Financial Readiness
Create Smart Financial Habits — Not Just Resolutions


With the start of the New Year, you’re probably thinking about implementing resolutions, like staying fit and getting organized. Keeping financial resolutions can be challenging. With a financial plan in place, you’re more likely to succeed. To celebrate the New Year, think about reviewing your budget and creating or updating your spending plan.

Have Your Annual Checkup

You’re striving to achieve some pretty wonderful things for yourself — and your family! Just like you go to the doctor for annual physicals, conduct a financial checkup to see if your financial health is in good shape. It’s an opportunity to review how you’ve done financially over the past year and see if you’re on course with managing your money.

Check on your finances by recording your net worth, or what you own minus what you owe, on a personal financial statement. Your net worth gives you a useful picture of where you are financially.

Prescription: Spending Plan

Knowing where your money comes from and where it’s going puts you in control. Create a spending plan to help you realize lifelong dreams and aspirations.

Start by establishing your goals. List all your financial goals, and make sure they are SMART — specific, measurable, achievable, realistic and time-bound. Then take the following steps:

· Determine your income.

· Identify your expenses.

· Calculate your balance, or what’s left when expenses are subtracted from income.

· Check your budget against your SMART goals.

· Determine where you want to make changes.

When putting together your spending plan, you’ll have different spending and income options available to you. Choose options that best meet your goals. Be realistic! Don’t plan to win the lottery. Like medical care, a financial plan will work the best with careful monitoring and adjusting based on your current priorities and goals, and when significant life events, like the birth of a child or a permanent change of station, happen.

Experience Financial Health

Achieve peace of mind and financial victory as you ring in the New Year. Goals that are realistic and based on data will become a reality and not just a passing resolution. Financial planning helps you identify what’s important to you. It allows you to identify realistic dreams and make careful, positive decisions about your financial future. It’s about identifying your goals and putting a plan in place to achieve them.

Follow the Department of Defense Office of Financial Readiness, or FINRED, on Facebook, Twitter and Instagram for more financial planning tips. Look for more on YouTube and the FINRED blog.

Written by Dave, an Accredited Financial Counselor® who has been helping families plan their finances for more than 30 years.





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