New Year’s resolutions: more bang for your buck

by Senior Airman Caitlin O

It’s time to set that New Year’s resolution in motion. If one resolved to pave a new path to healthy finances, here’s an opportunity to make necessary improvements.

Ramstein’s financial counseling professionals offer the following advice for those interested in changing their financial future for the better.

Know where you stand
The first steps in creating a budget can be as easy as counting to three.

1. Identify spending, and establish a spending plan.

2. Evaluate current spending and set goals that take into account long-term financial objectives.

3. Track spending to make sure it stays within established guidelines.

“Budgeting for entertainment, insurance and food allows you to keep track of how much is coming out of your income,” said Breauna Curry, Service Credit Union loan service representative. “Save money by not spending as much, and be aware of how much you’re making and how much you’re spending.”

Establish an emergency fund
Who knows what waits for us around the corner — a celebration, a tragedy or just a flat tire. Anywhere life goes, be prepared with an emergency fund.

“Establish an emergency fund of at least $1,000. (An) initial emergency fund should be $1,000, but here, overseas, it cost twice as much if something goes wrong, so it’s recommended to save more.” said Timothy Vohar, Ramstein Airman & Family Readiness counselor.

No need to pinch pennies

Budget for expenses, including entertainment, food and gas and be realistic. Once this is complete, it’s important to start paying off debt.

“Dig out of debt. Pay off the highest interest rate loan first. After you pay that off, take that amount you were paying on that and apply it toward the next highest rate,” said Doniel Wolfe, A&FRC consultant. “Once all your debt is paid off, and you establish that emergency fund, the world is yours.”

A lot of lattes
Keep in mind the small things in life — short stops at the shoppette, daily coffees or a cookie craving. Money spent eventually builds up.

“It’s that $10 a day that accumulates over time. Little things like that add up the fastest,” Wolfe said. “So it’s really important to be realistic with your money, account for an extra lunch or a game of bowling. If you’re not practical and budget for the small things, that’s where you lose track and get discouraged when it doesn’t work out.”

Preplan for any big purchases
People sometimes get into payments they can’t handle. Instead of not purchasing things they don’t need, sometimes they just get into more than they can handle.
“It’s hard for people after they have spent a large amount of money on a large item, because they haven’t calculated the cost of interest or insurance payments,” Wolfe said. “A lot of these people are also young, so their insurance is high. With insurance payments, as well as car payments, we’re now looking at individuals living paycheck to paycheck.”

Saving it for later
Refine your retirement plan or find something long term to invest in.

“It’s really important for people to start investing in their retirements. They really should make it a goal to invest 10 to 15 percent of their income,” Vohar said. “For some people that’s really hard depending on their season of life, but it is important because for those active duty military who want to retire at 20 (years in service),” Wolfe said. “That retirement fund is not going to give them adequate means to support them in the lifestyle they have become accustomed to.”

Less is more
Pool money with your friends. If one really wants to go to Paris, find someone with a small car and good gas mileage and contribute to gas. Also, camping spots and hostels are an inexpensive option for overnight stays. Take advantage of the great things to do out there at very low costs.

“Look for free activities such as castles, or volunteer around the areas. Get your kids in youth groups or teen activities, where they can get out and do things with their friends,” Wolfe said. “There are things to do around base or even in the local area that don’t include spending half of your savings to participate.”