From Pioneer Lending
Tips to save money
The following tips can help military families take control of their finances, save money, and start down the road toward financial independence.
How you answer these questions will determine how you will handle the remaining steps. For example, if you want to retire early, then you will need to budget for additional contributions to a retirement account. Those increased contributions will then affect how much you spend on other items in your budget, which will have a continuing “trickle down” effect on the rest of your spending.
Once you have an idea of your financial goals, you can use them as a baseline for the rest of your financial plan.
Create a budget
The key is to be realistic—don't over or underestimate your income or expenses, and be sure to include every regular expense, including those you pay annually, biannually, or quarterly (such as auto insurance, which is usually billed twice a year but for which you can save monthly).
Just having your spending information in front of you can be a real eye-opener and show you where you're wasting money, and where you can add a bit more.
Pay yourself first
Save on insurance
Cut the extras
Look through your budget, find out how many of these smaller expenses you have, and find a way to eliminate them or replace them with something less expensive. For instance, making your own coffee still gets you the caffeine (and even the taste) you want, but without the cost of a fancy coffee shop.
Keep tabs on your credit report
Check your credit report at least once a year at www.annualcreditreport.com. Note that this is the only site legally able to give you free copies! There are other sites that claim to be able to do so, but they have been noted for fraud and charging you a fee.
Once you get your copy, dispute any accounts that aren't yours, as well as negative items more than seven years old (10 years if you have filed bankruptcy). Then keep track of it each and every year to make sure it's accurate.
Break the debt cycle
If you have too much debt already, some sort of debt consolidation loan can be an effective solution. In some cases, the monthly payment may be more than a minimum credit card payment, but remember that the loan will be paid off in a matter of months, whereas a credit card can take years to pay in full.
Before taking on any type of debt, however, make sure it is necessary and, if so, how much you actually need. One way to think about your family's debt is to set a threshold—for example, make sure your debt ratio is no more than 40 percent (all debts divided by take home pay). The key is to know how much debt is reasonable and set a plan to give yourself a better chance of making the payments you need to remain financially secure.
Now get started!
Just remember that if you are having financial problems, you probably didn't get in them overnight. It will take time, a period of adjustment, and a true commitment to making a change in order to fix the problems. But just like anything worthwhile, it will all be time well spent.
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