By Vince Little, The BayonetFebruary 16, 2011
FORT BENNING, Ga. - The 2011 Military Saves Campaign kicks off Sunday with Military Saves Week.
Ann Pratcher, Army Community Service's financial readiness program manager, said no special activities are planned at Fort Benning but urged Soldiers and family members to take advantage of the organization's regular classes on money matters. They include:
Aca,!Ac A Financial Counseling Intake and Refresher Checking Account Maintenance Workshop at 8:15 a.m. every Monday in the ACS Building at Patch Hall, Building 7, 7117 Baltzell Ave.
Aca,!Ac Pre-Move Financial Planning will be available to those preparing for a permanent-change-of-station move on Feb. 24 in conjunction with the PCS Brief. Reservations should be made with the Relocation Readiness Program at 706-545-7517 or 706-545-4043.
Aca,!Ac ACS presents a financial planning class Feb. 26 to CYSS HIRED! Program participants.
All attendees can become a "Military Saver" by setting a financial goal and writing it down, Pratcher said.
She said it's vital for Soldiers and families - thrust into a constantly changing environment - to save money and commit themselves to fiscal discipline and a common-sense plan.
"Soldiers and their family members face unique financial challenges and have unique opportunities," she said. "They relocate more often and at greater distances than the civilian population when the Army tells them to do so, not at their own discretion. There are always 'un-reimbursed' expenses, and one has to be prepared to make the move before reimbursement - you need to save for those expenses."
Enlisted personnel and junior noncommissioned officers are more likely to fall into financial trouble, according to a recent study by the FINRA Investor Education Foundation, a partner in the Department of Defense Financial Readiness Campaign. The Military Financial Capability Survey found that:
Aca,!Ac 32 percent used at least one method of non-bank borrowing in the past five years, including taking out an auto title or payday loan, getting an advance on tax refunds, and using pawn shops or rent-to-own stores, compared to 21 percent of the general military population.
Aca,!Ac 53 percent pay only the minimum monthly payment on a credit card in some months - increasing the likelihood of carrying a balance and shelling out interest charges - compared to 40 percent of the general military population.
Pratcher said changes in circumstances can cause variations in pay, so Soldiers and family members need savings to get through those times.
Service members who are dependent on a spouse's income or part-time employment are at great risk for financial hardship or problems, especially during a PCS, she said. It's best to use those added earnings for savings and special purchases, not long-term debt commitments.
"Deployment, with careful use of the additional income, provides an opportunity to increase emergency funds, retirement savings and savings for special purchases without going into debt," she said.
Pratcher said the Army is one of the few employers with a "defined-benefit retirement plan." Soldiers who stay in 20 years typically get 50 percent of average basic pay, based on their final three earning years. It offers the chance to forge another career at a relatively young age, she said.
"Having said that, 50 percent of base pay equates to approximately one-third of your pre-retirement standard of living, so having a post-Army job and transitional savings should be a high priority," she said. "I believe Soldiers have a unique opportunity, especially in today's economy, to do well, but it takes planning and learning to tell yourself 'Later' and 'No.'"
For more information about ACS financial classes and becoming a "Military Saver," call 706-545-7517.
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Tips for saving money
Aca,!Ac Establish a spending plan and track what you spend so you know if your money is going where you want it to go.
Aca,!Ac Put a "savings" category in your spending plan, even if it's only $5 or $10 a month. You can put it in a coffee can or other container until you have enough to put it in your bank or credit union without having to pay a monthly fee. Some banks and credit unions will even waive the fee if you are a "Military Saver" or "Fort Benning Saver" until you reach the balance that avoids fees.
Aca,!Ac Use cash whenever possible. Research shows that people who use cash spend less than those who use debit cards or credit.
Aca,!Ac Be a wise consumer. Independent research is your best ally. Become fast friends with Consumer Reports and other rating organizations. Check out unfamiliar vendors with the Better Business Bureau and state agencies before using them.
Aca,!Ac Any time you receive a cost-of-living increase, promotion, income-tax refund or other bonus, apply the rule of thirds: Put a third in savings; apply one-third to increase a debt payment and pay it off sooner; and use the last third for some special item you have planned for.
Aca,!Ac If you are receiving a large income-tax refund, change your withholding to stop giving Uncle Sam a free loan each year and use that money yourself to earn more money.
Aca,!Ac When you pay off a debt, add that money to another debt payment to reduce it more quickly, or if you are debt-free, put it into savings.
Common financial pitfalls
Aca,!Ac Failing to maintain a bank account journal.
Aca,!Ac Living on credit. Credit does NOT supplement your income; servicing debt reduces the amount of money you have available for monthly living expenses such as rent, food, gas, telephone, utilities, insurance, cable, Internet and entertainment.
Aca,!Ac Buying big-ticket items - including cars, furniture and jewelry - without research and based on the monthly payment instead of the actual cost.
Aca,!Ac Not having an emergency fund. The first goal in your emergency fund should be that first $1,000. That's $83.33 per month over a year.
Aca,!Ac Not starting to save early enough. The earlier, the better. The $80 a 20-year-old puts away each month will cost the person who doesn't start until 40 years old $700 to get to the same place by age 60.
Aca,!Ac Paying only the minimum payment on debt. Credit statements now have to show you how long it will take to pay off the debt if you make only the minimum payment and how to pay it off sooner. You need to pay more attention to that and make it your standard operating procedure.
Aca,!Ac Signing contracts without reading them. Nearly everyone who's gotten a "raw deal" willingly signed the contract for that raw deal because they failed to read the contract.
Source: Fort Benning ACS financial readiness program manager
FINRA Investor Education Foundation
A supporter of Military Saves Week, the FINRA Investor Education Foundation is a partner in the Department of Defense Financial Readiness Campaign. It encourages military families to reduce their debt and start saving now.
Aca,!Ac Use the foundation's savings calculator at apps.finra.org/Calcs/2/Savings to determine how much you need to create an emergency savings fund. Since military families' lives can change quickly, start planning for three to six months worth of expenses in an FDIC-insured account.
Aca,!Ac Check out FINRA's retirement calculator at apps.finra.org/investor_information/calculators/2/retirementcalc.aspx to learn how much you'll need to retire. This should include any Thrift Savings Plan contributions and expected pension.