Debts are not necessarily bad all time. In reality, debts can help you to build your military wealth while you are on active military duty. However, it is very important to you to manage your existing debt burden and keep your expenses in control even when you take out a good debt. If you don’t stress on debt management then you will the stability of your credit score and control over your debt.
Three Rules to Build Credit Manage Debt
For successful military money management you are required to follow three simple but highly effective rules to build your credit and manage your debt. These three rules are as follows:
Use Cash Avoid Credit cards
Make sure you always use cash instead of credit cards. You may tempt to overspend with credit cards as there will be no one to stop your buying hand with credit cards and that means you are inviting financial problems by yourself. On the other hand, when you use cash you know how much you are spending and you fear to lose cash. Moreover, with cash you can control, your spending and debt. Make sure you don’t give unnecessary importance to items like an advanced cell phone, food and clothing.
Make a Monthly Budget
Making a budget is the best way to control how much you spend in a month and how much you will save. However, making a budget is also the easiest thing; following it is the hardest for majority of people. Make sure you cut down all the unnecessary habits and costly addictions.
Utilize the Jar System
You should utilize a magical money management technique called “The Jar System” to keep your spending in control and to build a solid military wealth. According to this system, your monthly income is divided into 6 jars (categories), these are:
- Necessities (50%)
- Long-term saving for spending ( 10%)
- Financial Freedom (10%)
- Education Expenses (10%)
- Play (10%)
- Giving (10%)
All these six jars have distinct purpose in getting your finances on right track. According to this technique you should divide these 6 jars into two portions i.e., reserve 50 percent for necessitates and 50 percent for other five jars. The amount of money you add to each jar is not important but the consistency of feeding each jar is very important.
Military Paychecks
Military paychecks are not as big as you may get from other jobs. Many people don’t join military just for this reason. But if you work with the Jar system, a monthly budget and using cash instead of credit card then you build your military wealth. Make sure you don’t miss or overlook any of these money management methods if you want to achieve financial stability and freedom.
