Tag Archives: money

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

Set a Goal. Make a Plan. Save Automatically.

military-saves-weekMilitary Saves Week starts February 24 and runs through March 1. In the weeks leading up to and including Military Saves Week, many installations host programs and events that focus on saving. I’d like to take this opportunity to encourage you to attend one of these events. Why? I know many join the military because it provides a steady dependable paycheck, and if a service member stays in for more than 20 years, the retirement pension is guaranteed at a set and predictable rate. However, recent events (cuts to the COLA, a 1% pay raise for 2014, and proposed changes to the commissaries) show how uncertain those guarantees are. We are all one congressional vote away from any change to the benefits packages that were offered when our service member signed up.

It’s simple, really. Like the old saying goes, “The only guarantees in life are death and taxes.” I’ve said before that as military families, we prepare for the worst and hope for the best. This is just as applicable in your financial life as it is anywhere else. So, if you get that retirement pension for military service, great! This does not negate your responsibility to save for your retirement. Make sure you are using the Thrift Savings Plan (TSP), use the Savings Deposit Program (SDP) during deployments, and open up a Roth IRA (yes, I said “and,” it’s called diversification). There are a million ways to save your money to ease your long-term financial worries and burdens, and that means a more peaceful and enjoyable retirement. Don’t we all want that, especially after living a military life?

On that note, I will point out that not everyone who joins the service will stay in for 20 years or more. In fact, only 17% who serve end up making it to retirement. So, savings should start as early as possible and as often as possible. Another old saying tells you to pay yourself first. Find 10% of your income to pay (to yourself) in a retirement account. The earlier you start, the more money you will have at retirement because those first dollars grow the most.

One more big point I want to make is for you spouses, yeah, you, the one who is keeping the checkbook balanced, holding down the homefront, or running around like a chicken without a head, savings is also for you! There is no reason why all of the retirement and savings needs to be in the service member’s name or in connection with their employer; get some savings in your name, too. I am not implying that your marriage is on the rocks. I am reminding you that life happens, and facilitating your ability to take command of the ship if you need to, is part of having a secure family. You deserve to have assets, savings, and a nice credit score, too. These are all important factors for long-term financial success, regardless of whether you are inseparable for life.

Military Saves has a great motto this year, “Set a Goal. Make a Plan. Save Automatically.” Their website has tools and resources for you to learn how to save smart and make the most of your financial power. Take some time this month to learn more about how you can build your family’s wealth!

Have you considered savings as a spouse? Share your thoughts!

Brooke-GoldbergPosted by Brooke Goldberg, Government Relations Deputy Director

Military Student Loan Forgiveness: What to do with your student loans?

Soldier-StudentMilitary families may rely on a variety of financial aid packages to help afford a higher education; including scholarships, grants, and loans. If your service member has federal loans, he or she will want explore the Public Service Loan Forgiveness (PSLF) program.

The PSLF is a program for federal student loan borrowers who work in a range of public service jobs, including military service. The program forgives remaining debt after 10 years of eligible employment and qualifying loan payments.  In most cases eligibility is based on whether you work for an eligible employer. Your job is eligible if you:

• are employed by any nonprofit, tax-exempt 501(c)(3)organization
• are employed by the federal government, a state government, local government, or tribal government (this includes the military and public schools and colleges); or
• serve in a full-time AmeriCorps or Peace Corps position.

PSLF applies to federal Stafford, Grad Plus, or consolidation loans as long as they are in the Direct Loan Program.  Borrowers with Federal Family Education Loan Program (FFELP) loans must switch to the Direct Loan program to participate in this benefit.

In order to qualify for loan forgiveness the borrower must make 10 years (or 120 monthly payments) after October 1, 2007. Qualifying payments are made through the Direct Loan program. To count, the payments must be made while working full-time in an eligible job. “Full-time” means 30 hours per week or the standard for full-time used by the employer, whichever is greater. If your service member meets all of the eligibility criteria the earliest the remaining debt could be forgiven under the program is October 2017.

With advanced planning, the PSLF is another tool your family can use to help make higher education affordable. Since federal student loan interest rates reset each July , now is a good time to explore the PSLF program to see if it is right for you and your family.

KatieBy Katie Savant, Government Relations Information Manager

Hmm, what to do with your tax refund? 6 tips for military families

Hmm, what to do with your tax refund? 6 tips for military familiesWill your family receive a tax refund this year? The average tax refund is around $2,800 and slightly more for direct deposit refunds. Even if your refund is more or less than the average, we have a few tips to make your money work for you.

Military families encounter fluctuations in household income for a variety of reasons including: deployment and training incentives; bonuses; loss of income from a spouse’s job; or cost of living adjustments after a military move. A tax refund may provide the funds you need to help account for the changes in household income. Here are some tips to consider:

  • Review your emergency savings funds. Do you have money set aside for unexpected expenses? Out of pocket costs for an upcoming Permanent Change of Station (PCS)? Consider starting or adding money to a designated emergency savings account.
  • Pay down debt. Use your refund to pay down or pay off a high interest credit card.
  • Contribute to your retirement plan. An extra contribution to your service member’s Thrift Savings Plan (TSP) or your own retirement account can go a long way.
  • Deployment savings. If your service member is deployed, consider adding your refund to the Savings Deposit Program. A total of $10,000 may be deposited each deployment and will earn 10% interest annually.
  • Save for college. If you have children, you can contribute to a college 529 savings plan. Going back to school as an adult? You can put your refund towards a 529 plan for yourself, too.
  • Don’t spend your refund before your receive it. Wait for your refund to arrive before you spend the funds. You can track the status of your federal refund online.

Before you are tempted to spend the extra money on a shopping spree, review your current financial situation. It may be helpful to talk to a financial counselor at your local military installation or through Military OneSource to help you decide how to put your refund to good use.

How will you use your tax refund? 

katiePosted by Katie Savant, Government Relations Information Manager at the National Military Family Association

Tips for using the Post-9/11 GI Bill: get ready for some paperwork!

Tips for using the Post-9/11 GI BillOne of the key factors to pursing your educational goals is to decide how you will pay for your education. Military spouses have several opportunities to help offset the cost of school, including private scholarship programs, federal loans and grants, MyCAA, and transferability of the Post-9/11 GI bill.

When I decided to pursue a graduate degree, my active duty service member decided to transfer a portion of his Post-9/11 GI bill to me. As of August 1, 2009, service members who have served in the Armed Forces for six years and agree to serve an additional four years, are eligible to transfer their benefit to a spouse. My spouse was eligible to receive 100% of this benefit. In my situation, the benefit pays full tuition and fees directly to the public in-state school I attend. I also receive a yearly book stipend of up to $1,000, prorated based on the number of credits I take. I am not eligible to receive a monthly housing allowance because I’m using the benefit while my husband is on active duty and he currently receives a housing allowance for our family. (Private school tuition and fees are capped at a national maximum rate. For the 2012 – 2013 academic year the private school cap is $18,077.50.) But these are my circumstances – how can you make the Post-9/11 GI Bill work for you?

Transferring the Post-9/11 GI bill takes time. Be prepared to work with your spouse to complete quite a bit of paperwork. While your spouse is on active duty, he or she may apply to transfer their benefit to a spouse, child, or children. Your spouse must submit a Transfer Educational Benefit request for Service approval. This may take several weeks to process. Once approved, the family member using the transferred benefit must apply to the Department of Veterans Affairs (VA)  by using form 22-1990e found on the Veterans On-Line Application (VONAPP) website. The VONAPP website is a bit clunky to use. After you create a username and password, you’ll need several important pieces of information to complete this form including: your educational history, name, address, degree program for the school you’ve selected, and bank account information (for direct deposit for the book stipend and/or living allowance).

I waited (patiently) for about five weeks before I received a “certificate of eligibility.” At the same time my husband received a letter notifying him that the VA had received the Transfer of Entitlement (TOE) application and that by applying for TOE he revoked his eligibility for other GI bill programs, such as the Montgomery GI Bill.

I then submitted a copy of my certificate of eligibility to my school’s VA-certifying official. Next, I registered for classes and then the VA-certifying official certified my enrollment with the VA. Certifying enrollment was about a four week process. Your school will only receive funds after your enrollment (which really means registration) has been certified. You may have fees added to your account if you do not pay your tuition by the tuition due date. My school was familiar with the VA’s process and waived all extra fees on my account.

I did drop one class during the add-drop period. Even though I was within my school’s add-drop period, the VA had already sent my tuition to the school based on the classes I was registered to take. About six weeks after my semester started I received a letter from the VA stating they had overpaid my benefits and I was now responsible for the debt. I sent this letter to my school’s VA-certifying official and my school will send the funds back to the VA. If there is an over-payment  you are responsible to repay this debt to the VA.

My tips for effective use of the Post-9/11 GI bill are:

  • Apply for the benefit early – it takes several weeks to process.
  • Bookmark the www.gibill.va.gov website. Contact information and the FAQ section are especially helpful.
  • Get to know your school’s VA-certifying official (your school may have a designated VA office).

The ability to transfer the Post-9/11 GI bill has afforded me the opportunity to attend school. I plan to be a good steward of this benefit and am looking forward (in the distant future) to completing my Master’s degree!

Are you using the Post-9/11 GI bill? What advice would you give to military families on how best to use this benefit?

Keep in mind that rules are not the same when transferring a benefit to a spouse vs. to a child. Please see www.gibill.va.gov for official information and details specific to your situation.

katiePosted by Katie Savant, Government Relations Information Manager at the National Military Family Association and USC Sol Price MPA candidate

It’s not too late to figure out what you want to be when you grow up

It's not too late to figure out what you want to be when you grow upAs a kid we knew what we wanted to be when we grew up. Well, we had to have an answer – we were asked the question all the time.  Although, in my case, I didn’t know. Not until I was about 30 years old.

I married my husband in college and was thrust into military life right after we graduated. I only worked for about 18 months at the beginning of his career. Then we relocated overseas and within three years I had two beautiful children. This was my life. Mom, wife, military spouse.

When my husband started training and gearing up for long deployments, I knew I needed to get involved. So I started volunteering. Within two years I knew I wanted to support other military families. There was a need, and I loved it so much. It was a perfect fit.

When the FINRA Military Spouse Fellowship applications opened through the National Military Family Association in 2010, I applied. Having an undergraduate degree in psychology, I thought the idea of financial counseling sounded very interesting.  After finishing the program in about 11 months, I realized that not only did I have a passion for supporting military families, but I loved financial counseling. So, here it was—the career I always wanted with the passion I already had.

With our relocation to the National Capital Region, I found a position with the Consumer Federation of America as the Military Saves Coordinator. Now, I am in charge of a program that affects military families on a broad scale. I am able to use my knowledge as a financial counselor, military spouse, and all those years as a volunteer to support military families’ financial well being.

The FINRA Military Spouse Fellowship was instrumental in helping me develop a successful career path. Opportunities like this for military spouses are priceless. I am so thankful for organizations like FINRA Foundation, National Military Family Association, the Association for Financial Counseling and Planning Education, and the Department of Defense that tirelessly work to provide these opportunities.

As we move to our next location, the skills and experience provided by the Fellowship give me confidence to pursue a mobile career—a welcome advantage in meeting that challenging feat.

The 2013 FINRA Investor Education Foundation’s Military Spouse Fellowship Program is now accepting applications. Learn more about this opportunity and apply today!

Posted by Andia Dinesen, AFC ®, Military Saves Coordinator, FINRA Military Spouse Fellowship Recipient, military spouse, and mother of two