Jacob’s Money Story

By Melissa Tosetti

My nephew Jacob joined the Navy last summer.  We’re all extremely proud of him!

A few weeks ago, I received a message from him via Facebook, asking for advice.  He has signed up for a five year military commitment and from a financial standpoint, wants to make sure he uses the time wisely.  What he really wanted is to figure out how to build wealth.

I wish I was that smart and responsible at his age!

When we started working together I learned that he has three months of expenses saved, as well as a CD and best of all, enviably few expenses.

He knew saving money is important, but in his goal to build wealth, wasn’t sure how much he should be saving.  Consequently, every time he went out to dinner or bought anything that wasn’t a need, he felt a little guilty about it.

Simply put, because he didn’t have an overall plan, money spent felt like money misspent.  So, we set up a Spending Plan for him.  Because he has so few expenses and plenty in an emergency savings account, we were able to have him pay all his expenses and get a nice chunk of fun money out of his first paycheck of the month.  We then set up a system for all of his second paycheck to go toward his wealth building goals.

At the time of this writing, he’s in San Diego waiting orders.  While doing so, he’s following the plan and responsibly enjoying that money we set aside for the fun stuff.  However, when he goes to sea, we created a plan for him to put that fun money into a dedicated savings account. That money will have a chance to build so when he comes back, there will be a wad of cash waiting for him to have fun with – like go on a much-deserved vacation.

I gave him very strict orders to SPEND that fun money when he gets back and enjoy himself.  He’s in an enviable position in that he’s able to put HALF of his income into his wealth account, building a whopping good financial foundation.

By giving himself permission to use that fun money, he’s also giving himself an opportunity to enjoy himself as he builds his wealth.  That’s the definition of Savvy Living – to build a strong financial foundation while enjoying the journey.

Jacob, again, thank you for your service!