Financial Planning Tips Before You Deploy

By Corina Notyce, DCoE Strategic Communications

Before you deploy, you’ll want to set time aside to coordinate your financial obligations and plan your financial readiness. It may seem overwhelming, but the Real Warriors Campaign’s latest article, “Preparing Your Finances Before Deployment,” provides practical money management tips to help you organize your funds before you leave and maintain financial readiness while you’re away. Tips include:

■Choose a financial observer. To help you manage your finances while deployed, choose someone like your spouse, parent or other responsible person whom you trust, to oversee your finances.

■Establish a power of attorney and draft a will.

While you’re deployed, it may be necessary for someone to make decisions on your behalf. A power of attorney will allow you to legally grant a selected individual to act on your behalf. Also, draft or update your will to ensure your property is handled as you intend in case of death. For assistance preparing your power of attorney or will, contact the legal office on base or use the U.S. Armed Forces Legal Assistance locator to find legal help near you.

■Update your record of emergency data and life insurance. Your safety during deployment is important, but it’s also essential to make arrangements for your property and benefits to be transferred in case of serious injury or death. Before you deploy, review your Record of Emergency Data to make sure it’s current. This is used to contact next-of-kin, designate a beneficiary to receive certain military benefits and identify an individual to coordinate funeral arrangements. Also, update your Servicemembers Group Life Insurance form, which identifies the legal beneficiary for your payment in case of death.

■Understand your entitlements. You may be eligible for extra pay through deployment entitlements, so check with your unit administrative section or visit Military OneSource to learn more.

■Establish a budget. Although you may have extra income during a deployment, you and your family should try to live on your pre-deployment income by keeping a spending budget. For help developing a budget, complete a Military OneSource Financial Management Plan. Or visit MyMoney.gov for other budgeting tools such as a daily spending diary, monthly payment calendar and a spending plan worksheet.

■Pay your bills on time. While you’re deployed, you’re still accountable for financial obligations at home. To stay on track and avoid late payments, set up automatic bill payments prior to deployment. Your bank, credit union or other financial institution can help you.

■Create a savings plan. Deployments are an ideal time to start saving by getting in the habit of setting money aside to prepare for unexpected financial challenges. See if you’re eligible to take advantage of savings programs like the Defense Department Savings Deposit Program and Thrift Savings Plan.

■Communicate. Communication with your spouse or financial overseer while you’re deployed is critical to staying informed of your financial readiness. Establish a communication plan before you deploy so you can discuss how bill payments, major purchases and other financial decisions will be handled.

■Know your rights. The Servicemembers Civil Relief Act offers a wide variety of protection and financial relief for active-duty service members, including activated members of the National Guard and reserve, during deployment. Contact your nearest Armed Forces Legal Assistance Program using the military legal assistance office locator to see if the act applies to you.

Thrift Savings Plan to Offer New Roth Option

By Karen Parrish

American Forces Press Service

WASHINGTON, April 13, 2012 – Service members and Defense Department civilian employees who are eligible for the Thrift Savings Plan will soon have a new Roth option for retirement savings under the program, defense finance officials announced today.

The change will allow participants to contribute after-tax dollars to the federal government-sponsored retirement savings and investment plan, according to a Defense Finance and Accounting Service statement released today.

As with traditional and Roth individual retirement accounts, the TSP’s two options will now allow plan participants to invest either before- or after-tax dollars, although limits on annual contributions, catch-up contributions and agency matching funds will remain the same, officials said.

The plan, which is similar to a 401(k), is open to federal civilian employees and military members. For 2012, the maximum contribution is set at $17,000. Catch-up contributions, available to participants 50 or older, are capped at $5,500 over the standard limit.

Only civilian employees are eligible for agency matching contributions.  All eligible civilian employees receive one percent in agency matching funds. Eligible plan participants receive a dollar-for-dollar agency matching contribution for the first three percent of pay they contribute, and 50 cents on the dollar for contributions of between three and five percent. Contributions above 5 percent of pay are not matched.

The current plan treats all contributions as pre-tax dollars – participants do not pay taxes on pay they put into the plan, but will pay deferred taxes when they receive those funds in retirement.

The new Roth option will allow contributions that are taxed in the year they are made, but will be tax-free in retirement, TSP officials said.

Greg T. Long, TSP executive director, urged in a letter to participants that they carefully consider whether Roth TSP would be to their advantage.

“As with all tax matters, you should seek the advice of a qualified tax or financial advisor for information pertaining to your specific tax situation,” Long wrote.

He added the plan’s website will soon offer a Roth calculator, and other website content including forms and publications will be updated in May to include information about the Roth feature. 

Defense finance officials said the Roth option will be available on a phased basis by military service from June to October. Officials said the schedule will allow service finance employees to complete and thoroughly test the complex changes needed to the various payroll systems.  

Defense finance officials said more specific deployment dates on Roth TSP elections will soon be available on www.dfas.mil.

Officials said service members and their families may contact Military OneSource at 800-342-9647 to schedule an appointment with a financial consultant.

Build Wealth, Not Debt

By Chief Mass Communication Specialist (SW/SCW) Terrina Weatherspoon, MCPON Public Affairs

WASHINGTON (NNS) -- "Set a Goal, make a plan, save automatically" is the theme of the 2012 Military Saves Week, which began Feb. 19, as part of the larger nationwide America Saves Campaign, conducted in cooperation with the Consumer Federation of America.

Although the Military Saves Campaign is a yearlong effort, Military Saves Week brings in community and financial resources to help service members focus on financial readiness.

"It's important for everyone to manage their resources," said Master Chief Petty Officer of the Navy Rick D. West. "You really have to take care of your needs and balance your wants. As we all know, life is unpredictable. You need to be prepared. Every Sailor should be looking to a future financial plan. If you have not sat down with a financial counselor, you could be impeding your future security."

Start small, think big is the idea behind Military Saves Week. Personal finance managers (PFM) at each military installation are the key planners and organizers of all base Military Saves Week programs and activities.

"I encourage everyone to engage in the activities going on at their commands," said West. "Your personal health and well-being start by reducing stress. And financial stress is hard to manage if you become too far in debt. I challenge you to take a month and cut out the stops for coffee, make your lunch, don't visit the vending machines, and see how much you save."

Over the past five years, more than 100,000 military members and their families have taken the pledge to save money, reduce debt and build wealth over time. In addition, many military banks and defense credit unions promote Military Saves Week and offer financial seminars and special savings programs.

Visit www.militarysaves.org and take the "Saver Pledge." Build wealth, not debt.

Financial Responsibility: Pro-active or Reactive

By Mass Communication Specialist 1st Class (AW) LaTunya Howard, Navy Personnel Command Public Affairs

MILLINGTON, Tenn. (NNS) -- The beginning of a new year is an excellent time for Sailors to review their financial plan, said a Navy financial specialist, Jan. 6.

"Far too many Sailors react to their spending rather than being proactive by planning ahead," said Chief Yeoman Shahana Ledee, Navy Personnel Command (NPC) command financial specialist. "A financial review should be at the top of the new year's resolutions."

Ledee said financial planning is key to good fiscal health. Sailors should consider using a budget worksheet to account for all income and expenses for their household. Investments, retirement savings, entertainment, travel and unexpected incidents are items often excluded from family planning.

"Debt elimination can be accomplished faster with written short and long-term goals," said Ledee. "Hold yourself accountable by tracking your spending. You'll minimize impulse buying and possibly have more to save or invest.

When considering a major purchase, Ledee reminds Sailors to consider all expenses associated.

"Purchasing a vehicle involves more than making its payment," said Ledee. Sailors must factor in maintenance, repairs, insurance and any additional cost associated with driving the vehicle. If you're interested in buying a home, be realistic about what you can afford, as it also involves more than making a payment. Consider the cost of utilities, property taxes, homeowner fees, insurance and any additional costs that will be required each month.

"Sailors should also keep in mind that poor fiscal health can cost more than money, it can cost their career," said Ledee. "Many individuals who lose their security clearance do so due to poor fiscal health. There are numerous free resources available to help us reduce that statistic."

Military OneSource at www.militaryonesource.mil provides free financial assistance for service members and their families. The "Money Management" section of the website features financial information and resources that can help service members with estate planning, credit and collections, budgeting, saving and investing and taxes.

Military OneSource web site also offers free federal and state tax preparation and filing assistance.

For more information on financial planning, budgeting or investing contact the command financial specialist, or call NPC customer service center at 1-866-U-ASK-NPC or email CSCMailbox@navy.mil.

Family Matters Blog: ‘Budget Fatigue’ Can Lead to Holiday Debt

By Elaine Sanchez
American Forces Press Service

WASHINGTON  – Last night I hopped on the Internet with the intention of buying a few gifts. Money, as always, is tight, so I figured I could go bargain hunting without wasting time or gas.

As colorful, enticing images of gift possibilities danced across the screen, I swiftly shot from site to site, half a dozen windows open at a time, comparing prices and swooping in to buy more and more.

I felt exhilarated. I was spending guilt-free for the first time in years. I was clicking buttons rather than forking out cash, and that’s OK, right?

My bank account told another story when I accessed it later that night.

Today I learned I had fallen victim to a phenomenon known in some financial circles as “budget fatigue.”

It’s easy to get frustrated and tired of tight purse strings, particularly after years of economical setbacks, and decide to let loose over the holidays. But today’s spending excess is tomorrow’s debt hangover.

In a recent article, Dan Radovsky of USAA offers some tips to combat this trend:

-- Know your budget. Be realistic about what you have to spend, make a gift-giving list and stick to it, whether shopping in a store or online. If you’ve been on a strict budget all year, don’t veer off course now.

-- Paper or plastic? The payment method you use can have a big impact on the final cost of the gift. If you decide to charge now and pay later, high interest rates and late fees can take an expensive toll. You may end up spending a lot more than you intended. Plus, what’s the point of bargain hunting if you end up with fees tacked on? An expert suggests people who want to use plastic stick to a debit card, but even then be wary of piling up teller machine fees.

-- Try layaway. Layaway plans encourage early shopping and enable people to spread out the financial burden over a period of time rather than have it hit all at once. These plans may involve a small fee, but that won’t come close to a credit card’s interest rates and late fees.

Bottom line, Radovsky said, is to avoid letting budget fatigue nudge common sense aside. Have fun, but within limits.

Now that I’m a smarter shopper, I’m off to reduce the damage of my Internet shopping spree so I can get back on my budget track.

Service members and their families can learn more about smart spending on Military OneSource or through the Consumer Financial Protection Bureau’s Office of Servicemember Affairs, a government office dedicated to protecting service members and their families from financial predators and pitfalls.

If you have some tried-and-true holiday smart spending tips, don’t hesitate to share.

For more posts like this one, visit AFPS' Family Matters Blog.

'EagleCash' Helps OIF-Deployed Troops Manage Money

By Gerry J. Gilmore
American Forces Press Service

July 24, 2007 - Thousands of servicemembers deployed overseas in support of Operation Iraqi Freedom have found it easy and convenient to use "EagleCash" cards when making financial transactions, officials said. Also known as stored-value cards, EagleCash cards are issued at no charge to servicemembers before deployment for use at overseas military exchange stores, postal facilities and vendor concessions, officials said. The cards are electronically-linked to users' stateside banking accounts.

"The EagleCash card is better than cash," Army Col. Stephen J. Riviere, commander of the 13th Finance Group, said in a recent news release. The Army is encouraging Middle East-deployed soldiers to use EagleCash, since use of the card precludes their not having to wait in long lines to cash their paper paychecks.

EagleCash recently celebrated its one-year anniversary in the Operation Iraqi Freedom theater-of-operations. More than 300,000 EagleCash transactions have been made in the past 12 months.

EagleCash is a cooperative effort between the U.S. Army's Finance Command and the U.S. Department of the Treasury's financial management service. Officials said use of the cards reduces the amount of U.S. currency in circulation overseas and also cuts the number of military financial specialists deployed in theater. This frees up servicemembers for other duties.

Card users can access specially-equipped kiosks to check their balances, transfer funds or access cash.

There are now more than 100 EagleCash kiosks and 1,200 sales transaction points across Multinational Corps Iraq's area-of-operations, Army Lt. Gen. Raymond T. Odierno stated in a recent announcement to MNC-I troops.

Odierno requested that servicemembers, government civilians and contractors assigned to his command who use Army finance office services obtain EagleCash cards by August 1.

Thanks to EagleCash, "the military finance office is no longer the only location where individuals can access their funds to meet their financial needs," Odierno said.

"I ask leaders at every level to ensure our servicemembers and civilians are properly educated on all the benefits and capabilities of the EagleCash SVC program," he said.

Servicemembers Benefit from Financial Management Programs, Official Says

By Gerry J. Gilmore
American Forces Press Service

July 20, 2007 - The Defense Department is committed to helping servicemembers and their families become good personal finance managers, a senior official said yesterday in Hawaii. Most young people leave high school without any financial management education, David S.C. Chu, undersecretary of defense for personnel and readiness, said at a National Association of Federal Credit Unions' meeting in Honolulu.

"As a result, our people tend to possess little experience in making the financial decisions that will impact their financial well-being and their financial future," Chu pointed out, noting that about 46 percent of military members are age 25 or younger.
As part of President Bush's February 2001 call to improve military quality of life, he said, the department developed a social compact designed to focus its commitment in caring for servicemember and family needs.

"This social compact includes personal finances as an integral part of the quality of life in the military, and seeks to support the families' needs by providing financial awareness, education, skill-building and counseling programs," he said.

Having good money management skills is especially important for young military families, he said, noting that 38 percent of servicemembers age 25 or younger are married. About 21 percent of these couples have children.

"We equate financial readiness with mission readiness," Chu said, pointing to the findings of a 2005 servicemember survey that rated finances to be more stress inducing than deployments, health concerns, life events and personal relationships. Only work and career concerns, he said, were rated as higher stressors in the survey.

The department established a financial readiness campaign in May 2003.

"Our simple goal is to establish a financial culture that instills and promotes good credit, regular savings, including savings for emergencies, retirement savings and participation in the Servicemembers Group Life Insurance program," Chu said.

The department promotes good money management practices through ongoing education programs delivered by the service branches to military members and their families, he said. Each year the defense department provides more than 12,000 financial education classes to more than 340,000 servicemembers and their spouses.

To enhance its financial awareness efforts, the department has partnered with more than 25 federal agencies and non-profit organizations, Chu said. For example, by working with the American Savings Education Council, he said, the department maintains a flow of public service announcements that extol the benefits of saving for the future through its American Forces Radio and Television Service.

The department also sponsors a series of worldwide financial-management seminars for servicemembers and their families as part of the "Moneywise in the Military" campaign, he said.

Last year the department kicked off its "Military Saves" campaign that urges servicemembers and families "to build wealth and not debt," Chu said.

More than 80,000 military families took some type of positive action regarding their personal finances as the result of the first "Military Saves" campaign week that was held February 25 to March 4 last year, he said.

The next Military Saves week will be held February 24 to March 2, 2008.

"We look forward to increasing the numbers of military savers through our continued cooperation with our financial readiness partners, including our defense credit unions," Chu said.

Program Encourages Troops to Save Money, Reduce Debt

By Gerry J. Gilmore
American Forces Press Service

Feb. 15, 2007 – A new Defense Department program encourages servicemembers to become better money managers by paying off or avoiding credit card debt and starting savings accounts, a senior official said here today. "Military Saves" is an ongoing, DoD-wide program that also sponsors money management seminars titled, "Moneywise in the Military," held at military installations across the country, Leslye A. Arsht, deputy undersecretary of defense for military community and family policy, said today during an interview with the Pentagon Channel and American Forces Press Service.

"We want financial planning and financial strategies to become a part of everyday life" for servicemembers and their families, Arsht said.

Each seminar features the insights of money management expert Kelvin Boston, host of the PBS television series, "Moneywise," as well as other sessions that discuss the proper use of credit, savings and investment strategies, home ownership and other topics.

The first "Moneywise in the Military" seminar, held in September at Walter Reed Army Medical Center here, attracted more than 200 servicemembers and military spouses, Arsht said.

Participants "listened to experts give them tips and strategies to use to start this kind of (financial) planning that would put them on this positive path to managing their money in a proactive way," Arsht said. "Many servicemembers went away saying they learned a lot of things they didn't know."

The second "Moneywise in the Military" seminar was held Jan. 31 on Fort Dix, N.J., and it drew more than 400 servicemembers and military spouses. The Navy will kick off its "Military Saves Week" activities by holding a "Moneywise in the Military" event in San Diego on Feb. 24.

The Defense Department's "Military Saves" program also offers a Web site, www.militarysaves.org, where servicemembers can access financial management information and register for a money management plan, Arsht said.

When servicemembers are distracted by financial problems, it negatively affects military readiness, Arsht pointed out. The state of a servicemember's personal finances also affects security clearances, she added.

However, servicemembers with money problems shouldn't feel embarrassed or afraid to step forward to obtain help that's free and readily available through military channels, Arsht said.

"All the command wants is for everyone who is in the service to be successful, and having debt and worry keeps you from that," Arsht said. "Everyone along the command chain recognizes that this is a problem. (But) people make mistakes and make bad choices.

"You can work to fix it. And then, once you work to fix it, you can put yourself on a path to financial success that will keep you from doing that again," Arsht said.

The "Military Saves" program officially kicks off during "Military Saves Week," Feb. 25 through March 4, Arsht said. "Military Saves" is part of a national initiative called "America Saves," she said, that urges Americans to become better stewards of their personal finances.

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