Top Ten Financial Bad Habits (And Three Good Habits)
Military Saves is part of DoD’s financial readiness campaign, and if your military base is participating then you’re probably already tired of the publicity. But let’s get a glimpse of how tired your future could be if you’re not paying attention to your finances.
The campaign theme is “Set a goal. Make a plan. Save automatically.” The goal of Military Saves Week is reaching financial independence one small step at a time. Do a little thinking up front, decide how you’re going to implement your plan, and then put it into autopilot. Humans have limited capacity for making decisions (even when they’re good decisions) and even more limited willpower for carrying them out. (How’s that New Year’s resolution doing?) By focusing on your goal and putting your savings on autopilot, you’re much more likely to succeed.
While you’re at it, you could subscribe to a support group. If you take the Military Saves pledge then you have a free subscription to the monthly e-mail, a free myFICO credit score, and quarterly newsletters from America Saves. They’re small doses of knowledge that will make you feel good about your goal and your plan– or else they’ll nag you into action.
If you’ve been procrastinating or overspending, then you’re certainly not alone. The Allianz Life Insurance poll of American’s bad financial habits reports:
- Only 24% said they had no bad financial habits. Fewer than one person out of four felt they were financially healthy.
- 30% said they are guilty of “not saving any money,”
- 30% indicated they “spend too much money on things I don’t need.”
I wonder if those last two answers are related to each other…
The other eight of the top ten responses:
- 24%: Save some money, but not as much as I could
- 18%: Don’t have a household budget
- 18%: Spend more than I make
- 15%: Don’t educate myself about financial planning
- 12%: Pay bills late
- 10%: Only make the minimum payment on credit cards
- 9%: Play the lottery or gamble
- 9%: Don’t seek professional help with my finances
Only 5% reported that their worst financial habit was “not contributing to my employer-sponsored retirement plan.”
Compare those statistics to the success stories from Military Saves.
What should you do next? Here are three suggestions:
- Track your spending
- Make a budget
- Sign up for the Thrift Savings Plan.
Already doing those things? Great! Take a look at the next steps: do you have an emergency fund? How’s your 2013 IRA contribution doing?
Browse the additional links below for more ideas.
Military retirement spending: how much will I need?
Saving base pay and promotion raises
How many years does it take to become financially independent?
Tailor your investments to your military pay and your pension
Where to put your savings while you’re in the military
Simple ways to start saving
Start saving early
America Saves week is coming! (2012)
Bogleheads wiki on military finances
Success story: military retirement with low savings