Money Habits – Fighting for Your Financial Future
By Maj. Michael Goodman, 17th Comptroller Squadron Commander
/ Published April 12, 2011
GOODFELLOW AFB, Texas --
We all dream of the day that money is not a concern--that it will be there when we need it and in the amount that we need. Turning that dream into a reality is a daunting task unless you have a plan. And therein lies the problem--most of us either do not have a plan or don't follow the one we have. If we are not consciously following a plan, it could be said that we are doing things by habit. Good or bad, habits are the things we do subconsciously every day that are easily learned and difficult to break. So why not develop good money habits now so you'll have the financial resources you need when you need them:
Want what you have. Did you ever ask yourself what you really need? I would argue that outside of freedom, food, shelter, and clothing, everything else is a luxury. To me, wanting what you have is simply taking inventory of what you need, realizing that you already have it, and then enjoying that realization. While it sounds simple in concept, it's very hard in practice. I am reminded of this every time I walk through Best Buy or see the latest issue of Car and Driver. Do I really need the latest 3D flat screen LCD TV? No. But do I really want it? Absolutely! In reality, my six-year old TV works just fine. And judging from the cars I see on base (especially in the dorm parking lot) the things you already have are pretty nice too.
Don't buy things you can't afford. Years ago, this was impossible. Before credit cards, you couldn't buy anything if you didn't have money. Amazing but true, people used to purchase cars, boats, even houses, with cash. They were able to do this because they saved money until they had enough. Today, that is not the case. Credit cards allow you to have anything you want, whenever you want, whether you need it or not. Luckily, there is an easy cure for this problem: Go to an ATM and take out $100. Next, go to a bank and trade in the $20s from the ATM for a single $100 bill. Finally, empty your wallet or purse of every credit card to include your ATM card and put the $100 bill in their place. That's it! Not only will you be less tempted to buy stuff you don't really need, but you'll be less likely to lose your wallet or purse. Why? The answer is pretty simple: The emotional pain of breaking a $100 bill outweighs the happiness felt by purchasing something insignificant. Now just imagine what would happen if you repeated this habit every week and never broke a single Benjamin!
Save for the future. A military retirement is one of the best deals around when it comes to financial security. But in the face of RIFs, DOS rollbacks, and other force shaping measures it seems less and less guaranteed. So I am saving for the future, and I encourage you to do the same. It doesn't matter if you put some money under the mattress, bury it in the backyard, or put it in the bank--if you save money for the future you will be far better off than those who don't. Being in the military makes it even easier to save for the future. You can set up allotments to savings or retirement accounts by visiting the Finance Office, or start a Thrift Savings Plan by visiting the Military Personnel Flight. Start out small, $100 each month, and try increasing the amount by adding another $100 each month every year for 20 years. Chances are you won't notice the money missing from your pay after the second month. And while saving $1000 each month at the 10 year point sounds difficult and saving $2000 each month at 20 years sounds near impossible, the habit will have literally paid off when you notice how much you've saved.
Saving for the future, buying only what you can afford, and utilizing what you have are not new ideas--they have been around for years. Fundamentally, they are the concepts that have allowed the United States to grow into the world's largest economy and secure freedom for millions of people. By practicing these concepts on a regular basis, you can guarantee your own financial future and better enjoy the freedoms you've fought so hard to secure.