Fiscal fitness: strengthening your financial muscles

  • Published
  • By Staff Sgt. Lou Burton
  • 482nd Fighter Wing Public Affairs
HOMESTEAD AIR RESERVE BASE, Fla. --  Fiscal cliff, budget cut, sequestration, and furlough have been alarming signals for tough economic times for both civilian and military employees.

While no one person can control all these outside factors, there are ways to strengthen your financial muscles and prepare for tough times.

"There are several steps we can all take when considering our financial stability," said Mark H. Huston, Military and Family Life Consultant Program personal financial counselor. "The most important thing to remember is stay calm and focused on what you need to do. Sometimes hard decisions have to be made, so don't worry about what other people are doing and how you may look to someone else if you have to downsize."

Proactive financial strength training starts long before disaster occurs. For those not yet experiencing financial hardship, Huston recommends not living on the edge of your own financial cliff.

"It can be very tempting to increase the luxury in your life when you get an increase in pay," said Huston. "As tempting as that is, the healthiest thing you can do for your finances is to start an emergency fund by deducting 10 percent of your pay and putting it away."

Another important step is analyzing your spending and developing a budget.

"Often, people say they don't know where their money is going," said Huston. "In an age where almost everyone uses a debit card, it's very easy to reconstruct spending through detailed online statements."

After having a thorough understanding of your spending habits, create a realistic budget.
"A budget has to adjust for variables in different months," said Huston. "Adjust each monthly budget according to special events like birthdays, holidays, car repairs, and any other foreseeable event that could require additional funds."

For long term planning, setting goals is a useful way of guiding personal finances.
"If you set goals - write them down, keep them around to look at - you will be more focused on achieving them," said Huston.

While planning is a great way to help prevent financial disaster, there are resources available to get out of financial hardship.

"Most Americans have too much tax taken out of their paychecks every month," said Huston. "A quick way to help increase your monthly cash flow is to increase your claim for dependents to the accurate amount. That will free up more cash to spend in difficult times."

Floridians also have a beneficial program called Florida's Hardest Hit. The program assists employed homeowners whose income has decreased and which has caused them to fall behind on bills.

"This program helps by providing a one-time check to cover past due bills for employed homeowners who have experienced a pay cut," said Huston. "This program may very well be applicable to Department of Defense employees affected by furlough."

Unemployment is another huge hurdle for climbing out of debt. Without an income, bills are impossible to get paid.

"Someone facing unemployment has to act quickly by making lifestyle changes to adjust to the loss of income," said Huston. "Finding a job is the main objective and www.militaryonesource.com is a great place to start a job search."

According to Huston, taking an aggressive step in flexing your financial muscles is the best way to set oneself up for success.

"Be proactive, set goals, and stay vigilant," he said. "It may not happen overnight, but with persistence, it will happen."