Are you preparing to be financially free? Planning for success in financial matters is the first step to achieving financial independence. A budget is first step in a military wealth plan.
BUDGET YOUR MONEY AND YOUR SPENDING HABITS
A budget is actually a map of your spending habits, comprised of your expected income and your expenses.
Most military servicemembers don't have a clear idea of their spending habits, their financial worth or their future goals when it comes to financial freedom.
Here are some powerful money habits of highly successful people to help you adopt a military attitude about spending, saving, and securing your financial future well beyond military separation or military retirement.
FINANCIAL SUCCESS HABIT #1: KEEP A SPENDING DIARY
Create awareness of your spending habits by recording your spending for a month. That means tracking every penny you spend, every day. The Spending Diary tells you how much money you really spend, compared to what you thought or estimated. Once you can see the numbers, you know how much to allot to for expenses such as food, entertainment, transportation, etc.
The Spending Diary also lets you identify bad spending habits - do you really need to buy three cups of coffee each day, rather than make it yourself? - and change your short term spending habits in support of your long-term financial goals.
WEALTH CREATION SECRET #2 - REORGANIZE YOUR MONEY SO YOU ALREADY HAVE ENOUGH
Create successful habits by organizing your money so there is always enough for what's important - even if what's important is just having fun and making your family feel cared for with some affordable luxuries.
Financial experts have suggested setting aside 10 percent out of your military paycheck each month for investing, education, savings, and a fund for fun activities. Another 5 percent goes to your favorite charity, and the rest to your necessities.
By helping you organize and set aside money for things other than just monthly bills, a budget can actually give you more freedom right now - all it takes to have a change in your money management attitudes. If you find that you are using your entire military paycheck for your necessities, it signals that you need to pare down your lifestyle. Consider your military benefits including the commissary to help with food costs; research military discounts on everything from vacations to clothing to more; and you may find that you already have enough military income to live more comfortably.
WEALTH CREATION SECRET #3: PAY YOURSELF FIRST
When you get your military paycheck, do you pay all your bills first? Sounds like the responsible thing to do; but financial experts suggest that you pay yourself first. Take money for something you want, even if it is to out that money towards investments rather than spending. Get used to deserving the money you earn. Especially if you are military, you are working very hard for your paycheck; get used to using your money well and not allowing it to control or limit your life.
Personal budgeting is a great tool to find extra money in the paycheck you are already receiving, and using that money for investing - this is how you can pay yourself first: by keeping the money you earn rather than paying bill collectors.
Almost every financial success expert will tell you that paying yourself first is the first step on the path to financial freedom.
MAKING A BUDGET WITH YOUR MILITARY FAMILY
Personal budgeting for military families or single military service members is essential to your military mission readiness and peace of mind. Creating successful habits through personal budgeting will not only help you utilize your military pay, but can lead you to your goal of financial freedom.
If you are about to be deployed, set up a budget with your spouse well before you ship out so you can leave your family financially supported. Decide your financial priorities and always include savings and investing in your budget (remember those three cups of coffee each say? Add up what you would save by brewing your own and you'll have money to invest in just six months time)
Plan to make your money work for you, while you are working to serve your country.