The job of a law enforcement officer is often stressful, demanding, and dangerous. The lifestyle and culture of law enforcement affects more than just the officers. Spouses, partners, parents, children, and companions of law enforcement officers play an integral role in an officer’s health. Just as your mental and physical wellness on the job is important, your financial health is equally as important.
As of October 2022, two-thirds of working adults said they are worse off financially than they were a year ago, according to a recent report by Salary Finance.
What is Financial Health?
Financial health comes about when you have a plan that enables you to build resilience and thrive financially.
According to a 2020 Community Oriented Policing Services study from the U.S. Department of Justice, law enforcement officers across eleven different police departments showed improvements in performance, attitude, and general well-being when they took advantage of financial wellness services.
Below are several things to consider so that you and your family are financially stable and thrive for generations to come.
Build an Emergency Fund
- • Could you come up with $2,000 within a month if an expected need arose?
- • Do you agree that you have too much debt right now?
- • Have you set aside funds that would cover your expenses for at least three months?
Saving money can be a challenge but having money for emergencies is crucial. Pay yourself first. Have a portion of your paycheck direct deposited into a savings account with a goal to save three to six months of expenses in case of an emergency.
Set financial savings goals. Have a vacation coming up? Need a new car? Making a major purchase? Calculate how much you will need to save and when you need the money this will help you know how much you will need to save each month to reach your goal.
Prioritize Your Spending
Overspending can be easy to do in a culture where credit is the accepted norm. Being conscious of your spending is central to maintaining a healthy budget. Start by creating a spending plan. When creating a spending plan, prioritize your expenses into categories such as:
- • Flexible expenses such as utilities and groceries
- • Savings to reach your savings goal, even if you start with a small deposit
- • Extras like vacations, date nights, and activities with the family
Challenge yourself to track every purchase for one month to see exactly how much you spend per week. You might be surprised how much you spend on items that can be scaled back or eliminated giving you greater flexibility with your spending plan.
Keep Tabs on Your Credit History
It is important to know how your spending habits may influence your credit history. Visit AnnualCreditReport.com, a trusted “one-stop-shop” to check your credit reports from Experian, Equifax, and TransUnion– the three industry-standard credit bureaus.
Keep tabs on your credit score. Credit scores range from 300 – 850. The average score in the United States is 700. Your credit score is calculated using several variables to determine your credit risk. Each piece of a credit score carries a weight and influences your overall score.
- • 10% Credit Mix: Your mix of credit cards, retail accounts and loans
- • 35% Payment History: Your history in paying past credit accounts
- • 30% Amount Owed: Your amount owed on credit accounts
- • 10% New Credit: Opening several new credit accounts in a short period of time may represent a greater risk
- • 15% Length of Credit History: The length of time since you last used a credit account
Monitor Your Debt
Salary Finance reports that:
- • Nearly 8 in 10 adults in the U.S. have debt
- • Seventy-six percent of people in the U.S. live paycheck to paycheck
- • The average household in the U.S. owes more than $135,000 in total debt, including mortgage, auto loan, credit card, and student debt
Debt is another critical component of a spending plan and a significant contributor to financial wellness. Not all debt is bad. Many of us cannot buy a house or car without taking on some debt. These debts can be an investment in your future. However, it is vital to evaluate the amount of debt you are capable of handling and how long it will take you to pay off the debt.
Reduce Your Debt
A heavy debt burden can impose financial risk. While you may be able to sustain a higher level of debt and a comfortable lifestyle, economic shocks can potentially place a heavy strain on your spending plan, especially in the absence of savings.
- • Pay off debt with the highest interest rate first to avoid paying more than necessary
- • Pay more than the minimum payment if possible
- • Set payment goals and celebrate when you reach a milestone
- • Evaluate the benefits of consolidating debt– you may be able to get a lower interest rate by consolidating your debt, allowing you to lessen overall debt sooner than later
The Path to Financial Wellness Starts Here
At Justice Federal, we realize life has its ups-and-downs. An unexpected financial setback can make it feel like your world is caving in around you.
Our partner, GreenPath Financial Wellness, is a trusted national nonprofit with more than 60 years of helping Members build financial health and resiliency. As a Member of Justice Federal, GreenPath’s services are confidential and complimentary.
No matter what your goals may be, GreenPath can help you take control of your day-to-day financial choices to create more opportunities for achieving your dreams. Connect with a GreenPath Counselor today by calling 877.337.3399.
Join Where You Belong
Justice Federal has been proudly serving the justice and law enforcement community since 1935. We look forward to welcoming you and your family to our Justice family. To join or learn more about our products and services, visit us online at www.jfcu.org or call 800.550.5328.
Learn more at www.jfcu.org/LawEnforcement