Take a Military Approach to Your Money


I'm constantly reminded that I'm getting older. Sometimes, it's the scream of "Papa" as the grandkids roll in. Sometimes, it's physical -- like my daily hobble out of bed. Maybe you haven't yet experienced that little bit of early morning joy but, trust me, more years under your belt can make walking a painful endeavor.

Another definite sign the years are rolling by is that I find myself reflecting on the good old days -- days when that 35-year-old battalion executive officer seemed really old. Days when an eight-mile run was easy, and eight hours of sleep was a luxury, not a mandate.

I learned a lot during my time in uniform and, a few mornings ago, on my almost daily jog -- no, I can no longer outrun a bad diet -- I started thinking about how some of those lessons learned and timeless tidbits of military life can translate into our financial life.

Taking some editorial liberties, here are four pearls of wisdom from those days that you can apply when it comes to managing your money.

1. The 80 percent solution. Back in the day, the idea was that action was imperative. You'd be better off getting the ball rolling in the right direction and adjusting on the fly than waiting until every last detail was nailed down. The same approach can be applied to your finances.

For instance, it would be ideal to have a detailed financial plan projecting exactly how much you need to save to meet your goals after accounting for assumed growth rates, inflation, taxes and the whims of the market. But instead of waiting until you've mastered every detail, why not just sign up for the TSP and start socking away 5% or 6% to get started?

And although budgeting where every penny goes each month is a good idea to get your spending under control, don't stop there. Set up a savings account for emergencies, and put money into a Roth IRA and college savings plans for the kids. Put things in motion, and then tweak them over time. You can plan, plan, plan, but until you take action, you've really made no headway.

2. Take a little off the top. Many have uttered these famous last words before getting that first military haircut. I remember the buzz job that introduced my scalp to the sun (and it was downhill from there for my hair). You can apply that same phrase to your money by taking it off the top and paying yourself first.

Setting aside money for short-, medium- and long-term goals before it gets swept away by your normal spending routine is ideal. And speaking of taking a little off the top, every pay raise or promotion provides an opportunity to increase those savings without even feeling a pinch in your lifestyle.

3. If it wasn't good enough, it wouldn't be the minimum. Not everything from back then was a positive example for your financial endeavors. I hate to admit it, but on more than a few occasions -- especially after some late nights on the town -- this phrase captured my approach to the physical fitness test. While I doubt that this applies to you or yours, it's definitely not the way to knock down your debt. Checked out your credit card bills lately? These days, credit card companies are required to show you how many years it takes and how much interest you'll pay if you stick with minimum payments. Find a way to do more than the minimum.

4. A checklist for everything and everything on a checklist. Whether it was preventive maintenance, battle drills or a formal briefing, everything we did seemed to come with a list to guide us. In the same vein, create your own checklist to keep yourself on the right financial track. It could be a game plan to pay down debt, research and acquire a list of insurance products, or short-term goals you want to accomplish, such as saving for a new TV. Often, putting things down in writing is the first step toward making them a reality. I still have a checklist at my desk, and there are few things as satisfying as putting a big check mark next to another mission accomplished.

These are just a few military tidbits that translate nicely into sound personal finance ideas. I'm sure there are dozens more! What do I hope you take from all of this? Make your finances a priority and leverage your unique lifestyle to make a financial difference today … and help create the life you want down the road.

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