In today’s volatile financial environment, having a big salary and living beyond your means does not determine personal success. No, personal success more often results from hard work, careful financial planning, careful spending and most important of all…careful saving! As Soldiers and Leaders, you should know how to manage your income, spending and debt as financial issues can and will affect your Soldiers’ operational readiness and job performance. One of your responsibilities as an effective leader is to have a financial plan for yourself and help your Soldiers to develop their own. Here are my Top 5 Budgeting Tips for Army Soldiers.
#5. Spend Only Enough Money to Live Comfortably NOW! Again, this goes back to living within your means. I know, I know it may be tempting to drive on down to your car dealer and buy a new truck with lift kit and wheels, but if you’re an E-3, chances are you can’t really afford it. This is the number one cause of financial trouble for Soldiers…buying things that they don’t have the money for!
#4. Pay Yourself First and Foremost. Setting aside a small percentage of your pay, both civilian and military, in a savings account. This percentage can vary depending on your budget and/or needs, but I personally squirrel away about 15-20% of my pre-tax pay into a savings account. Additionally, there are only 2 things you can do with money…save it or spend it. Money that you haven’t spent in your budget should be saved!
#3. Buy Wisely; Be a Smart Consumer. This may be extremely hard for your Soldiers, but you must always control your impulses to make purchases. Become a smart consumer and examine what you truly need. If it is something special you want…save for it! Not only will you feel more pride from that purchase, but you may realize later down the road while saving that you don’t need it. Also, look for specials, shop at the PX and clip coupons…every penny counts.
#2. Save Regularly and Enough. You do not want to worry about money at an older age. That being said, start looking into individual retirement accounts (IRAs) and the government’s Thrift Savings Plan (TSP), they are good places to start. Not only are you putting money away and utilizing the power of compounding interest saving accounts like this are tax-deductible and can provide some tax relief come April…
#1. Create a Budget and Stick to it! Look, you don’t have to have a lot of money to worry about personal financial management. There are plenty of XCEL spreadsheets out there that can help you develop a budget plan and control what you spend. Here is just one example:
I personally use a budget spreadsheet and track every penny. However, the most important point is to prioritize what is important and how much you spend in various categories and stick to it!
FINAL THOUGHTS: Most Soldiers do not get into financial trouble intentionally, they do so thoughtlessly. Consider some of the tips above and some of the things that can happen if you don’t handle your money responsibly.
If you have any questions, just ask! We will do our best to provide an answer.