Citing the potentially devastating impact of financial issues on career and home life, officials are encouraging troops and their families to build financial fitness by kick-starting a savings plan and reducing their debt.
"When families are financially fit, they are more successful in their life," said Barbara Thompson, director of the Pentagon's office of family policy, children and youth.
"Money isn't everything, but it does impact relationships and job performance," she said.
Defense Department officials are putting the spotlight on financial readiness -- particularly the importance of saving -- this week as part of a larger, national emphasis on financial well-being.
Military Saves Week, part of America Saves Week, is an annual event intended to help people become better financial planners. This year's campaign slogan, "Set a goal, make a plan, save automatically," promotes the long-term benefits of saving even a little each month.
Throughout the week, military installations around the world will sponsor financial fairs, luncheons, speakers and seminars, and will work with on-base financial institutions, military exchanges, commissaries and nonprofit organizations to build awareness of the importance of financial readiness.
"It offers us an opportunity to educate service members and families, including spouses and youth, about good financial management," Thompson said.
As a start, Thompson suggested people have at least $500 set aside for unexpected emergencies, whether it's a military-related moving expense or a tire change.
If people have something saved, they can avoid the temptation of borrowing from a predatory lender or other financial resource that may have a high interest rate and other unattractive terms, she explained.
"Unexpected expenses really tap into your short-term investments and your short-term savings plan," she said.
The America Saves website offers some other savings strategies:
-- Pay off consumer debt with double-digit interest rates. It can take years to pay off a loan if people stick to the minimum balance due. For example, it would take someone with a $3,000 credit card balance at 19.8 percent interest nearly 40 years to pay off the balance if they stick to the minimum balance due. The interest charges alone would total more than $10,000.
-- Participate in a work-related retirement program, such as a 401K or the military's Thrift Savings Plan.
-- Save monthly through an automatic transfer from checking to savings. What people don't see, they don't miss.
-- Buy a home and pay off the mortgage before retirement.
By doing so, people can reduce their housing expenses and have an asset that can be borrowed on in an emergency or converted into cash upon the sale of a home.
Thompson noted a disturbing trend of young troops entering the service with already accumulated debt. "We want to make sure ... it's not overshadowing their entire career," she said.
A bad credit report can lead to a lost security clearance, which may bar troops from doing their jobs, and financial issues can take their toll on a service member already dealing with the stressors of deployments. Thompson cited financial issues as a major factor in suicide.
Thompson pointed to the Thrift Savings Plan as one of the "most powerful savings tools" at service members' disposal. She encouraged troops who aren't already contributing to their Thrift Savings Plan to start.
Even if service members plan to separate after four years, they should contribute, she advised, since the funds easily can be rolled over to a 401K plan at their new job. People also can explore savings bonds and saver accounts sponsored by credit unions and on-base banks, she added.
It's never too early to start, Thompson noted. Even preschoolers can learn the benefits of saving. Parents can teach children how to manage money by having them put a part of their allowance away for savings, part for charity and keeping some money to spend.
Thompson urged people to visit http://saveandinvest.org
, which offers people of all ages information on how to make wise financial decisions.
People can take steps toward financial fitness today by taking the "Saver Pledge" on the Military Saves website, located at http://militarysaves.org
, or by talking with a personal financial manager. These accredited counselors are located in family centers around the world and are attached to joint family support assistance program teams. They can help people with budgeting, managing debt, setting financial goals and navigating resources, Thompson said.
Additionally, the Defense Department's Military OneSource consultants can provide telephonic counseling or refer people to a counselor in a community.
People can contact a consultant at 1-800-342-9647 or online at http://www.militaryonesource.com
Thompson cited the importance of starting healthy financial habits at a young age.
"You can't start saving when you're 50," she said. "You need to start saving when you're 15. Start to think about what you want to do with your life. You want to have a comfortable quality of life and you can't do that if you haven't saved all the way through your career."
Original content found here