Special Programs Help Servicemembers Save, Manage Money

By Gerry J. Gilmore
American Forces Press Service

Jan. 30, 2008 - The Defense Department wants servicemembers and their families to be aware of in-house programs that can help them to better manage their money and stay out of debt. For example, the 2-year-old Military Saves program is designed to teach servicemembers and families how to save and invest their hard-earned dollars and stay out of debt, Army Maj. John Johnson, director of the Defense Department's Armed Forces Tax Council, said today during an interview with Pentagon Channel and American Forces Press Service reporters.

"The whole idea behind it is to encourage people to save," Johnson said, noting this year's Military Saves Week is Feb. 24 through March 2. Military Saves is part of the nationwide America Saves program, he noted.

During Military Saves Week, installations across the country will offer money-management seminars and distribute information to encourage people to save money, Johnson explained.

On a related subject, Johnson noted that servicemembers this year can opt for a split disbursement of their tax refunds, with one portion going into a checking account and another into a savings account.

The military's Thrift Savings Plan program, he said, is another method servicemembers can employ to fatten their savings accounts.

TSP "is really an underutilized benefit," Johnson said. Non-deployed servicemembers can earmark up to $15,500 annually for tax-deferred TSP accounts, he explained, while servicemembers deployed in combat zones can contribute up to $46,000 into their TSP account.

"Everyone should be saving money, anyway. TSP is another option," Johnson said. Starting a TSP account, he said, also provides a lower-cost method of investing, compared to investing in a traditional mutual fund.

In an Army pilot program for enlistees in critical military specialties, the government will match TSP contributions dollar for dollar, up to 3 percent, Johnson reported. The pilot program, he added, also will match 50 cents of each dollar for up to 2 percent of additional TSP contributions.

Enlistees who qualify for this special TSP program should do it, Johnson said. "Otherwise, you're just throwing money away," he added.

The department's financial-management programs assist servicemembers so that they don't have to worry about money issues when they deploy, the major said.

"It's all about readiness," Johnson said.