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By Clay Stackhouse | July 2, 2020

A good house has a strong foundation, and the same can be said for managing your finances. That’s especially important right now as our world changes daily. Understanding the basics and putting those bricks in place with regard to your money isn’t complicated and will serve you well into the future.

I’m going to walk you through the 4 foundational "bricks" that will help you establish a stronger financial footing. These are:

  1. Selecting a financial institution
  2. Knowing the right accounts to open
  3. Creating a budget
  4. Starting to understand investments

Selecting a Financial Institution

When choosing where to bank, take time to find a financial institution that’s reputable. A common mistake is to go with a local bank or one that you have recently seen on an advertisement. Ensure your financial institution can cater to your needs with regard to products and online capabilities. They should offer friendly, supportive and personalized service. Research their reputation and get recommendations from friends and family about past experiences. People who stay with an institution for a long period of time tend to be satisfied. Once we lock down who we're going to use as the foundation of our financial future, we're ready to get started.

Knowing the Right Accounts to Open

Start with the basics: a savings account that yields interest and has no fees (you’ll want to steer clear of hidden charges or minimum balances) and a solid checking account that offers those same benefits.

Often checking accounts come with better benefits if you set up a direct deposit of your paycheck to the account. Doing so also allows you to build your savings through the practice of “paying yourself first,” essentially transferring money to your savings account every payday. Once you have the equivalent of 3 months' salary in your savings account, you’re on your way.

Make sure you shop around and choose the account that will serve your lifestyle the best. There are several ways to access money in a checking account: using a debit card, conducting transactions online or writing checks. Plan to use your checking account to take care of day-to-day expenses and pay bills. Once your checking and savings accounts are in good order, you’re ready to create a budget.

Creating a Budget

Taking the time to sit down and create a budget is critical to our financial well-being. Many online resources can help in this effort. The bottom line of a budget is simple: figure out how much money comes in on a monthly basis, and how much you spend during the same amount of time. It may seem tedious at first to count every penny, but knowing where the money goes is crucial. Separate your spending into essential and non-essential things. Groceries and rent are things that absolutely have to be paid each month, but fast food and impulse buys add up quickly and can be done without. Many people are surprised to find how much they spend on non-essential things once they actually keep track of where their money goes.

Obviously you want to spend less than you earn—but let’s go one better by using the 80/20 rule. This guideline suggests living on 80% of your pay and saving 20%. At first, that 20% should go into your savings account until you save 3 months' pay, as mentioned before. Once you achieve that goal, stick to your budget, and instead of growing your savings account, invest!

Starting to Understand Investments

There are many different ways to invest. There are high- and low-risk options, and to the beginner, it all may seem intimidating. The truth is that investing isn't nearly as difficult as many people think. Navy Federal Investment Services has educational resources that can help and are free of charge. Consider the peace of mind you’ll have by knowing that part of your pay each month is going to be put into something that will make your assets grow. The key is to have fun with it and watch your financial condition improve!

By just following these few steps, you’ll ensure a strong foundation for your "financial house." Now is the time to take some basic measures that can ensure your future financial well-being. Find a good institution and open a savings and checking account. Have the discipline to create a budget and then stick to it. Pay yourself first by using the 80/20 rule to ensure the health of your savings account. Once you build a strong foundation with those firm financial bricks in place, invest.

Need more tailored financial counseling? Sign in to your Navy Federal account and fill out the Personal Finance Information Sheet under "Helpful Resources," and a Financial Counselor will contact you within 3 business days. If you have questions, call 1-888-503-7106.

Author Bio: Clay Stackhouse is a Regional Outreach Manager at Navy Federal. Clay previously served in the Marines for 25 years, having been a Navy Federal member for 34 years. He has a passion for interacting with military families on all things personal finance.


Navy Federal Financial Group, LLC (NFFG) is a licensed insurance agency. Non-deposit investments, brokerage, and advisory products are only sold through Navy Federal Investment Services, LLC (NFIS), a member of FINRA/SIPC and an SEC-registered investment advisory firm. NFIS is a wholly owned subsidiary of NFFG. Insurance products are offered through NFFG and NFIS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of Navy Federal Credit Union (NFCU), are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. Deposit products and related services are provided by NFCU. Financial Advisors are employees of NFFG, and they are employees and registered representatives of NFIS. NFIS and NFFG are affiliated companies under the common control of NFCU. Call 1-877-221-8108 for further information.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.