Chapter 26: Mission Control Center
Fundamental Financial Planning for Veterans and Military Families
- Establish an emergency fund.
- Invest, early and consistently.
Dollar cost averaging
Pay Yourself First
- Set up an automatic deposit to take a percentage of your income off the top of your paycheck and place it directly into an investment account. A 401K or Thrift Savings Plan account are common examples.
- Budget. Create a budget and stick to it. Are there purchases like unread magazine subscriptions, premium cable channels and online subscriptions that might not be as important as you once though they were?
- When you get your next raise, save the amount of that raise and continue to live off your previous income and budget. Save and invest the difference.
- Have more than one income stream (e.g., second job, a hobby that brings in some extra cash) and bank one of them.
- Eat at home rather than spend $25-$100 dining out. Instead, save that money. Tip: instead of ordering take out, cook a week’s worth of meals on the weekend and freeze them. Each night, defrost a meal and enjoy better food that is less expensive.
- Quit Starbucks. There’s nothing more aggravating than someone pointing out that a $5 latte every day is money down the drain, money you could gather and invest. Coffee brewed at home in a travel mug is a big step towards financial independence.
- Quit smoking. Again, do the math. There is every reason on Earth to quit. Money is just one of them.
- Save your change. While it might sound too simple, give this a shot. At the end of every day, put the coins in your pocket into a jar for a year. At the end of that year, roll the coins, deposit them in the bank and write a check to your investment company. You will be amazed at the amount of money you’ve inadvertently saved.
Establish an Emergency Fund
Investment Categories and “Vehicles”
Tax Qualified Investing
Employer Matching Programs
Simple Investment Categories
- Growth – typically all stocks.
- Income – typically all bonds.
- Balanced (Growth and Income Fund).