It’s a strange time to be thinking about smart investing. For many of us, these days (global pandemic days), we’re just hoping to get through a particularly challenging situation. But what if we told you that now is the PERFECT time to think about your future financial self?
First, let’s catch up. Earlier this month on the MFAN blog we talked about Getting Out of Crisis Mode – how to assess your financial situation, the importance of telling your money what to do (budgeting), and the need to prioritize having emergency savings. These action items are the foundation for both your present and future financial planning.
But just because you may be at the setting-the-foundation stage, doesn’t mean you can’t begin to think through what the next steps on the road to financial security will be for your family, and the key to that future security is smart investing.
Smart investing means you make your money work for you! The best time to begin investing is once you’ve got a modest emergency savings. At that point, you can concurrently feed your piggy bank and put money toward retirement.
For now, we just ask that you consider the following:
Make money matters a regular topic of conversation. Talk to your significant other regularly about finances. Have uncomfortable conversations about struggle. Have hopeful talks about future plans and goals. Agree to be partners in your financial future.
Know how risk-averse you are. Typically, when it comes to investing, the lower the risk, the lower the rate of return. That doesn’t mean to jump into a financial decision that makes you worried. Instead, it means considering the amount of risk you can live with, and choosing your strategy accordingly. For a great explanation of investment risk, visit this resource by our friends at FINRA.
Think about when you would need to access any money you’d invest. Investments are short-, mid-, or long-term. If your response is sooner rather than later, you’ll choose an option that allows you to access your money when you need it. (And you’ll have educated yourself on what penalties, if any, you might incur by withdrawing money earlier than the original terms.)
Educate yourself about government incentives. Your family has earned benefits that can improve your financial picture. Like Servicemembers Group Life Insurance (SGLI) and the Thrift Savings Plan (TSP). You can learn more about how to make sure you don’t leave money on the table with MilCents, a free, self-guided financial program that will help you understand your current financial situation, create a budget, save, invest, and more.
In MFAN’s 2019 Military Family Support Programming Survey, respondents told us that finances are an area of struggle for military families across the country and overseas. And it’s something we’ll be talking about a lot via fresh new website content and the MFAN blog, in our research, and in our work convening and advising key stakeholders who are invested (see what we did there) in improving quality of life for military families.