'Up-size' your emergency funds for the 'down-sized' military

The New Year is the perfect time to start getting finances in order, whether getting out of debt or working toward savings. The Airman and Family Readiness Center offers many programs to assist people in achieving financial goals. (U.S. Air Force photo by Staff Sgt. Katie Gar Ward/Released) (serial numbers blurred for security)

It's never too early to build an emergency fund, especially considering the current fiscal environment and force shaping programs. The Airman and Family Readiness Center offers many programs to assist people in achieving financial goals. (U.S. Air Force photo by Staff Sgt. Katie Gar Ward/Released) (serial numbers blurred for security)

INCIRLIK AIR BASE, Turkey -- Airmen must be "fit focused and ready" for any contingency and this includes financial fitness and preparedness.

Recent political crises and turmoil on Capitol Hill have highlighted the need for all Americans, particularly military and government workers, to make sure they have sufficient emergency funds. How many of us are financially fit and prepared if the paycheck stops? The down-sizing of our Air Force and recent government shutdown serve as vivid reminders to save for our emergency or transition fund.

But how much is enough?

"Plan for the worst and hope for the best!" Most financial advisors say Americans need at least six to eight months of living expenses in a liquid form - usually a savings or checking account - to pay for emergencies. Emergencies by definition are a sudden, urgent, usually unexpected occurrence requiring immediate action, such as the death or extreme illness of a family member, a significant personal illness or disability, transition from the military without a job, a government shutdown or a furlough.

Each of us can take action to be prepared by building our own emergency fund starting today by making decisions and choices not to spend all our income every month. To calculate how much you need to save for your fund, keep track of your spending for at least 30 days to figure out how much it is costing you to live each month. Multiply this amount by six to eight, depending on how many months you wish to be prepared for emergency fund needs, and then you need to set an annual goal and save a specific amount each paycheck. Your tax return can be a great source for increasing your emergency/transition fund. Continue saving until you reach your goal, and make it a priority for yourself and your family to be financially prepared.

All of us will experience some financial emergency during our lifetime. The government shutdown is only one example of an event that can result in a personal financial crisis. Additionally, while transitioning out of the military may be months or years away, it eventually happens to all of us. Today is the best time to start to build your savings.

Here are some tips that can help you save enough for an emergency fund:

· Identify "wants" versus "needs" using your monthly expense tracking. Realize that every purchase of a "want" reduces your ability to be financially secure for your "needs." Spending money is always a tradeoff.

· Identify and reduce unnecessary spending to eliminate "money wasters."

· Pay yourself first for your emergency fund. Set up an allotment or bi-monthly deposit into an account that you will not touch unless there is a true emergency.

· If you plan to transition out of the Air Force, or any service, develop a 12-month transition budget that shows your military income and expenses versus your projected civilian monthly cash flow after getting out.

All military members, civilians and family members can start saving money today for an emergency/transition fund. Having enough money provides a great sense of freedom from financial worry and stress. If you are financially prepared, you will have the confidence and resilience to deal with almost any financial crisis life throws at you.

For help developing a financial plan to save for emergencies, transition, retirement or other financial goals, call the Airman & Family Readiness Center at 676-6755 to schedule an appointment for a financial consultation.