Stressed About Money? You're Not Alone

Financial problems

While this may come as no surprise to those of you currently serving, nearly two-thirds of military families -- 65% -- say they experience stress related to their families' current financial condition. Wow! Where did we hear that? Well, that was a key finding from the 2013 Military Family Lifestyle Survey conducted by Blue Star Families and sponsored, in part, by USAA.

Fortunately, there's a path to reduce some of this stress and regain control of your personal finances. Unfortunately, it's not a cakewalk. It will require a high degree of dedication, commitment and discipline. The good news is that if you keep reading, you'll have an easy-to-follow map.

Manage Your Cash Better

Your journey toward financial security begins with a detailed budget and a commitment to following it. The goal? Spend less than you earn. While 86% of Blue Star Families' respondents reported following a budget (the good news), 63% admitted to following it only loosely (the bad news). In the realm of budgeting, loosely often results in failure. All families, military or otherwise, should develop and commit to strictly following a budget.

Force Yourself to Save for Emergencies

Life happens, and sometimes that means unexpected expenses. An emergency fund is your first line of defense against sinking into debt as you manage the unforeseen. Military families live in an environment of uncertainty: Frequent PCS moves, deployments and the challenges of spouse employment are but a few examples.

This puts a premium on the sage advice of building and maintaining an emergency fund equivalent to three to six months' of expenses. Just under half of survey respondents reported having that much cash set aside (this sounds surprisingly high). If you're in the half that doesn't have this, set up a savings account and automatically add some money to it from each paycheck.

Protect Your Assets

Even with a fully stocked emergency fund, some unexpected expenses will be too big for you to absorb on your own. That's normally when insurance comes into play, helping to protect you, your family and your worldly possessions. A comprehensive protection plan that balances your financial abilities with your need for coverage is central to keeping the financial wheels on when the really bad times hit. After all, bad things happen to good people all the time.

Save More for the Future

The survey also looked at another key element of financial security: saving for retirement. The good news? Eighty-seven percent of respondents said they were putting money away for the future. On the other hand, only 44% reported taking advantage of the low-cost, easy-to-use employer plan for military service members — the Thrift Savings Plan. One way service members can help alleviate uncertainty about the future is to start building retirement funds in addition to their military retirement benefits. The TSP or an Individual Retirement Plan can be great vehicles to do this.

Pull It Together With a Plan

Although not a part of the survey, estate planning is another key component of financial security. Preparing a will, designating a power of attorney, appropriately titling assets and assigning beneficiaries helps ensure that if the unthinkable happens, financial stress will not be at the forefront of your family's worries.

Finally, an up-to-date financial plan that ties together daily budgeting, short- and long-term savings, investments, insurance and estate planning can be just what the doctor ordered for stress reduction. After all, it's much easier to get where you're going if you know where you're headed.

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