MILITARY SPOUSE MUST-KNOW MONEY SKILLS. Adrianna Domingos-Lupher, MA, AFC

Transcription

1 MILITARY SPOUSE MUST-KNOW MONEY SKILLS Adrianna Domingos-Lupher, MA, AFC

2 WHAT WE RE COVERING Understanding Military Pay (LES) Budgeting Tips Must-know Resources Practical Tips

3 HOW TO READ A LEAVE AND EARNINGS STATEMENT (LES) Must Know Skill for all Military Spouses!

4 BEFORE WE DIG IN LES: Leave and Earnings Statement Civvie speak = pay stub Where can I find it? Little Know Fact- Limited Access Accounts Why you need to know the ins and outs Because you re the continuity General POA vs. Specific POA

5 WHAT YOU LL FIND ON THE LES Money Coming In Base Pay, BAS, BAH/OHA, COLA, Special Pay Money Going Out Taxes, GI Bill, SGLI/FSGLI, Advance Repayment, Education Debt, Star Card Garnishments Money You Directed Elsewhere Allotments to Bank Account, Bills, AFAF/CFC More Taxes Are you withholding too much? How do you know?

6 Money Coming In Money Going Out Allotments

7 MO OR LESS MONEY? MO PROBLEMS If you get paid MORE than you should Contact Finance ASAP You will be notified in the Remarks section Don t touch it! Set it aside. If you get paid LESS than you should Contact Finance Office immediately Emergency Resources (covered later on) Emergency savings

8 EVENTS THAT AFFECT AN LES TDY PCS Marriage Divorce Promotion/ Demotion Dependency Determinations Special Duty Assignments

9 THRIFT SAVINGS PLAN Operates like 401k Barclays PLC Manages the Index Funds Numerous investment options with varied risk Taxes do not come out until you withdraw at age 59 ½ The money is yours whether you stay for twenty or leave early Compliments already existing retirement pension Can be rolled over to a traditional IRA upon separation or retirement

10 SAVINGS DEPOSIT PROGRAM Best known as SDP Savings program for servicemembers serving in combat zones SM can deposit up to $10,000/deployment and earn 10% interest compounded annually. Deposits can be made in cash, by check, or through allotment. Great way to get a boost on liquid assets, if available. Like a CD.

11 BUDGETING TIPS FOR MILITARY FAMILIES

12 STARTING FROM SQUARE ONE Most Americans do not know how to manage their personal finances because they were not taught how to do so. Financial disagreement is one of the top causes of divorce million bankruptcies are filed in the US annually.

13 WHY BUDGETING IS A LITTLE DIFFERENT FOR MILITARY FAMILIES Military Families Move more than the average American family Experience short-notice or no-notice family separations Experience ups and downs in pay with each assignment and deployment

14 YOUR MILITARY MEMBER MUST BE FINANCIALLY FIT There are clear consequences for military members who are do not have their personal finances in order. Military members can face Loss of security clearance criminal charges Possible discharge from the military

15 DOWN AND DIRTY BUDGETING BASICS 1. Budgeting is a team sport. Set goals together. 2. Know how much money you make net not gross. 3. Know how much money you spend and see if it fits recommended spending and savings guidelines. 4. Examine your debt. How much do you owe, at what interest rate, and what s the monthly repayment? 5. Not sure where all of the money is going? Track it. 6. Make savings a priority. Pay yourself first.

16 RECOMMENDED SPENDING GUIDELINES Debt Repayment 5% Charity 10% Savings 10% Miscellaneous 10% Housing 30% Food, Paper, Cleaning 15% Medical 5% Transportation 15%

17 WHY EMERGENCY SAVINGS IS CRITICAL Emergency Savings = 3-6 months of monthly expenses ES increases your Financial independence Ability to feel secure when an emergency arises Having ES decreases your Dependence on loans to deal with unexpected expenses Stress associated with unexpected expenses

18 NEED-TO-KNOW RESOURCES FOR PERSONAL FINANCIAL MATTERS

19 SERVICEMEMBER S CIVIL RELIEF ACT (SCRA) 6% Cap on interest rates on debt acquired before entering active duty service Lenders cannot deny or revoke, change the terms of an existing loan, or refuse to grant SM credit because SM utilized SCRA protections. If active duty service keeps SM from a scheduled non -criminal court appearance, SCRA allows you to request a postponement. If SM rent a home or apartment, SM s landlord cannot evict SM or dependents w/o a court order. SM can terminate rent or lease agreements in the event of a pcs or deployment (90 days or more). Other protections include automobile leases, foreclosures, health and life insurance, and state tax relief. Read more: http :// ycenter/deploymentpcs/p124319

20 ADVANCE PAY Servicemembers can request advance pay to meet the extraordinary expenses of a PCS. (DD Form 2560) Not to exceed 3 months basic pay. Can be paid back over the course of up to 24 months. Cannot be used towards expenses already covered by other entitlements Requires commander s approval Read More: yfamily.org/201 3/06/17/militar y -advance -pay -its-not-apayday -loan/

21 IN CASE OF EMERGENCY Relief Societies Branch specific Air Force Aid Society Army Emergency Relief Coast Guard Mutual Assistance Navy and Marine Corps Relief Society Assistance available via your installation s support programs (POA required if SM not present) USAF: Airman and Family Readiness Center (A&FRC) USN: Fleet & Family Support Center USMC: Marine Corps Community Services USA: Army Community Services USCG: Office of Work-Life Programs If you live 50+ miles away from closest aid office, the American Red Cross will provide reciprocity emergency aid. Additional support and resources via FRGs, Ombudsmen, and Key Spouses

22 FREE FINANCIAL COUNSELING & BUDGETING ASSISTANCE Installation support offices Face-to-face Seminars and workshops Books and resources Military One Source Wealth of articles, worksheets, and resources One-on-one counseling over the phone or in person (where available) 12 counseling sessions per issue, per calendar year Available to active duty, reserve, and guard Call Financial planning assistance available Explore investing, savings, retirement options

23 BEST MONEY PRACTICES FOR MILITARY FAMILIES

24 MONEY SAVING STRATEGIES FOR MILITARY FAMILIES 1. Shop at the Commissary. 2. Price challenge at The Exchange, in store AND online. 3. Use ITT for attraction tickets and movie tickets. 4. Always ask if a military discount is available even for the unusual. 5. Use the installation veterinary services (if there s one available)

25 PRACTICAL TIPS FOR MONEY MANAGEMENT Always plan your spending with the next move in mind. If you re living off-base, try to cover rent/mortgage + living utilities with BAH. Remember commutes matter, bigger isn t always better, don t be afraid to negotiate your rent, and if all else, everything is temporary. Learn to live on 1 or 1.5 income. Don t buy house specific furniture or décor. Pets cost money especially if you re moving overseas. Be prepared.

26 RESOURCES AT A GLANCE Militar y One Source, Free Financial Counseling Emergency assistance All have reciprocity agreements w/ each other and the ARC (if you live 50+ miles from nearest installation) Army Emergency Relief Locator: Air Force Aid Society Online application: Navy and Marine Corps Relief Society Assistance Page: Coast Guard Mutual Assistance Locator: Militar y Pay Access LES: Pay charts: BAH/OHA Rates: BAH: OHA: COLA: PCS Entitlements: DLA Rates:

27 QUESTIONS?