Back to School Report Card
School’s back in full swing—in fact, pretty soon we should be getting our kids’ first progress reports…including my son’s foray into high school.
I’d be lying if I didn’t admit we’re crossing our fingers in the hope our kids do well—so far, so good. But this column isn’t about my kids or yours, it’s about a little adult self-assessment. Now is a good time to look in the mirror and give yourself a financial progress report. Like a good guidance counselor, I’ve taken the liberty of laying out your recommended classes. Let’s see how you’re doing.
By J.J. Montanaro, USAA
We’re not talking baking and babies, but the real economics at your house. Have you mapped out a budget? Are you tracking expenses and looking for opportunities to cut back and free-up money that can be re-directed to eliminating debt, building your emergency fund or for longer-term savings and investments? This is where it all starts, so you want to get more than just a passing grade.
Let’s start with a scary one: earlier this year the Employee Benefit Research Institute published its annual survey on retirement confidence and more than 40% of respondents had set aside less than $25,000 for retirement. Now that’s an “F.” What’s your grade? Hopefully, you’ve eclipsed or are on the road to shoot past that worrisome benchmark soon. If not, consider starting or bumping up your Thrift Savings Plan, funding a Roth IRA…just get going.
Not to be a downer, but history is replete with disasters, human and otherwise. This year we’ve seen earthquakes, tsunamis and tornados wreak devastation across the globe. On a much more mundane level, did the budget impasse that threatened military paychecks earlier this year throw you into a tizzy? Give yourself an “A” if you’ve recently reviewed your insurance coverage and have a robust emergency fund equivalent to at least three months of expenses, otherwise back to the black board!
For the kids, with a “physi” instead of a “fis” this is a breeze. Just show up, dress out and exert a little effort and you’ve got an easy “A.” Not so fast for you. Have you started to plant the seeds of frugality, financial fitness and good savings habits in your kids? If not, focus on building this skill set into their repertoire. Let them manage an allowance for chores around the house, involve them in the budget process and let them begin to discern the difference between needs and wants. If it’s not the basic necessities consider allowing them to make choices. Learning the value of a dollar can go a long way in creating a sound financial future.
OK, this probably doesn’t belong here as it’s more of a pet peeve than personal finance tip. This pops into my mind each time I watch my kids hunt and peck. What happened to typing class? I took typing and it may be the most useful of all my school classes…at least the one I use on a daily basis — like while writing this column.
All right, how’s your report going to look? Are you going to be grounded or heading out for a celebratory dinner? If you’d like to share your successes or challenges check out USAA’s Military Spouse Community. While I’m checking on you I’ll hearken back to the Fourth of July when I encouraged you all to declare your financial independence with a written plan to achieve that worthy goal. Well? Just checking.