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Extending Your Dollars Not as Tough as Once Thought

Trying to squeeze a few more pennies out of those dollars you receive every couple of weeks is a challenge to many. To determine your financial health, you can take this Personal Finances Check-up  that should help you determine your financial risk. Once you learn how you think about money and how you actually spend it, you are on your way to a healthier wallet.

Yet, just knowing and thinking positive thoughts, isn’t the same thing as actually moving in a positive direction.

The first thing Mike McCall, a financial planner with MetLife, suggests about avoiding financial disasters is to get organized and have a strategy for your finances.

He doesn’t care to use the term “budget,” he said. “Budget is a dirty word,” he continued. Instead, he said that young Sailors should have a spending plan. “You can get almost anything you want with credit cards,” McCall explained.

Instead of buying just anything that suits your fancy, a bit of delayed gratification works well. Junk food, unnecessary clothes, trinkets and baubles are a few items to avoid if possible.

“Stay out of debt,” he cautioned. “Borrow to grow and acquire, not to blow.”

However, there is such a thing as good debt. This is the debt that will help you in the future, such as a house or property.

A car doesn’t fit into this category. “It looks nice and cool but if its not some type of property” it’s not worth much, McCall said. “You drive it off the car lot and you’ve just lost five grand.”

Another technique for good financial health is to save 10 percent of your paycheck and place it in an account you can’t touch until you retire. An excellent account for Sailors is the Thrift Savings Plan where you don't pay federal income taxes on your contributions or earnings until you withdraw the money.

If done correctly, you won’t need to remove any of these funds until you are in a lower tax bracket at retirement. It’s different from the Navy retirement in that money you contribute, as well as the earnings on that investment, are yours to keep regardless how long you stay in the Navy.

Finally, to avoid a fiscal catastrophe, set up an emergency fund.

“Save three to six months of expenses for emergencies,” McCall warned. You never know what the future holds.

Since [Service Members] should know how much is deposited in their bank accounts every pay period, the process of saving is a little easier to manage than that of someone who gets paid sporadically.

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