Mid-Year Military Money Check In | Military Money Manual Podcast Episode 86

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Jamie and Spencer Reese from militarymoneymanual.com discuss evaluting how your financial goals are going for the year.

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email podcast@militarymoneymanual.com.

Military Money Manual Podcast Episode #86 Links

Outline of Episode:

  • Evaluating goals & savings
  • Reviewing your credit report 
  • PCS season and state income tax
  • Planning for future expenses
  • Reviewing estate planning & insurance

Military Money Manual Podcast Episode #86 Transcript

[00:01:47] Spencer: Hello, podcast listeners, and welcome to the Military Money Manual podcast.

I'm Spencer Reese from militarymoneymanual.com. Today, I'm joined in person with my co host, Jamie. Hey, Jamie. Good to see you. 

Today, we're talking about a halfway check. What you should be thinking about. Halfway through the year. So it's July. I googled this, but July 2nd is technically the halfway point of 2023.

And today, Jamie, we're going to talk about a few topics, a few ideas of what people should be thinking about for the second half of the year.

[00:02:29] Jamie: Yep. So we've done this the past two years, end of year review episodes and beginning of the year goal setting. So halfway through the year is a great point to first of all, look at your goals that you set at the beginning of last year, at the beginning of this year and see how your progress is going. Are you meeting those goals? Do you need to adjust your goals? Do you need to readjust your spending or savings to meet those goals? And basically just look at seeing what was important to me six months ago and how am I doing on that? 

So it could be, do I need to save more?

Do I need to tighten down my budget? We're not advocating saying you stop spending. It's just what did you think was important six months ago and how are you doing towards that goal now? Halfway through the year, you should have a pretty good gauge on if you're going to make it this year.

[00:03:13] Spencer: My wife probably wants me to stop spending.

[00:03:16] Jamie: probably. We also, having just PCS, our spending is just insane right now. It'd probably be good for us to get that in control.

[00:03:24] Spencer: Actually, it's interesting you brought that up because that's one thing that I've looked at, I signed up for Mint at the beginning of the year because I really wanted to get a handle on, I feel like I lost track of where my money was going, where for the past couple of years, I haven't really budgeted because I had everything dialed in and there were some big lifestyle changes this year with a new job and moving.

And I just didn't know where my money was going anymore, so I signed back up for Mint. And some months, it was a little shocking how high the numbers were, but when you start digging into it, as long as it's aligning with your values it's hard to say that was wasteful.

[00:03:59] Jamie: But one of the things that if, say, for example, you set the goal of wanting to max out my Roth IRA for the first time this year, In 2023, it's $6,500 is your max for the year and if you haven't now into July of 2023, if you haven't contributed $3,800 to your goal of maxing your Roth IRA out, then you know that it maybe doesn't align with your values and maybe you need to reevaluate what we said was important, maybe together as a couple or with my partner.

Our goal was this and now we've only contributed $1,000 to our goal of $6,500 and you're well behind GlideSlope at that point. And same for the TSP, if you're looking at $22,500 for the year, then what is that, $13,000?

[00:04:43] Spencer: Yeah, I think we calculated $13,125.

[00:04:46] Jamie: So it's very black and white objective numbers. If I'm doing okay halfway through the year.

[00:04:52] Spencer: Yeah, and I think if you, I've got this chart on my website where you can put in, you can just look up your grade and years, and it tells you how much you should be contributing every month to the TSP and in order to max it out by the year.

If you've put that number in December last year, so it kicked in January of this year, then you should be on cruise control and you should be ready to go and really what you should be thinking about is, okay, what number am I going to be putting it in December of this year? So then 2024, I can max out my TSP again.

Some of the other things, Jamie, that people often talk to us about are our savings and not just saving for retirement and IRA and TSP but with the summer PCS season, maybe you've tapped a lot of your savings, maybe you set, you were good and you set money aside to move across the world and move across the country or across the state, and now you realize, maybe I'm a little cash strapped right now, and I gotta rebuild this cash, especially when it comes to emergency funds.

Yeah. It's really easy for everything to become an emergency, especially when you're in the summer PCS season, and I get it we tapped our emergency fund. And it always seems like it doesn't rain, but it pours, right? Like, all of a sudden not only are you PCSing, but your car breaks down. And, oh, by the way, there's a death in the family and now you have to fly to a funeral, right?

And there's so many things happening all at once. And when you have the money set aside, it's great because it does remove that little bit of stress. But when you get through the storm, you have to look, okay, what damage was done and how are we going to rebuild that emergency fund?

[00:06:24] Jamie: And if you need to temporarily lower your TSP or IRA contributions to build that back up, that might not be a terrible plan for you and your family. Just evaluate what matters most to you now. 

Another thing I like to do halfway through is it's a good time to pull your credit report. You can go to annualcreditreport.com and it's the one that the government sponsors to make sure each of the three bureaus give you a free credit report and you can see, make sure new accounts have been opened that you weren't expecting or anything like that.

Whether you want to check your score or not, there's plenty of ways to do that for free. But at least getting a credit report of the accounts and new accounts, especially, is a good time to review at the middle of the year.

[00:07:04] Spencer: Yeah, and speaking of the summer PCS season, if you've moved to a new state, maybe you're now in an income tax free state.

So that could be Florida, could be Texas, could be Washington state. And maybe you move, you're moving from a state where you were paying state income taxes. And this could be a great opportunity  if you have the intention of residing in that state after you leave active duty service, go to your finance office, file the paperwork.

It's a simple one page form and declare your state of residency to be in the state that you're now residing in and you can reduce your state income taxes. And the great thing about that is if you have a spouse that works, thanks to the Military Spouse Residency Relief Act, and you can Google this and look at Military OneSource is a great resource on this, but they can also declare their state of residence to be your state of residence, and then you guys can both save on state income taxes.

If you've moved recently or you have a move coming up, take a look, look into this and take advantage of the fact that the military moves you around a lot and you'll probably run into a state where you don't have to pay state income taxes and the bar to setting up your residency there is very low.

You don't need to have a driver's license. You don't need to have a car registered there. You don't need a house there. You just have to have the intent to reside in that state after you leave active duty service. And that's a pretty easy hurdle to cross.

[00:08:23] Jamie: Another thing I like to do at the midway point is look out to the future.

So some things coming up, maybe a big vacation or Christmas gifts, whatever you're saving for the rest of the year, you can just analyze, are we on track to meet our targets? School, back to school time is coming in a couple weeks or a couple months for most people with kids. So new school uniforms, new books, new school supplies, all those things that come with back to school time and start setting aside for those goals now so you're not caught off guard, dipping into emergency savings or being tempted to in a few weeks.

[00:08:56] Spencer: Yeah, and the final thing I'll mention, Jamie, is since we're doing this kind of mid year review anyways, is why not take a look at your estate documents, like your, and it doesn't have to be your full will, it doesn't have to be your advanced medical directive, but just take a look at your SGLI, in the Air Force we have this thing called vRED, make sure that's updated, make sure your beneficiaries are properly designated, so in case, God forbid, anything happens to you, it's going to be easy for your family, easier for your family to sort out what to do.

After the fact, and also make sure that if you've especially, we're talking a lot about PCS here because people are moving over the summer, but look at your insurance. If you've moved states or you moved overseas, you have to update your insurance, you have to make sure that your vehicles are insured at the place that the vehicle resides, even if your state of residency like for me, it was back in Texas, I was living in Hawaii.

And you just got to tell USAA or GEICO, whoever you have your insurance through, Hey, the vehicle lives here. And so I need insurance in this state. Remember, it's the vehicle that's insured, and the driver attached the vehicle, but really it's the vehicle that's insured. And actually, I just learned about this recently because I had a bunch of friends coming over and borrowing my car.

And I was like, do I, how does insurance work? Like some of them are foreign, like they don't have US insurance, it's a vehicle that's insured. It's not necessarily, and if I let somebody borrow the vehicle, my insurance covers them. But yeah, those are some things I'm thinking about, at the mid year review.

Anything else you want to add to that, Jamie?

[00:10:21] Jamie: No, those are all great tips, Spencer. Thanks for helping walk through the mid-year point review. Holidays and big spending things like Christmas, gifts, and holiday season will be here before you know it. And so just as always, we encourage you to bring awareness to your financial situation, plan ahead, be intentional, and take ownership of it.

That way there's less stress involved in PCSing or holiday gifts, being generous with your money back to school time. We don't want these big crunch points to be stressful for you.

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