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Financial security during trying times

  • Published
  • By Chief Master Sgt. Jeffrey Malherek
  • 92nd Civil Engineer Squadron
I believe it is incumbent on every Airman to put as much thought and training into their finances as they do physical or ancillary training. This is an important area of our lives that should receive the level of attention it deserves.

Here are a few slightly modified steps retrieved from to help you become more responsible in managing your finances:

1. Define your goals. Pretty simple step here. If you don't have direction, you'll never reach a destination. We all have goals such as owning a home, paying for our kid's college or buying a boat. After you map out your destination (in prioritized order) you can effectively determine how to save in order to reach that goal.

2. Make a financial plan. Just like a business, you'll want to list everything you own along with everything you owe. The idea is to have more assets than liabilities, thus allowing you to save the "positive" amount for the goals outlined in the first step. This could mean getting out of some debt such as credit cards, student loans, etc. Some detailed action plans to help you in this step can be found at.

3. Determine your risk tolerance. Here is where we get into the "Nitty Gritty." If you are debt-free or close to it, then now you embark on saving and investing to meet those goals you have outlined for yourself. A savings account is the bedrock of your plan as these dollars could serve as an "emergency fund," to help avoid 'bad' debt. Most financial professionals recommend having an emergency fund equal to three to six months of your base pay. Investing implies that you'd like a slightly higher return for your money, which involves greater risk than saving. Depending on how much risk you can handle will depend on which investment vehicle is right for you. Don't blow over this step. Most professionals will tell you managing your risk tolerance is key in maintaining a balanced perspective when it comes to investing.

4. Investment Products. For just getting started, your best bet is to learn about stocks, bonds and exchange traded funds. The 'Save & Invest' website recommends mutual funds, however, exchange traded funds, or ETFs, offer many advantages over traditional mutual funds which are beyond the scope of this article.

5. Pick a financial Professional. In the world of online banking, discount brokers and tons of free investment information, I disagree with the 'Save & Invest' website when they say you should actually "hire" a financial professional. Unless you have absolutely no interest in managing your own money, I find investing a worthwhile endeavor that can pay you back over time. While it takes some learning upfront, you'll gain a sense of confidence and understanding while at the same time edging ever closer to your financial goals.

A few books that may help you in understanding how to invest include: "The intelligent Investor: The definitive book on value investing" by Benjamin Graham, "How to make money in Stocks: A winning system in good times and bad" by William O'Neil and "The disciplined investor: Essential Strategies for Success" by Andrew Horowitz.

In closing, I'd like to offer some simple words of caution. Don't try to rush investing, without going through all the steps in order. You need to walk before you can run. Taking the time to understand your entire financial picture and educating yourself will translate to fewer frustrations down the road. Good luck!