30 – 40 – 30 plan. Designate 30% of your refund to pay off debt and catch up on outstanding bills. Earmark 40% for current use. Use 30% to jump start an emergency fund or long term savings. You can use Form 8888 to buy a U.S. Savings Bonds. Bonds are a safe and easy way to save for the future.
Are you ready to set your goal?
Military Saves, operated by the non-profit Consumer Federation of America, and a partner in the Defense Department’s Financial Readiness Campaign, encourages servicemembers and their families to save money, pay down debt, and build personal wealth. Military Saves promotes positive changes in personal financial behavior and encourages everyone to take the Military Saves pledge.
By Andia Dinesen, Military Saves Coordinator