The theme for Military Saves Week 2013 is more than just a theme; it’s the essence of a sound approach to savings, designed to help individuals take financial action. Set a Goal. Make a Plan. Save Automatically. Knowing what you want to save for, how to achieve it, and then automating the savings process will allow you to reach your savings goal.
Set a Goal
You can save more by having a specific goal in mind. Visualizing what you want to save for gives your savings a purpose. You may be tempted to spend your savings if it has no purpose. But once you have a goal in place, you know that taking money out of your savings is taking away from that ultimate goal. So what are you saving for? An emergency fund, a home, retirement, a car? Go viral with your savings goal! Take a photo of your goal and post it on our Association’s Facebook page or tweet it using the hashtag #MSW2013.
Make a Plan
Once you have your goal in place, make a plan of how you are going to save. To start, cut down on your spending and reduce high-cost debt. Next, keep track of what you spend and make a budget. Once you know where your money is going each month, you can cut down on unneeded spending and save the difference.
Don’t forget to keep your savings safe, secure, and growing. Banks, credit unions, and even the government offer a variety of financial products that can help you save.
It can be hard to put aside money for savings. But there is an easy way to save money without ever missing it. Once you know how much you can save, make saving automatic. Use an allotment or automatically transfer a portion of your paycheck into a savings account.
We want to hear from you! Have you already set a goal? Made a plan or budget? Do you save automatically? Share what has worked for your family.
Posted by Christine Gallagher, Government Relations Deputy Director at the National Military Family Association
I remember when my husband and I made our first concerted effort to save. He had just left for his first deployment and I decided I wanted to sign up for the Savings Deposit Program (SDP). Fresh off a pre-deployment brief, I wanted to put my newly found knowledge to good use and take advantage of this great savings opportunity.
A military member can deposit funds into a SDP account once he or she has been deployed for 30 days. The military member must be receiving Hostile Fire Pay. A total of $10,000 may be deposited during each deployment and will earn 10% interest annually. This sounded like an attractive option for us.
Although my intentions were good, we didn’t get a chance to set up the account before my husband deployed. I went to our local finance office and learned I would need a special power of attorney to set up the SDP account on my husband’s behalf. (My general power of attorney wouldn’t work.)
I didn’t let this setback derail us from our long-term savings plans. Instead, I researched products available through military banks and credit unions and settled on a money market account. Every other week I would take my paper paycheck (yes, I worked for a small employer who did not use direct deposit) and deposit half of my paycheck into our new money market account. I calculated that about half of my paycheck was the additional funds we received while my husband was deployed, which included the family separation allowance, hostile fire pay, and tax benefit.
By the end of the deployment, we had a good savings foundation! The most valuable lesson we learned was about financial discipline and how to save money. We successfully accounted for savings in our budget. It was no longer an afterthought, but a regular habit.
During Military Saves Week I encourage you to take the saver’s pledge and put that pledge into action.
My husband and I are faithful savers today. I look forward to the messages I receive from the Military Saves campaign in order to help find new ways to save and to stay on track.
What helped your family start to save?
Posted by Katie Savant, Government Relations Information Manager at the National Military Family Association and blogger at www.MilitaryFamilyCents.com, where this post originally appeared
Military Saves Week (February 25 – March 2, 2013) is a chance for individuals to evaluate their saving status, take financial action to reach goals, and become part of a supportive environment of military savers. Everyone can take the Military Saves pledge, and if you’ve pledged in the past, you can renew your pledge and commitment to saving. Studies reveal that having a savings plan with specific goals can have beneficial financial effects, regardless of income level.
Here are 5 easy ways to get involved in Military Saves Week:
1. Take the Military Saves Pledge
Pledge or re-pledge today! Those with a savings plan are twice as likely to save for emergencies and retirement as those without a plan. Join over 310,000 people who have already committed to save.
2. Assess Your Savings
Find out if you are saving in all the right places with this 12 step savings assessment.
3. Test Your Savings Knowledge
Take this savings quiz to reveal how much you understand about the realities of saving in America.
4. Share Savings Tips and Advice with Family and Friends
On Twitter and Facebook? Share your pledge and your best savings and financial tips with your family and friends. On Twitter, use hashtag #MSW2013. Get everyone to become a saver!
5. Share Your Savings Goal
We want to hear from you! What are you saving for? Post or tweet a photo of you with your savings goal to Facebook or Twitter. Download the “I’m Saving For…” sign and share your photo and savings goal today!
Military Saves Week is coordinated by Military Saves and is part of the Department of Defense’s Financial Readiness Campaign. Started in 2007, Military Saves Week is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to evaluate their own saving status.
Posted by Christine Gallagher, Government Relations Deputy Director at the National Military Family Association
For many of us, tax season comes with a sinking feeling. The incomprehensible forms, piles of documents to sort through, and the unwelcome prospect of writing a large check to the IRS leaves us with a splitting headache.
However, tax season does not have to bring bad news. In fact, some military families may find that they are eligible for an income tax credit that will allow them to keep more of the money they have earned, thanks to the Earned Income Tax Credit.
The Earned Income Tax Credit (EITC) is a refundable tax credit for low to moderate income families. To qualify, your taxable income must fall below a certain threshold. For 2012, a married couple with two children may qualify for the EITC if their earned income and their adjusted gross income are below $47,162. Remember that allowances, such as Basic Allowance for Housing (BAH) are tax-exempt. Combat pay is normally not taxable but you can elect to have it included in your Earned Income if doing so increases the amount of your credit.
Intimidated? Don’t be. There are plenty of resources to help military families tackle tax season. The most important thing to remember is that in order to qualify for the EITC you must file a tax return, even if you do not owe any tax or are not required to file. For more information about the EITC, check out the IRS online guide for families and individuals.
Do you think you might qualify for the EITC? What other tax tips do military families need to know?
Posted by Eileen Huck, Government Relations Deputy Director at the National Military Family Association
The same story is told throughout military communities and within military support systems—military spouses are hard pressed to find employment. PCS moves are frequent and jobs come and go. Luckily there is a way to help combat the unemployment woes. Education.
Not only will a higher education increase the chances of employment for military spouses, it will contribute to your family’s financial well-being. A study from CollegeBoard.org reports, “the typical bachelor’s degree recipient can expect to earn about 66% more during a 40-year working life than the typical high school graduate earns over the same period. Higher earnings are one of the important outcomes of higher education. Average earnings for adults increase with years of education and particularly with degree completion.” Higher education degrees are now more accessible to military spouses thanks to distance learning programs.
The education community has shifted in favor of military spouses. Many private and public universities offer reputable degree programs online, an attractive option for mobile military spouses. Distance learning can also be more flexible when it comes to your military family calendar. Find additional information on pursuing a degree in higher education in our website section on spouse education.
One necessary price I know of that comes with education is the cost of tuition. To alleviate the inevitable costs of higher education, military spouses have options. Visit your installation’s Family Center, Education Center, and the financial aid office at the school you wish to attend for more information on financial assistance. Various military associations, including the National Military Family Association and some military spouse clubs, offer scholarships for military spouses. If eligible, you can use a portion of your service member’s GI Bill or apply for government funding through MyCAA.
The National Military Family Association is made up of many military spouses like me, so we know firsthand the importance of military spouse education and the difficulties that come with achieving higher education due to moves and expenses. If you’ve been following us on our website or social media, you know our Joanne Holbrook Patton Military Spouse Scholarships are awarded to spouses of all Uniformed Services members and applications are live online now. The application deadline is TOMORROW, January 31st – there is still time to apply here!
I truly believe an education outweighs the cost that comes with more schooling. As a military spouse, my education has broadened my career options and allowed me pursue opportunities that would not be available if I did not have a degree.
Are you starting or continuing your education? What challenges have you faced in doing so and what resources have worked for you?
Posted by Allie Jones, Military Spouse Scholarship Program Manager at the National Military Family Association
Does anyone else feel the tax “season” is longer than a traditional holiday season? The commercials for tax prep start before the New Year’s Eve ball drops and continue through the Cadbury egg commercials. Then suddenly it’s April 15.
Try to avoid the last minute stress of filing your taxes by being prepared. It may be helpful to review information specific to military families and your tax situation. The IRS Tax Information for Members of the U.S. Armed Forces contains online videos and short articles which highlight military specific issues such as combat pay, filing deadline extensions for deployed service members, and tax laws that provide special benefits to service members.
Free tax filing services are available through Military OneSource. The program provides free access to a customized version of the basic H&R Block at Home® online tax filing product. This customized product allows for free federal filing and up to three state returns. Military OneSource also provides tax counselors via telephone at 1.800.342.9647. The counselors cannot prepare tax forms, but can help you make an informed decision about your tax situation.
TurboTax also recently released a Military Edition that, until February 14, is free for junior enlisted military personnel (ranks E1 to E5).
Military installations offer Volunteer Income Tax Assistance (VITA) consultants to assist with free tax advice, tax preparation, return filing, and much more. Locate the closest VITA site using the Armed Forces Legal Assistance Services Locator.
We’ll highlight additional tax-related resources in the upcoming weeks. What tax filing tips would you share with other military families?
Posted by Katie Savant, Government Relations Information Manager at the National Military Family Association