We are at that time of the year where we start to think about all the things that we haven’t accomplished yet and embark on setting goals to improve ourselves and change behaviors. Despite best efforts, the resolutions most make before the start of a New Year start out strong, but rarely last past Valentine’s Day, especially those that concern advancing a financial position.
Debt from holiday shopping, unexpected expenses, and uncertainty about tax rates and the broader economic outlook have the potential to derail the best intentions to improve personal financial progress.
For members of the military, and our nation’s veterans, there are even more uncertainties that can disrupt new financial resolutions including: personnel and troop reductions; the potential implications of sequestration on defense spending; increased heath care costs; and the higher rate of unemployment facing veterans in the private sector.
The good news is that there is hope, no matter how dire the individual situation or overall economic outlook. If the right goals are set, even our military, veterans, and others in equally challenging situations can get out of debt, and get ahead. It all comes down to setting the right resolution for the New Year, sticking with it as adversity strikes, and adapting to situations that we cannot control.
At Pioneer Services, we provide financial education services and information, specializing in serving those who serve in the military. We know the struggles and have some sound advice for anyone looking to improve their financial position in the New Year.
Ø Resolution #1 No more Debt! - Getting out of debt is the best thing you can do for your financial future. It takes some discipline, but it is worth it to embark on a plan to eliminate debt and stick to it. There are 5 easy steps to consider when tackling your debt including: (1) checking to see if there are fees for paying off a debt early; (2) paying off the right debt first (usually credit cards); (3) “snowballing” your payments so your debts are paid faster; (4) dedicating yourself to the process by being flexible and proactive in sticking to your debt reduction and spending plans; and (5) sticking to your spending plan to make sure you don’t fall back into debt.
Ø Resolution #2 – Repair/Monitor Credit. – Fixing or even just staying on top of your credit situation will help get you better rates for credit cards, car loans, mortgages etc. Even those who think they have good credit need to stay on top of their situations as the rise of identity theft can negatively impact your credit history before you even know it. Pioneer Services has assembled a Credit Repair Kit that features checklists filled with actions you can take now, information on how to understand and potentially increase your credit score, and even tips to help you reduce you’re spending.
Ø Resolution #3 – Build a Savings. - Financial emergencies can be as simple as computer crash or unexpected car repair. Without planning for the unexpected and getting into the habit of cutting costs and saving, it makes the long term goals of a home purchase, new car, college savings, and even retirement even more daunting. Find ways to save money in your regular budget – maybe it is clipping coupons, carpooling, or skipping the morning latte once in a while. These small tasks can add up to big savings.
These resolutions don’t take drastic lifestyle changes to meet. Just a few simple changes can help with debt reduction plan, savings, and credit protection/repair. While those serving in the armed forces have greater challenges associated with these goals, there are resources available that can make small differences with a big impact. That combined with discipline can make a big difference, very quickly.
The real key to sticking to these resolutions is looking at every financial decision we make throughout the year and determine how it fits into an overall financial plan. Meeting financial goals is accomplished simply by making the right financial decisions more often than making mistakes or getting caught up in things we can’t control anyway.
Do not allow government debates over tax rates, a sour economic outlook, or an unforeseen expense derail your resolve to improve your financial situation. If you stumble once or twice along the way, it will be all right so long as you get back on track with the next financial decision you make.
2013 can be the year to get out of debt, repair your credit, and get on the road to building a nest egg for the short and long term. Happy New Year.
Joe Freeman is President, Pioneer Services, a Division of MidCountry Bank. The company has provided award-winning financial education and financial services to military families for more than 25 years.