This Week in Your Wallet: Operation Money is Underway
I’ve been keeping something confidential for months and it’s time to break the seal: I have a new book! It’s an eBook on money management for military service members and their families called Operation Money, which is available to read and download here. Oh, and it’s free!
As I told Tamron Hall on NewsNation last week, even though the book is geared towards military families, non-military folks can benefit from its financial advice, too. That said, when it comes to their financial lives, military families are different. They face financial challenges that civilian families don’t. For example, they’re typically asked to move every few years, having to make the decision to buy, rent or sell, over and over again. As a result, their cost of living can change with every move, and if both partners aren’t in the military, then the non-military spouse faces the challenge (over and over again) of finding work in a new location.
The goal of this eBook – which is loaded with video content – is to shine a spotlight on those and all of the other financial challenges military families face and offer solutions in a single place. As VaIerie Richards, a military spouse you’ll meet in the videos, explained to me, there’s an awful lot of material out there. But this is the first time she’s seen it in such a comprehensive form. I hope you’ll take a look. And I hope you’ll spread the word to your friends, family and social networks. The place to go is operationmoneybook.com.
Finally, a shout-out to NBC which was able to publish this book thanks to the generosity of Citi. It is the second time they’ve collaborated on an effort to help military families. The first book, Heroes Get Hired, is also available as a free download.
In other news this week….
60 percent of Americans don’t have a budget
It looks like quite a few could benefit from Budgeting Boot Camp, the first chapter of Operation Money. Whether it comes down to inability or unwillingness, roughly 60 percent of Americans don’t maintain a budget, according to the National Foundation for Credit Counseling. In fact, 13 percent of this group couldn’t even tell you what they spend on housing, food and entertainment.
Given the above, WalletHub surveyed the country’s best and worst budgeters by metro areas, looking at financial indicators like the average credit score and the percentage of unbanked households. As it turns out, some of America’s best budgeters are Dakotans. Those residing in Sioux Empire, South Dakota and Fargo-Moorhead, North Dakota, rated first and second, respectively. And not far behind them, in third place, are residents of Rochester, Minnesota (folks here had the highest average credit scores). On the flipside, America’s worst budgeters are based in Las Vegas Valley, Nevada, Albany, Georgia and Greater Jackson, Mississippi. To see how your city stacks up, head here.
WalletHub also offers tips for better budgeting, like feeding an emergency fund. As I always say, you can recover from any financial disaster by saving more – and having emergency savings is — and should be — a top priority. They suggest setting aside a small percentage (2 percent) of your net income every month with the ultimate goal of having about a year’s worth of (after-tax) income in a rainy-day fund. I know that sounds like a huge goal. It is. So if you’re starting from scratch, don’t think that big. Start out with your 2 percent and aim to put away $500 or $1000. Once you get there, think about the next milestone you want to hit. And when your 2 percent starts to feel easy, then it’s time to increase it by another 2 percent. And so on and so on until you’re saving a significant (i.e. two-digit) amount of your take-home pay.
How to cut your utility bill
Sure, we know the basics: turn off the lights when we’re not using them, unplug dormant devices and lower the thermostat this winter. These tactics will save you money, but you should also know that there’s a new crop of alternative and “smart” devices (i.e. advanced power strips, remote-controlled thermostats and high-efficiency light bulbs) designed to cut energy, and save you even more. The New York Times outlines these devices and goes over some questions to consider for overall, home energy efficiency. Like, which is cheaper to use: LED light bulbs or compact fluorescent light bulbs? They’ll both save you money compared with incandescent bulbs, but LEDs are the shining winners here. Why? Life span. Manufacturers claim LEDs can last up to 20 years or even longer, which means they’ll certainly pay for themselves at $10 per bulb.
Also, is turning down the hot water heater still a good way to save energy? Sorry to those who like steamy showers, but the answer is yes. You can save a $1 a month for every degree you turn down your water heater (i.e. 10 degrees can lead to $10 in savings). And to save even more, couple the lower temperature with one of the new smart devices, like a showerhead add-on that conserves warm water. There are heat-sensitive devices, like this one, that reduce water flow to a trickle as soon as the water warms up. (Don’t worry, it won’t feel like you’re showering in a drinking fountain. You can pick your desired showerhead strength once you’re in.) This prevents you from wasting hot water (and money) when you’re letting the shower run, waiting for the water to reach your ideal temperature.
Finally…a couple of quick items you should know about
Next year Social Security checks will rise by 1.7%. What does that come out to? On average, about $22 more each month. More specifically, the average worker will receive $1,328 a month — or $15,936 a year — according to the Social Security Administration. Over 58 million recipients will see the bump come January.
Also starting next year, your contribution limits for tax-deferred retirement accounts (i.e. 401(k)s and IRAs) will increase by $500 to $18,000, according to the Internal Revenue Service. More people will be able to contribute to Roth IRAs next year too. For instance, single taxpayers earning less than $131,000 (up from $129,000) can put money into a Roth account. And for those earning less than $116,000 (up from $114,000) can make a full $5,500 contribution. Head over to CNNMoney to learn more.
Have a great week,
Jean
