Fort Belvoir, Va. (March 6, 2014) - Becoming a millionaire at a certain age. Spending Plans. Saving for emergencies. Long-term financial planning. Those are just some of the topics people learned about by attending any of a series of financial classes hosted by Army Community Service's Financial Readiness Program counselors last week.
In honor of Military Saves Week, the classes aimed to teach as many people as possible about the importance of financial readiness.
Joe Botta, the classes' presenter, and a personal financial counselor, said everyone should start a savings plan as early as possible.
"When people are planning to get married, they should each come up with spending plans, using a financial planning worksheet that includes their goals and long-range plans," he explained.
"These reflect what's important to each person and are done separately," Botta said. "Then, they should compare notes and come to a common, financial planning agreement."
Botta said spending plans benefit people in many ways. "It shows you how to live within your income, realize personal goals, maintain a good credit history, get more for your money, reduce financial stress and arguments, and achieve financial competence and confidence," he said.
"People should try to build wealth up over a lifetime and think about the long term, instead of just today and tomorrow," Botta said.
Botta said larger expenses, like down payments, holidays and vacations are things, ideally, that people should take a year to financially plan for.
"If you end up with a surplus after creating a spending plan, then the next step is to figure out what you can do with it. Alternatively, if you have a deficit of incoming cash to expenses, then you have to figure out what you can do to fix the problem," he said.
Erica Drame, Belvoir's FRP director, suggested people interested in creating an initial financial plan find one on militaryonesource.mil.
Botta also recommended using an Excel spreadsheet to monitor expenses and income; even individual paper envelopes for each thing you're saving for; and/or the websites, saveandinvest.org and smartaboutmoney.org.
Botta and Drame both suggested developing financial goals using the SMART method: Specific, Measurable, Attainable, Realistic and Timely. For instance, buy a home in five years; get a credit report by the end of a month; pay off the car a year earlier than scheduled; or save $500 per month.
In terms of saving and investing, Botta recommended knowing the difference between the two.
Saving has no risk attached to it. Investing is looking for potential wealth over time. Participants were encouraged to understand the basics of investing in order to prepare for a financially secure future and to avoid scammers who may try to take advantage of them.
"Both saving and investing are needed for financial security," he said, adding, "The beauty of investing is time."
His words of wisdom? "Spend less than you make, track what you spend and plan for the unexpected. If you start early enough, you can very easily learn methods to have close to a million when you retire."
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