Tag Archives: financial readiness

In it to Win it: Basic Training for Your Finances

Money-coin-stack300pxThe Department of Veterans Affairs reports service members are twice as likely to have credit card balances of $10,000, or more, than civilians. The typical recruit is a young adult without much experience in managing money. It’s never too late to make changes, but it requires a new mindset.

Taking control of your finances is like the paradigm shift marking the first day of basic training. Using a similar “in it to win it” approach to financial choices means a more stable future.

Avoid Scams and Pitfalls
Payday loans and other short-term, high-interest lending offer a quick fix, but experts say it’s the worst decision you can make. Average interest rates on a two-week loan are 391 to 521 percent, according to the Center for Responsible Lending. Car title loans, which use your vehicle as collateral, also charge interest rates in the triple digits; plus, you could find yourself without a car if you don’t repay in full. Instead, hit the reset button:

  • Create a practical action plan cut back on expenses, pay down high-interest debt and build an emergency savings fund.
  • Take advantage of the Thrift Savings Plan, or use your bank’s automatic debiting feature to set aside a portion of your paycheck.
  • Consider US Savings Bonds. Always shop around for the best bank rates.

Save Money Every Day
Nickels and dimes add up to dollars. A recent survey shows military families are cooking instead of eating out (58%), clipping and clicking coupons (43%), buying fewer clothes (49%), and bringing a packed lunch to work (49%). Think of saving as a game and build it into your everyday life.

  • Good planning starts with a budget. Know what is coming in and going out. There are many good apps out there to help.
  • Opt for paying cash instead of debit cards or credit cards.
  • Create a cash envelope system – literally putting cash in envelopes marked Groceries, Shopping, Utilities, etc. – to make sure spending stays in check.

Plan for the Future
Do you want to send your children to college? Buy a house? That requires planning. Don’t live for the moment; think ahead to the 20-year mark. What will you do and how will you pay for it?

  • Consult a professional. Every installation has a designated Personal Financial Manager available to help you, at no charge. If you want to take it to the next level, hire a certified financial planner.
  • Volunteer members of the Financial Planning Association offer free, unbiased financial coaching across the country. They can help you create a budget, readjust after deployment, and learn about types of investments.

Aim for Financial Stability
Serving in the Armed Forces is a job that comes with sacrifices. Your financial well-being shouldn’t be one of them. There are many resources out there, from apps to trained professionals, who can help you get a handle on your finances, but it all starts with your decision to act.

Have you used any of these tips before? Did they work?

Posted by Marie Hickman, a former military spouse and blogger specializing in saving money, personal finance, and frugal living. She writes for Valpak.com and other websites.

My Military Family Paid off $20k in 13 Months: Here’s How!

financial-freedomThere we were, sitting on our couch, looking at our online banking while deciding what to do for dinner. My husband and I did a double take simultaneously, “We only have $37.00 to last us until next payday…which is 5 days away.”

We were scared.

We sat quietly, surrounded by all of our things; 48” flat screen, two new cars in the driveway, brand new shoes, and that wreath for the door I just HAD to have. We were chained to our things, reflecting on how we’d gotten there.

We were both just 23 when we got married, he’d been in the military for a little over three years, and I’d only been out of college for a year, and had lived with my parents only a few months earlier. I thought we were on the straight and narrow with our finances – I had a full time job with the state government that paid me about $32,000 a year, and our rent was covered, thanks to BAH. We were golden. Or so I thought.

It wasn’t until that day with only $37.00 in our joint account that I realized we needed to find a new way to manage our money. We had no savings, and had bought a brand new bedroom set with the few thousand dollars we got from wedding guests. Newlywed life was paycheck to paycheck for us, and at the time, I thought it was okay. At least we had a nice bedroom set. In reality, we were one ‘emergency’ away from having it all come crashing down. Ironically, my husband is a Command Financial Specialist, and has counseled many other Sailors with their own finances.

So, in 2012, after 3 years of marriage, and pushing countless paychecks to the brink, we took control of our money. We didn’t want to see what would happen when the ‘rainy day’ came without a decent umbrella in tow. By this time, we had PCS’d to another state, and I had gotten a new job, paying $34,000 a year.

We decided to take a popular religious-based finance class at our local church. There, we learned how to pay down our debt in the fastest way possible – from smallest to largest. We figured out how to account for every cent and give each penny a purpose. And we stopped using our debit cards for anything except gas, and to pay our bills online.

We cut back tremendously, and used cash for everyday things: groceries, dog maintenance, and the occasional lunch or dinner out. Every other dollar went towards our debt: two car payments and school loans. By following this plan, we paid off nearly $20,000 in 13 months, on top of our usual monthly bills.

Today, we still use a ‘cash budget,’ and put hundreds, sometimes thousands, of dollars into our emergency fund each month. ‘How-in-the-world-will-we-be-able-to-pay-for-this’ emergencies are now just little inconveniences. Like the time our dog got sick while we were on vacation, and we rushed her to the doggie emergency room. Nearly 4 hours and $475 later, we paid in cash and took our fur baby home to mend.

Many military families live paycheck to paycheck – like we did.  But this does NOT have to be your reality.

February 23-28th is Military Saves Week, when service members and their families are encouraged to take the pledge to start saving and put your family on the path to financial freedom.

As an incentive for you (yes, you!) to take the pledge and start saving, if you send us a photo of who or what you’re saving for, you’ll be entered to win a $100 gift card to help get started! Send your picture to Social@MilitaryFamily.org, and be sure to include your name, email address, and what you’re saving for!

Have you found an awesome way for your military family to save money? Share it with us in the comments!

shannonPosted by Shannon Sebastian, Content Development Manager

Can Military Families Save Money on One Income?

calculator-and-coinsMy last paycheck came in, and it was a small one. I had just quit my job but had another one lined up, so it wasn’t a big deal. But on that day, I looked at my bank account and asked myself, where did all the money go?

My bank account reminded me of a clock moving counterclockwise. I thought about all the jobs I’ve had, from part time to full time to side jobs, and thought about where all that money had gone. I even wondered the same thing during the stint where I ended up with unemployment benefits after a layoff. If I had only just put all that money away and made it to where we lived off his salary, I could have a few thousand dollars in a savings account by now. But it didn’t happen that way.

My husband and I are blessed that we can survive on his salary alone, so whenever I have had a job, I’ve taken on the grocery bill, gas for my car, my bills, entertainment, graduate school (out-of-pocket, and a pretty penny), half of the daycare expenses, and anything else that was, what I consider, a minor expense. That way, it doesn’t go under my husband’s list of expenses.

However, some of the jobs I took never paid enough for me to actually put a good chunk of money away in savings because of these same expenses. And that’s a major problem for military spouses. Granted, I am also not the best saver, but when you have a low-paying job coupled with everyday expenses, I was left with no motivation to even put a mere $20 away. And with school-aged kids now, something always comes up. So many small things get in the way of saving.

Speaking of something always coming up, I had to get new clothes for work because my size changed after I got married… and after I had kids… and after I stopped having kids. Thankfully, I always headed for the clearance racks, and that helped me save some money. I also bought clothes for my kids as they got bigger. The money we could have saved would have been spent on other necessities, first and foremost, but also entertainment things, so I don’t regret the purchases.

It’s not all a loss though. I’ve been able to put money away while I’ve been employed, and kept it safe from my spending habits, but the amount is not nearly enough. I wish I did have a few thousand dollars saved up. We do have a family emergency fund, and it’s a nice little cushion, but for my personal financial well-being, my own savings are not enough for what I’d like.

Now, getting ready for a new PCS move, I hope to find a better job that pays more so I’m motivated to save more. I also want to find where I can cut my expenses so I’m not left with the lack of financial motivation to put a little money away.

February 23-28th is Military Saves Week, where military families take charge of their own finances and savings. Don’t wait until your bank account dwindles to nothing – living paycheck to paycheck doesn’t have to be your reality. Take the pledge to save NOW.

And to make the deal even sweeter, if you send a picture of who or what you’re saving for to Social@MilitaryFamily.org, you’ll be entered to win a $100 gift card to put towards your new savings goal!

Are you a one-income family? How do you save money?

Posted by Sylvia Salas-Brown, Military Spouse and National Military Family Association Volunteer

This Little Piggy Bank Went to the Slaughter House

money-resolutionsThere once was a little, plump piggy bank who lived in a Marine Corps house. From time to time, it was fed with quarters, pennies, and lint. It was a happy piggy bank, growing heavier and heavier, until one day it met its unexpected demise, thanks to the swing of a hammer.

My husband started a Thrift Savings Plan (TSP) just a few years ago. Because we’ve had to wait a long time for a Veteran’s Administration (VA) retirement rating, we’ve had to reach in and cash it out because things haven’t worked out exactly the way we had planned with our financial stability. We’ll have to pay taxes on his TSP for cashing it out early, but we are in a bind and don’t see any way around it. I could kick Murphy’s Law right now.

We have three piglets (I mean children…don’t tell them I said that) at home to support. And as you know, life happens, and so does the unexpected. Our dog, a tiny Yorkie, was attacked while on a walk by a huge and ferocious dog, resulting in a $1500 vet bill, and over the years, our cars have needed major repairs, costing us major bucks. We could have bought “new to us” used cars for the amount we paid in repairs and I swear the last car we had was a lemon. It might have been more useful to us sitting on bricks in a hillbilly front yard. Another time, I needed an emergency root canal, and just recently my crown fell out. I know that’ll need to be fixed – I’ll put that on the list of stuff to do, worry about, and come up with the funds for. I could go on and on.

I think the biggest financial heartache for us was when we received six weeks’ notice to move across country from California to North Carolina, just after the housing market crashed. We had a house that depreciated in value, and we were broke for six months until it sold. We had to get a rather large personal loan to pay the difference of the house. It took us five years of huffing, puffing, and working our tails off to pay it back. We tried applying for a government program that helps military families recuperate financial losses due to Permanent Change of Station moves, but like many others, we were denied.

Even when we thought we were saving for a rainy day, that rainy day would turn into a hurricane with gale force winds blowing our little piggy bank over, smashing it to the ground. All of our nickels and dimes scurried into somebody else’s fat, overfed piggy bank.

Our little piggy bank has gone to the slaughter house many times. So how can you avoid it? My advice is to set up a TSP account NOW, put as much money as you can into your little piggy bank every paycheck, even if it’s only a few dollars, talk to a personal banker who can give you advice. Go to a retirement seminar with your spouse and be on the same page with them about finances. Buy used and save the difference; not everything you own has to be brand new, your brain seems to understand spending when you pay with cash, but not so much when you pay with a credit or debit card.

Most importantly only buy something if your little piggy can afford it, and it will go “Wee, wee, wee! All the way home.”

February 23-28, 2015 is Military Saves Week, where military families are asked to take a pledge to save for their financial future. Best of all, it’s as simple as 1-2-click! Check it out and take the pledge for yourself or your family! As an incentive to pledge, send us a picture (Social@MilitaryFamily.org) of who or what you’re saving for, and you’ll be entered to win a $100 gift card! 

Posted by Amy Smith, Marine Corps Spouse

Financial Freedom Awaits: Apply for a FINRA Military Spouse Fellowship March 2!

financial-counselorSince I was young, I have been frugal and purposeful with spending money, and I’ve always been great at placing money aside. In my adult and married life, I’ve learned the importance of saving with intention. But I’ve also discovered the importance and power of goal setting. It’s far more powerful to know what one has in mind for the future, especially when it comes to financial freedom.

We have been debt free for five years now. From this experience, it inspired me to join the personal finance field. As a military spouse Financial Industry Regulatory Authority (FINRA) Fellow, I overcame my first challenge as we moved from New Jersey to Arizona. I was beginning my fellowship towards becoming an Accredited Financial Counselor® during a permanent change of station (PCS). I knew that it would take a couple of months for our family to feel settled, so it was a challenge, at first, to find a program that would take me on as a fellow, knowing I was also managing a household after a cross-country PCS move.

I began by teaching the financial literacy curriculum to the Girl Scouts of Southern Arizona troops of Cochise County. Then I got connected to a program within the 4-H Cooperative Extension at the University of Arizona-South, called Launch into Life. Through Launch into Life, I was able to teach high school students about the importance of financial planning, along with other skills, like career planning, interviewing, and resume skills.

It wasn’t until I was trained as a Virtual Client Services Representative for Operation Homefront that I began to accumulate the majority of the counseling hours required by the FINRA fellowship program. I was fortunate to find a Certified Personal Financial counselor, who helped me find a volunteer opportunity within the Soldier for Life Transition Assistance Program. I also had the opportunity to volunteer as a personal financial instructor, teaching National Guard and Reserve Soldiers how make informed decisions about employment using monthly budgets, and I volunteered my time during the tax season with the Volunteer Income Tax Assistance program (VITA) for low income families in Sierra Vista, Arizona. The challenge of moving to a new duty station was overcome by getting connected and building a network. The more people I helped, the more these very same people helped me find other opportunities.

The best part of being a FINRA Fellow is getting to see someone understand that money is absolute – a dollar is still a dollar. Money can’t control you, but you can control money. I witnessed children as young as kindergarten learn about wants vs. needs, high school students understand a salary of a cashier does not allow for certain luxuries, like having cable television, and Soldiers having a better understanding of their income vs. expenses – a concept not known unless a monthly budget is made and followed. There are certain things that need to be kept in mind as one begins to accumulate wealth, whether it’s a few hundred dollars, or a thousand; you can either continue to save and spend the same amount of money you always have, or you can learn to adjust your spending habits and save a greater percentage of your income.

Three things to always think about while getting your financial ducks in a row:

  1. You don’t need to make more money to be able to save… simply spend less.
  2. If you don’t have the cash, do not buy it.
  3. Credit cards are not an emergency fund.

Becoming debt free has afforded my family the freedom to be able to give more to help others. It’s lessened the financial stress as we get closer to retirement. Now we can save more…and worry less.

Are you interested in changing your future? FINRA will be accepting applications for their Military Spouse Accredited Financial Counselor® Fellowship from March 2 – April 7, 2015!

Posted by Cynthia Geisecke, FINRA Military Spouse Accredited Financial Counselor® Fellow

It’s OVER: How MilSpouses Can Provide Financial Stability at the End of a Military Career

family-with-wounded-dadYou are a military spouse. Your soldier, sailor, or airman serves the nation anytime, anywhere, and you stand behind them with pride. When the call comes, you watch the uniformed rows march into the aircraft or ship, heading away for however long the nation requires. And you smile and show support, even though you are worried, and already desperately missing your service member.

With one in five service members now disabled because of combat, injury is always at the forefront on one’s mind. Unfortunately, the chances of injury seem higher than any of us are comfortable with. But there are ways to prepare your family financially, should the unthinkable happen. Even transition and downsizing present a quick ending to what your service member thought would be a long, prosperous career.

As a former Army NCO, who had his career halted by an unexpected medical issue, I think income is the key focus to make sure your family is prepared. If your service member returns with an injury requiring them to stay on active duty for rehab, the impact on your income won’t be significant. However, if the injury results in a medical discharge, the impact can be severe. A sudden discharge can leave service members drawing a disability check that is a fraction of what they had been receiving. Many also may struggle to find new jobs to maintain their income, while they adjust to their ‘new normal’ of life after injury.

Service members transitioning may have to wait months to receive a Veterans Administration rating, or to even receive their first retirement check. Planning ahead for these moments can guarantee your family’s financial success.

This is where military spouses can step in. Educational opportunities exist, not only for military service members, but for military spouses, too! There are many programs, like MyCAA, for example, which provide access to educational funding for military spouses. Did you know the National Military Family Association provides scholarships for spouses, along with many partnerships with colleges, and even programs that offer reduced tuition rates?

The possibility of a PCS brings up concerns for traditional classroom programs. Can you transfer credits? What if you PCS in the middle of a semester? Will your specific degree even be offered in your new location? NMFA’s scholarships can give you the opportunity to engage in a certificate, or degree program, online. With online degrees, PCS moves are no longer a concern. Wherever you go, the school goes with you.

Taking advantage of these opportunities now, rather than later, can put you in a position to be an additional income, should injury, transition, or sudden discharge ever sideline your spouse. Having the option of using a degree or certificate to obtain work while your service member is recovering, or job hunting, can relieve the stress of suddenly having to live off of a significantly reduced income. It lets your spouse focus on recovery, a new career, or adjusting to a post-uniform life, and helps ease the stress your spouse may face feeling like they are letting the family down.

You are a military spouse. You are part of a team. While your service member is away, you maintain the home front. Just as your spouse is expected to engage in military readiness, you have a role in maintaining family readiness. Take advantage of what is available for you. Plan ahead, get educated, and be prepared to take over if transition, injury, or some other unforeseen event knocks on your door.

What do you think are some other things families can do to financially prepare for emergencies?

Posted by James Hinton, Staff Sergeant, U.S. Army Veteran

Saving Money on a Military Income: It CAN be Done!

piggy-bankWhen it comes to saving money in a military household, most of us wonder where all this “extra money” is supposed to come from…especially for families in the enlisted ranks. When I was a new military spouse, my husband and I lived paycheck to paycheck. There just didn’t seem to be any other way to do it. How could we save money if there was barely any money at the end of the month?

Like myself, I think many military families may have trouble figuring out where to start, and how to make life something other than ‘paycheck to paycheck.’ And what if an emergency happens? Just charge it to a credit card, right?

Then I learned otherwise.

On a quest to get serious about our financial well-being, my husband and I paid off over $17,000 of debt in just 14 months. All by learning how to save. We followed Dave Ramsey’s Financial Peace University. The trick we used was simple: don’t spend money.

WAIT. Hear me out!

We simply cut back on things that didn’t seem necessary: eating out every day for lunch, buying new clothes just because they’re on sale, or swinging by Starbucks on cold mornings. Oh, and using our debit cards.

Yep. We started using cash for everything.

With certain techniques, we learned to spend less, and save more.

Save Money for the Fun Things
Instead of impulse shopping with money you don’t have (i.e., credit cards), save your money for big purchases. This will give you time to shop around for the best deals, and may even give you time to think about whether what you’re buying is really necessary.

And there’s something to be said about paying for things in cash. Try it sometime and see how it makes you feel. Yes. Feel those feelings. Spending a crisp $50 bill feels a bit different than swiping your debit card. And TWO crisp $50 bills? That hurts! Ok, it doesn’t literally hurt, but you get it.

But Don’t Forget About the Future
Experts like Scott Halliwell, Certified Financial Planner™, with USAA says, “You need to save money for your future.

And he’s not just referring to retirement. Most military families don’t think long term about financial readiness. A Thrift Savings Plan won’t cover everything.

Scott explains, “No matter your age, there is one thing nearly everyone can count on: Your income probably isn’t always going to cover 100% of your wants and needs all the time. As a result, you need to save money today so it’s available down the road.”

My husband and I took this tip very seriously. When we started our financial readiness journey, getting a solid ‘emergency fund’ in place was the top priority. Each pay period, when we had extra money, we put it into our savings account until we hit $1000. It’s grown exponentially since those first days.

We also have a mutual understanding that Emergency Fund money is for just that: emergencies.

Saving money, in any fashion, is one of the smartest things you can do for your military family, in my opinion. What if BAH goes down? How will you cover your off-post rent? If TRICARE requires military families to pay more out of pocket, how will you buy yourself a pair of glasses? With money saved for the future, little ‘emergencies’ seem to be just an inconvenience, instead.

We live in a world where happiness seems to be associated with “things.” Remember: life isn’t about keeping up with the Staff Sergeant next door, and with a savings plan in place, you won’t have to!

Do you have any financial success stories or tips? Share them with us!


shannonPosted by Shannon Sebastian, Online Engagement Manager