Today, your financial questions can be instantly answered with a quick search on a smartphone.But does it fit your unique financial situation? And more importantly, can that information be trusted? Serving in the military means you face situations more complex than the general public, like managing your finances while stationed in a remote area, or PCSing.
Since you have distinctive financial challenges and opportunities, it's even more important that you have resources and tools tailored to your financial needs.
A recent Navy Federal Credit Union survey, Military Millennials and Their Money, conducted by Forrester Consulting found that millennials prefer to do their own research before making a financial decision. Military Millennials rely on digital sources of for most of their financial advice, and today there are so many digital resources and tools available to help.
It’s no surprise then that Military Millennials feel like they are on track to meet their five year financial goals. But how do you narrow down all the information that’s available and find a resource that understands your financial situation? As a military service member, you’ll probably reach major financial firsts before your non-military peers, such as purchasing a home. Having a comprehensive tool that addresses all of your financial needs in one place is crucial to your success. After all, life is complicated and there are always multiple financial factors in play at one time — it’s about learning to balance those priorities to reach your goals.
MakingCents, Navy Federal's latest online resource for financial education, offers financial information tailored to your financial goals.
Photo Credit: Navy Federal Credit Union MakingCents, Navy Federal’s latest online resource for financial education, takes you on a step-by-step journey through their selected financial "track" — buying a car, or home, or opening a first credit card. Delivered in everyday "real person" language, the site takes the complexities and jargon out of the process, and educates users looking to improve their personal finances and their ability to manage credit.
Once an account has been activated, you can continue to use the site to explore topics, monitor your progress and even save and share related articles. The website is designed to tailor information specifically for you, based on your financial goals. Anyone can use the site — members and non-members alike.
Young recruits should take time to find a trusted source for financial information, online or otherwise. Doing this, and then creating a budget are the foundational steps of building your financial life. A trusted financial partner will be a crucial asset as they progress through their financial lives. Starting off strong will help you set and reach your financial goals.
Creating a budget is the first step to get a handle on your spending, especially once you’re getting a steady paycheck. Once you know what your spending habits are, you can begin to understand how to balance this based on your income and financial goals. You can start now by looking at recent checking account and credit card statements to get an idea of what you’re spending each month. But your financial life is more than just maintaining a budget. It’s about saving, investing and planning for those large future purchases.
You should have enough in your savings to cover three to six months of living expenses. At first that number seems overwhelming. But start small and slowly add to your savings order a period of time will help you keep the end goal in sight. Even 20 dollars a week adds up quickly, just be sure to set it aside where you aren’t tempted to spend it. And once you’ve hit that milestone, consider savings products like certificates, bonds, stocks or even investment properties.
Planning for retirement is a natural extension to your savings plan. Whether you’re taking advantage of a Thrift Savings Plan or opting for an IRA, there are a wide variety of options that’ll work for any financial situation. Starting early in your career allows you to take full advantage of the power of compound interest. Here’s an example:
- A $2,000 investment that grows at a rate of five percent each year is worth $8,643.88 in 30 years, assuming you don’t contribute any additional money. By automatically contributing to your retirement accounts straight from each paycheck, you’ll be able to simplify your budget. You won’t be tempted to spend that money on other things if it goes directly into your retirement accounts.
Before moving forward, you’ll want to learn all you can about your options and decide what will work best with your short- and long-term goals. Check in with your trusted advisor for sound advice on your savings goals.
Getting your first auto loan or mortgage can be an overwhelming process; it’s a big financial and emotional commitment. Remember that purchasing your first vehicle or home is an exciting time, too — be sure to celebrate!
Your favorite financial resource will be your lifeline in preparing your finances for this step, and for getting through the process.Don’t take the plunge until you’re financially stable and know what you can afford. Tools like Navy Federal’s MakingCentscan help you plan your finances around these goals, plus they’ll help you understand the process and costs associated with each purchase. You’ll be able to tailor your plans to your life, whether you’re stationed abroad or plan on relocating before purchasing a home.
Even if you aren’t quite ready to make a major purchase, it’s better to have an idea what you’ll need to do so in the future. It’s just like planning for a mission: planning and strategizing far in advance is key.
If you’re feeling confident about your finances and reaching your financial goals, we commend you. But keep in mind that the economy is constantly changing. Financial institutions regularly innovate their products and those changes could impact your future decisions. If you’ve built a relationship with a financial institution that you trust, go ahead and have a conversation with their experts. Don’t ever be afraid of asking for help or seeking advice. It’s better to learn an important financial lesson before your money is involved… it Makes Cents in the long run.
Navy Federal is federally insured by NCUA and an Equal Housing Lender.
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