No matter where you are in your financial journey — whether you're just starting out or have some savings to invest — there are several steps you can take to secure your future. To get you started, AAFMAA Wealth Management & Trust LLC (AWM&T) offers these tips and, when you’re ready for the next step, they are here to guide you along the way.
Just Starting Out?
If you’re at the beginning of your financial journey, now is the time to set clear financial goals.
- Establish a budget that tracks your income and expenses so you have a clear picture of your financial standing and cash flow. From there, determine which expenses can be eliminated or reduced, and how much you can apply to debt repayment and savings contributions.
- Pay yourself first by setting up automatic transfers each pay period to a savings account. You can “set it and forget it” and can earmark money into specific savings accounts for education, travel, and more.
- Borrow from yourself by creating an emergency fund to cover unexpected expenses. This prevents you from dipping into your long-term savings. Additionally, it protects you from going into debt and repaying principal plus interest to a lender or credit card company.
Looking to Build Wealth?
If you find yourself further along in your career with some financial resources to allocate, it's an ideal time to explore strategic investments and incentives to pursue the accumulation and protection of your family’s wealth.
- Finance your future by adding to your retirement account. Consider increasing contributions to your Thrift Savings Plan (TSP), contributing to your company’s 401(k) and utilizing an employer match if possible, or consider opening an Individual Retirement Account (IRA). Keep in mind that although there are loans, scholarships, and grants to fund other elements of your or your children’s lives, there is nothing like that for retirement, so funding it now and maximizing compound interest is key.
- Consider credit cards with perks. If you have a strong credit rating and can pay off your card each statement before accruing interest, compare cards with cashback, reward points, or air miles incentives. These can assist you in improving your credit score for larger purposes such as a vehicle or home and can save you money in the long run.
- Explore low-risk investment options as you accumulate savings. Mutual funds, for example, are a collection of assets with a mix of stocks, bonds, and other securities. This is a strong option if you meet the minimum investment requirement and you can enjoy the convenience of automatic investing over a period of time.
Ready to Elevate Your Wealth?
Once you reach a certain level of financial comfort or have hit your financial goal, it’s time to strategize and position yourself for further growth.
- Analyze your risk to consider factors such as risk tolerance, time horizon, and how much you can afford to invest. Utilize AWM&T’s free Risk Assessment tool at aafmaatrust.com to get started.
- Diversify your portfolio with stocks and bonds. It's crucial to stay disciplined and continue to invest over time, benefitting from compound interest and market growth.
- Consider new assets that can generate wealth or passive income. If real estate or starting a small business is of interest to you, now is the time to consider if they’re financially advantageous for your military family. Additionally, prioritize retirement accounts and tax-advantaged savings plans to maximize your wealth-building potential.
AWM&T Can Guide Your Financial Journey
Regardless of your stage in life, prioritizing financial planning is vital. The right financial advisor can help tailor your strategy to your unique circumstances and long-term goals. With a solid financial plan and commitment to your goals, you can work towards a financially secure retirement and ensure the lasting well-being of your loved ones. To get started, give AWM&T a call at 910-307-3500 or visit speak to a professional today.
Originally published in AAFMAA Advantage, 2023.