Make 2012 year to get financial house in order

  • Published
  • By Stephen Delgado
  • Thunderbolt staff writer
Luke Air Force Base --  It's another new year and with it comes the usual plethora of resolutions. Some of the more popular ones are losing weight, getting in better physical condition and getting your financial house in order.

When it comes to getting the financial house in order, a lot of accomplishing this goal is common sense and good practical methods.

"It is important to keep in mind that any resolution or goal you choose should use the SMART approach -- specific, measureable, attainable, realistic and timely," said Cory Carmichael, 56th Force Support Squadron Airman and Family Readiness Center community readiness specialist and financial counselor.

Someone might say they want to make more money, but the question is how. Sometimes something simple such as selling DVDs that haven't been viewed for three years is a great way to get started in making some extra money and something that is easy to accomplish, he continued.

Credit cards can be a principle source of financial woes and Carmichael has sound advice on how to handle them.

"Unless you can pay off the balance each month, stop using credit cards," he said. "There are disturbing indications that people put more of their Christmas spending on credit cards this last year than they did the year before. A vital point to remember is it's foolish to only pay the minimum balance due on the card. Change this habit and better financial opportunities will follow."

It is easy to neglect saving for retirement because it may seem a long way off, but time rolls by and before one realizes it, retirement is upon him.

"I urge people to up their contribution to their retirement account," Carmichael said. "A sad fact is that many people aren't saving enough to keep themselves in the lifestyle to which they've become accustomed. Unless you are fine surviving on Social Security, saving for retirement should be your top concern after consumer debt has been paid off and an emergency fund has been established -- even more so than saving for children's college tuition."

What's more, it is important to put the money saved into a savings account.

"The money you didn't spend at the grocery store because of sales and coupons isn't really saved if it is spent on something else," Carmichael said. "If it's sitting in the same account that's used for the weekly budget, it's easy to not use it to pay debt or invest it. Many spenders can get all excited by their recent 'savings' and then buy something they don't need because they think they have the money for it."

With tax season upon us, it is a good time to change the amount of tax withheld from each paycheck.

"The average tax refund last year was $3,000," Carmichael said. "This money could be used to pay down debt or boost a retirement account. Getting it in a lump sum could be a temptation to spend it foolishly. Military personnel can make withholding changes by going to www.MyPay.gov."

Another financial pitfall is joining an expensive gym.

"Gyms are notorious for offering cheap deals to get people in the door, but signing up for a membership can leave someone responsible for much more expensive monthly dues that can stretch into years," Carmichael said. "If you do sign up, make sure you are fully committed to paying the dues in the months or years to come.

Many people think making the financial commitment will enhance their desire to go regularly, but it often doesn't work that way. Studies show 60 percent of gym memberships aren't used. Most military personnel have free access to fitness and recreation centers."

Most important, Carmichael said is to get out of debt and save money.

"As previously stated, the goals of getting out of debt and saving money are not specific enough" he said. "With so many families' personal finances in ruin, people need goals that are attainable in the short term," he said.

"Take time to personalize a goal. Apply the SMART approach. Keep the tasks manageable, such as shopping for better insurance rates, brown-bagging lunch twice a week and avoiding impulse buying. Remember to use the savings to pay down debt."

The Airman and Family Readiness Center has trained financial counselors, publications, guides, spend-plan worksheets and other resources to answer financial questions. For more information, call (623) 856-6550.