It also found that despite an absence of savings, the same two-thirds said they feel positive about their finances. This is a sign that they’re basically living day to day.
You can read the full article from the Associated Press at: http://bigstory.ap.org/965e48ed609245539ed315f83e01b6a2.
Are you currently saving for an emergency? If you need help creating a budget or learning about saving and investing, visit us at the Airman & Family Readiness Center.
1. TRUE or FALSE – You should only set aside enough money in an emergency savings fund to cover one month’s worth of living expenses.
2. TRUE or FALSE – You should take a loan or hardship withdrawal from your retirement savings plan in the event of a financial emergency.
3. TRUE or FALSE – You should invest your emergency savings in stocks and bonds.
4. TRUE or FALSE – You should set up automatic contributions to an emergency savings fund.
5. TRUE or FALSE – You should use your emergency savings to put an addition on your house.
1. False. Many financial advisers recommend setting aside six months’ worth of living expenses for an emergency. To calculate the amount you need to save, add up your mandatory monthly expenses (mortgage or rent, utilities, health care, food) and your discretionary monthly expenses (dining out, travel, entertainment). Focus on saving enough to cover your mandatory expenses first, and then move onto your discretionary expenses.
2. False. Saving for an emergency is just as important as saving for retirement, but the two accounts are separate for a reason; retirement savings should never be used for anything other than retirement income. Loans and hardship withdrawals reduce the amount of money growing in your account, prohibit you from contributing to your account for a period of time and, in some cases, result in tax penalties.
3. False. To help ensure that your money is available when you need it, deposit your emergency savings in a low risk money market fund or bank savings account. These investment vehicles provide easy access to cash when you need it, and protect your savings from the possibility of market declines associated with higher-risk investment options.
4. True. If you don’t already have an emergency savings account, you should be able to easily open a savings account at your bank. Once the account is open, you can set up automatic deposits to simplify the contribution process and help you save consistently.
5. False. Emergency savings funds exist for the sole purpose of helping you make ends meet if there’s a significant change to your income — for example, you lose your job or can’t work due to an injury — and covering unanticipated costs that you haven’t budgeted for, such as a major car repair.
- How to set financial goals
- The basics of investments and savings options
- Allocating investments to help meet your needs and your goals
Call 385-4663 to register for the next available workshop!
Join us for a FREE financial education event presented by award-winning authors and speakers on Thursday, April 16th at the Deployment Center Auditorium from 9:00 to 11:00 AM! No registration is required.
Ellie Kay presents “Living Rich for Less” – how to set up a workable budget, pay less for everything, money talk with your family and stretching the vacation and entertainment dollars.
Gerri Detweiller presents “Smart Money: 5 Ways to Improve your Credit” – free ways to monitor your credit, pay down debt and improve your FICO score.
Ingrid Bruns presents “Saving for the Future You Want” – practical strategies to start saving early, start small and stay committed.
All the latest financial apps and money saving websites plus you could win an iPad or other prizes!
How your election requirements will change:
An upcoming change in myPay will require you to designate your Roth contributions as a percentage of your pay, not a dollar amount. If you don’t comply with this change, then the Defense Finance and Accounting Service (DFAS) will not be able to process your Roth contributions. This change affects your Roth contributions only; your traditional contributions are already designated as a percentage of pay.
When the change will take place:
The new requirement will take effect January 1, 2015. You will have 30 days to change your Roth election from a dollar amount to a percentage of your pay. If your new Roth election is not received by January 31, 2015, then DFAS will not be able to process your Roth contributions until you update them.
How to make the change:
Log into myPay. You’ll see a special TSP section called “Traditional TSP and Roth TSP”—click there. Then, in the “Contribution from Roth TSP” section, you can enter the percentage of your pay that you’d like to contribute (10%, for example). Finally, click “Save” at the bottom of the screen.
The other way you can make the change is to submit the paper election form, TSP-U-1, available on www.tsp.gov to your finance office.