AFC, Personal Financial Readiness Specialist
FORT LEE, Va. – While pondering those 2021 New Year’s resolutions such as losing weight or pursuing a new career goal, Team Lee members should give some thought to getting their financial house in order by building their savings and trimming debt.
The Army considers financial resiliency as key to overall Soldier readiness and workforce effectiveness. Those constantly struggling to pay bills or keep food on the table are likely to be less effective in the performance of their duties. It can lead to costly mistakes, accidents and other negative behaviors. Fixing money troubles requires education and, for some, community assistance from budgeting experts, which is the role of the Army Community Service Financial Readiness Program.
People gain a sense of security when they set and stick to financial goals until achieved. It is a feeling of control. It reduces worry about the unknown. It promotes confidence and the notion that one is “more successful in life.”
For any investment or savings plan to succeed, it must be executed “SMART”ly – an acronym that summarizes the following:
• Measurable with a dollar amount
• Relevant to your financial goal
• Timeframe that’s realistic to one’s income
The first step toward creating a stable financial plan is building an emergency fund. It serves as the pillar of strength against unexpected expenses. Here’s a challenge to those in the Fort Lee community who don’t have such a fund – in America, we call 911 for emergencies, so let’s make a commitment today to accumulate $911 in an emergency account by the end of the year.
Using our investment acronym, that goal is Specific; Measurable if the participant drops $76 per month into a money market account and watches it grow; Achievable if the person or family cuts back on a few expenses such as ordering less takeout food; Relevant because of the peace of mind if offers; and has a Timeframe of one year.
Those who get started right away could even set their sights a little higher, say $1,000 or $2,021 to match the year. Ultimately, financial planners recommend having enough in an emergency fund to cover 3-6 months’ worth of expenses. Many families are realizing the wisdom in that recommendation as they deal with the negative economic impacts of the COVID-19 pandemic.
Those who already have an emergency fund and feel it’s sufficient could turn their focus to excessive debt, using the SMART parameters to reduce or pay off creditors, especially those charging the highest amounts of interest.
A trustworthy debt reduction calculator can help to clarify goals. One is located at PowerPay.org. Utah State University, which hosts the site, has done a good job providing information vital to goal accomplishment such as how much money can be saved as payments increase and exactly when debts will be paid off, if the plan is followed.
Those who have never been good at managing a checking account or maintaining a budget might also want to consider one of the many classes offered by the ACS Financial Readiness Program. In fact, the next monthly ‘Developing A Spending Plan’ class is set for Jan. 21, 11 a.m.-1 p.m., in the ACS conference room, building 9023, 1231 Mahone Ave. To register, call the program number listed below.