“Make It Automatic” is a key theme for Military Saves Week 2019, which kicks off Feb. 25. It’s an approach to saving and investing that can help you achieve financial security by bringing to life the concept of paying yourself first.
Think about it: If you wait until the end of the pay period to save or invest, there’s a good chance there won’t be anything left. That’s a recipe for failure. On the other hand, by using the first dollars you receive, instead of the last, saving and investing become priorities.
Here are three easy and powerful ways to make it automatic:
1. Use the Thrift Savings Plan. When you sign up, your contributions will happen before your pay is deposited into your bank account, so it’s one of the easiest ways to make it automatic. The TSP is a centerpiece of the Blended Retirement System. If you’re eligible, under BRS you’ll need to contribute at least 5% of your pay to get the full 5% from your employer, Uncle Sam. Don’t leave that free money on the table.
2. Set up an allotment. This is another great way to set aside your first dollars instead of your last. Using your service specific access to Defense Finance and Accounting Service (DFAS), you can set up discretionary allotments from your mid- and end-of-month paychecks that will go to a savings account, mutual fund, IRA or a split of the three. This can be a superb way to build your emergency fund, set aside money for a home down payment or supplement what you’re saving for retirement in the TSP.
3. Establish an automatic transfer from your checking account. With this approach, you wait until your pay hits your checking account, but by establishing an automatic transfer with your bank, you’re still able to put your savings efforts on autopilot. You can set up your automatic transfers to happen twice per month to coincide with your paycheck’s arrival and slide money into your savings or investment account.
Making it automatic is a simple, effective way to pursue your financial goals. Make those goals your priority and take the Military Saves Pledge today.
About the Author: JJ Montanaro is a Certified Financial Planner® professional and part of the Military Affairs team at USAA. He’s a graduate of the U.S. Military Academy and has over 20 years of financial planning experience.
Disclosures: "Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements."
The Department of Defense will release more details of the BRS before 2018. Details of the BRS are subject to change pending National Defense Authorization Act (NDAA) approval. Information is accurate as of January 2017 and is intended for use by USAA, its members, and prospects.
The information contained is provided for informational purposes only and is not intended to substitute for obtaining professional financial advice. Please thoroughly research and seek professional advice before acting on any information you may have found in this article. This article in no way attempts to provide financial advice that relates to all personal circumstances.
No Department of Defense or government agency endorsement.
The trademarks, logos and names of other companies, products and services are the property of their respective owners. USAA means United Services Automobile Association and its affiliates.
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