I’d like to share some of my favorite personal finance tips for Army National Guard Personnel. To give you a quick disclaimer I am not a financial adviser or CPA. I recommend you get qualified advice from a licensed professional. That being said, I have learned a few financial tips during my 15+ years of military service that I would like to share with you. Most of these things are common sense, yet soldiers rarely follow them.
- Save a Percentage of Your Drill Pay Every Month: Make it a goal to save a portion (or your entire drill pay) every month. Set up a retirement account or use the Thrift Savings Plan and then have an Electronic Funds Transfer set up that automates the process so you don’t have to think about it. Start at 1% your first month and then raise it by an additional 1% each month until you get to 10-20% of your gross drill pay being invested in a retirement account each month.
- Hire a Financial Planner: Even if you are just starting out, you should hire a financial planner (not on commission) to help give you some financial advice. They can help you set up a plan and give you basic financial knowledge so you know important numbers such as your balance sheet and income statement.
- Stay Out of Debt: If possible stay out of debt. Keep your debt to a minimum, especially unsecured debt such as college loans, personal loans and credit cards. If you buy a car, shop around for a good rate and consider buying a used car with cash.
- Track Your Monthly Progress: Every month sit down with your spouse and update your net worth sheet to see how you did for the month. Set yearly and monthly goals and track your progress. As you reach some of your goals don’t forget to celebrate.
- Ignore What Your Peers are Doing: It amazes me how many people want to “keep up” with their peers with material possessions. Don’t worry about your E-5 best friend who just bought a Mercedes AMG and has a $1500 per month car payment. He is broke, but doesn’t know it yet! And don’t be embarrassed because you drive a paid off “beater” car. Look at what everyone else is doing and do the opposite.
The bottom line is that you must be disciplined and take responsibility for your own personal finances. Just because no one has ever taught you about money before doesn’t mean you aren’t responsible for your own financial livelihood. Educate yourself, develop a plan and stick with it for the long-term. You will be glad that you did.
Listed below, I’ve shared a few resources that I think can help you out with your personal finances. Good luck!
The Stop Worrying About Money Course
Final Thoughts
It is not difficult to save and be financially secure, it just takes determination and a plan. Follow these tips and you can be financially secure.
Feel free to post your tips, opinions and questions below. Thank you.
Chuck Holmes
Former Army Major (resigned)
Publisher, Part-Time-Commander.com
Email: mrchuckholmes@gmail.com
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All of your points are very true, and I have to endorse your recommendation of Dave Ramsey’s book. That book has led many of my friends to get themselves out of heavy debt. Taking personal responsibility for your money is the only way to keep yourself in a position to continue forward.
“The Total Money Makeover” is a great book. I recommend it to everyone I meet. All of the debt reduction and personal finance books out there, this one is my favorite.
Personal finance is a big worry for me – I just don’t seem to be able to save. I think point 5 is your best advice. It’s so easy to look at what other people are doing, and feel that you need the latest car or gadget. I need to stay focused on my own goals, like saving some money for the future and ultimately for my retirement.
The first thing you could do Andrew is pay yourself first. Take a portion of your income, say 10%, and put that in a retirement account each month. As you do that, you should also set a budget and then get busy paying off all your debt. If I could recommend a book to you, I would recommend “The Total Money Makeover” by Dave Ramsey. That book changed my life and I know it can have the same effect for you.
Regarding hiring a financial planner, Chuck is spot-on when he says to avoid those on commission. I’m certainly not knocking any investment companies, but the big names you see like (just to throw out examples) Edward Jones, Ameriprise, and New York Life have their own financial products. Usually their employees have some incentive–typically a higher commission rate–if they sell the company’s own products instead of others. That doesn’t mean these companies or the people who run them (or work for them) are crooked; like any other business their goal is to make money. If you end up making a few percentage points a year less in returns because they sold you an investment that wasn’t the best choice for you, that’s legal, and it’s on you. I promise they won’t hold a gun to your head and make you sign anything. If you want investment advice, pay someone who doesn’t sell any investment products by the hour (and no, those people don’t come cheap, but as the saying goes, it takes money to make money).
Thanks for the comment, Daniel. Like anything else, educate yourself before you talk with a financial planner. And make sure you ask them the right questions during the interview. Never take anything at face value. Ultimately, YOU are still responsible for your own finances, even if you have a financial advisor.