Making wise financial choices for a stable future Published April 16, 2008 By Sharon Nichols 14th Force Support Squadron COLUMBUS AFB, Miss. -- Planning for ones financial future demands that they stay ahead of the financial factors that shape the economy. Ironically, financial worries derive not necessarily from lack of money, but often from lack of planning. Solid financial planning can take the uncertainty out of the financial future, leaving one confident that what they do today will help them acquire what they want tomorrow. Financial planning should allow them the opportunity to pursue educational, career and recreational goals, as well as plan for retirement. Knowing where they are now financially, where they would like to be and what resources they have to make that possible, will help them face the future with confidence. Financial management involves: · Setting personal and financial goals. · Creating a budget to manage expenses and minimize debt. · Establishing credit and using it wisely. · Saving and investing regularly. Financial goals can include paying off your debts in full, creating an emergency fund; establishing a good credit reputation and developing a savings or investment plan. However, specific goals may vary from one individual to another. A spending plan, or budget, is a tool for establishing financial control and direction. It helps track where ones money goes rather than wondering where it went. Using a spending plan helps avoid wasting money, prepare for unforeseen expenses and frees up money for savings or investing for long-term goals. Every time credit is used, debt is incurred. Used properly, credit helps achieve major financial goals, but used improperly, credit can lead to financial trouble. It is easy to lose track of how much is being spent when credit is used for vacations, dining out, clothing or gifts, and when credit is used carelessly, it is easy to spend more than can be repaid. If credit must be used, be sure to pay bills on time and in full to avoid finance charges. Do not skip payments unless pre-arranged with the creditor. Limit the number of credit accounts used and know the terms and conditions of all credit cards and loans. Compare credit options carefully and make wise credit choices. Saving and investing are essential to reaching major financial goals. Ideally, one should start saving and investing early and regularly. The key is to establish and continue a disciplined savings and investment plan. Authorize the bank to automatically transfer a portion of ones pay to a savings account as soon as it is deposited. That way, the money will not be missed. Try to save 10 to 15 percent of ones net income. If this amount cannot be saved, save as much as possible. Build an emergency fund of three to six months of basic living expenses - enough to manage a crisis without borrowing money. Increase savings contributions when possible. For example, if a raise or bonus received, consider adding some or all of the additional earnings to a savings goals. Financial planning is a lifelong process and practicing healthy financial habits is important. Peace of mind comes with having a realistic, workable plan for a financial future. Contact the Airman and Family Readiness Center for more information about setting financial goals, establishing budgets, using credit wisely or saving and investing.
