Airmen urged to budget, avoid financial trouble Published Oct. 17, 2008 By Brandic Armstrong Tinker Public Affairs TINKER AIR FORCE BASE, Okla., -- There is a difference between "want" and "need." Yet, too many Airmen discover the difference the hard way: through trial and error. In an unsteady economy where gasoline prices have reached well over $3 a gallon then plunged back down, a steady paycheck and beneficial advice could be the difference between financial security and bankruptcy. Tinker officials are offering techniques to help base personnel avoid debt and frivolous spending, while planning for the future. "I see more Airmen - young and career enlisted members - who have not established a budget, and as a result they are continuously bogged down in way too much debt, " said Rickie Smith, community readiness consultant and personal finance manager at the Airman and Family Readiness Center. "I think the most important thing for them to do is establish a budget and stick to it. It takes a lot of discipline, commitment, and hard work, but the sacrifice is well worth the long-term effort." Mr. Smith said the steps to developing a budget are relatively easy. First, an individual should determine how money is being spent each month. The individual should examine how much is spent on bills, debts and frivolous purchases, plus how much money is put into a savings plan. The budgeting process will quickly determine if an individual has a positive or negative cash flow. After the expenses are determined, Mr. Smith said an individual should sit down with family members, and set a financial goal. Based on their needs, the family should decide the goal's purpose - to pay off a debt, save for college or a vacation, or to purchase a new vehicle - and if it is a long-term or short-term goal. Once it is determined, family members should prioritize incoming money to divide it appropriately among necessary expenses. "Every family member must buy into the effort it is going to take to reach that financial goal, and act accordingly," Mr. Smith said. But, budgeters should make themselves the highest of priorities. "Most people don't think about including themselves in the budgeting process," Mr. Smith said. "We all work very hard on our jobs every day, but what we don't do is reward ourselves monthly in the form of a regular payment, just like a bill. That's one of the first things we should do when creating a budget - 'pay ourselves first.'" Mr. Smith said a minimum of 10 percent per paycheck should be put toward the emergency fund or savings account. Emergencies may include a death in the family or an unexpected car repair. Ideally, the fund should hold two-to-three times the amount the individual makes in one month. Should something happen, the fund would likely pay for an unexpected expense or emergency, without compromising an individual's daily lifestyle. It can also pay for a trip or household item. Regardless of how the money is spent, the account should always have at least $1,000 to $1,500 for an unforeseen expense, Mr. Smith said. Once an emergency fund or savings account is established and the goal reached, an individual is encouraged to prioritize debts to credit cards and department store accounts. After ranking the debt based on highest interest-rate to the lowest interest-rate, Mr. Smith said. If there is anything leftover, after paying oneself and bills, Mr. Smith said, it should be used toward reducing debt, not frivolous spending. The Airman and Family Readiness Center offers several classes for personal finance. They include "10 Steps to Financial Success," "Plastic Surgery: Getting out of Debt," "Solving the Mystery of Credit Reports" and "Breezing through the Holidays." The center will also sponsor a financial road-show Nov. 5, in which guest speakers discuss personal budgets at the all-day event. For more information or to get financial help, call the Airman and Family Readiness Center at 739-2747.