Financial Education for M embers of the Armed Services

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Financial Education for Members of the Armed Services

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Financial Readiness Program

Topics of Discussion

• Budget• Credit and Security Clearance Issues• Low Cost Loans• Thrift Savings Plan

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• Over 2.6 Million Service members have deployed - Operation Enduring Freedom - Operation Iraqi Freedom - Operation New Dawn

• Forty percent of troops have deployed more than once

• Six areas of increased risks for Service members:- Mental heath - Spirituality- Social and role functioning - Physical health- Relationship functioning and family life - Financial well-being

Anticipating the Landscape in the Years Ahead: Military Members Transition to a Post-War Mission, July, 2014

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It is DoD policy that Service members and their families have primaryresponsibility for their well-being. Family readiness services enhance

members’ and families’ abilities to fulfill that responsibility.

Ready Service Members and Families are:• Knowledgeable about the potential challenges they may face• Equipped with the skills to competently function in the face of such challenges• Aware of supportive resources available to them• Make use of the skills and supports in managing such challenges

Financial Readiness = Mission Readiness

DODI 1342.22, July 3, 2012

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The Pillars of Personal Financial Readiness1. Establishing good credit2. Maintaining financial stability3. Committing to routine Savings4. Taking part in the Thrift Savings Plan and Savings Deposit Program5. Enrolling in Servicemembers Group Life Insurance (SGLI)6. Taking only low-interest loans7. Using low-cost Morale, Welfare and Recreation programs8. Preserving and protecting security clearances

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2013 Quick Compass of Financial Issues Survey of Active Duty members from all four Service branches (Army, Navy, Marine Corps and Air Force)

Financial conditions of Active duty Service members

67% - Described their financial condition as comfortable

24% - Reported that they “occasionally have some difficulty making ends meet

10% - Responded that they were not comfortable with their financial condition.

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Financial Readiness ProgramDate: Living Expenses Debt Information

Rent/Mortgage $ - Creditor Mo Pmt Acct Bal

Name: Property Taxes, Assoc Dues, etc $ - Tricare Dental $ - $ -

Electric/Gas/Water/Sewage/Trash Removal $ - $ - $ -

Rank:Proud Soldier! Telephone (Home) $ - $ - $ -

Telephone (Cellular) $ - $ - $ -

SSN:000-00-1234 Cable Plan (Phone, Internet, etc) $ - $ - $ -

Internet $ - $ - $ -

Cable $ - $ - $ -

Groceries (Food, Cleaning, Hygiene, etc) $ - $ - $ -

School Lunches (Or Other Lunches) $ - $ - $ -

Entitlements Gasoline $ - $ - $ -

Base Pay $ - Auto Maintenance/Repairs $ - $ - $ -

BAS / RATS $ - Public Transportation $ - $ - $ -

BAH $ - Child Care $ - $ - $ -

Special Pay $ - Nursery, Kindergarten or Private School $ - $ - $ -

Other $ - Allowances $ - Totals $ - $ -

Other $ - Recreation, Entertainment $ -

Total Entitlements $ - Meals Out $ -

Savings $ -

Federal Taxes $ - Games, Hobbies, Sports, etc $ -

FICA - Social Security $ - Clothing $ -

FICA - Medicare $ - Dry Cleaning, Laundromat, etc $ -

SGLI $ - Barber/Beautician $ -

State Taxes $ - Postage/Stationary $ -

AFRH $ - Auto Insurance $ -

Repay Advance $ - Renter's Insurance/Renters $ -

TSP $ - Life Insurance (Not SGLI, etc) $ - SUMMARY

$ - Pet Expense $ - Net Income $0.00

Total Collections $ - Medical Expenses (Co-pay, Prescriptions) $ - -Living Expences $0.00

Income Charity, Church, etc $ - -Debts $0.00

SM Net Monthly Income $ - Investments $ -

Self Allotments $ - Child Support/Alimony $ - Leaves $0.00

Other: $ - Other: Walmart $ -

Other: $ - Other: $ - Current Debt to Income Ratio

Total Net Mo. Income $ - Total Living Expenses $ - #DIV/0!

ERICA F. DRAME

GS-12


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Understanding Good Credit

DoD Congressional Report, Enhancement of Protections on Consumer Credit for Members of the Armed Forces and Their Dependents, April, 2014

Many Service members continue to struggle with the consequences of high-costdebt and that lenders have developed numerous products designed to evade the

consumer protections currently in place for payday loans and auto title loans.


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Defense Manpower Data Center QuickCompass Survey shows that 11% of enlisted Service members reported using:

Payday loansVehicle Title loansBank deposit advancesPawn Shops and/or Installment loans with interest rates over 36% APR

DoD Congressional Report, Enhancement of Protections on Consumer Credit for Members of the Armed Forces and Their Dependents, April, 2014

Why Low Interest Loans are Important

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Army Emergency Relief

Army Emergency Relief (AER) is a private non-profit organization that provides emergency financial assistance to military personnel (active and

retired) and their families in times of distress. AER exists primarily for “Helping the Army take care of its own”.

AER is open to Active Duty and Retired military and their ID card family members; and Reservists and National Guard (while on active duty, Title 10

for more than 30 days) and their ID card family members.

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Army Emergency ReliefAER has introduced a few new categories of assistance and programs:- Financial Fitness Program - Dental - Travel funds for relocation - Child car seats- Repair of HVAC - Cranial helmets- Purchase/repair of stoves and refrigerators- Widows’ lifetime membership with Army and Air Force Mutual Aid

Association (AAFMAA)- Scholarship for children of Soldiers who die on active duty. - Commander’s Referral Program - Educational Scholarships (Dependent and Spouse)

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Thrift Savings Plan (TSP)

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Basic Investing


• Benefits of TSP

• Rule of 72

• Risk Tolerance

• Types of Market Risks

• How much do you need for Retirement?

•

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Resources

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Financial Readiness ProgramArmy Community Service

9800 Belvoir RoadBuilding 200

Erica F. Drame, AFC, CCRRFinancial Readiness Program

ManagerTel: 703-805-1833

[email protected]

Documents

Financial Education for M embers of the Armed Services