140660 Military Financial Education Workbook

financialgenius.usbank.com
Military Financial
Education Workbook
Financial education to assist military
personnel and their families prior to
and returning from deployment.
Index
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Checklist Worksheet . . . . . . . . . . . . . . . 2
Develop a Spending Plan . . . . . . . . . . . . . . . . . . . . . . . . . 3
Four Step Spending Plan . . . . . . . . . . . . . . . . . . . 3
Spending Plan Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ideas to Decrease Spending . . . . . . . . . . . . . . . . . . . . . . . 5
Ways to Stretch the Dollar . . . . . . . . . . . . . . . . . 5
Establishing a Reserve Fund . . . . . . . . . . . . . . . . . . . . . . 6
Reserve Fund Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . 7
Legal Readiness for Servicemembers . . . . . . . . . . . . . . . 8
Financial Aid & Student Loans . . . . . . . . . . . . . . . . . . . . . 9
Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
My Action Plan Worksheet . . . . . . . . . . . . . . . . . 10
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Introduction
U.S. Bank is committed to supporting members of the armed forces and their family members
and we understand that service in the U.S. Military can mean a life of mobility. Learning to
manage money successfully can help you better deal with the uncertainties you face every day.
Your financial health is vital to your career in the military, whether it is for one tour or for
twenty years. Lack of financial responsibility can cause a domino effect with other job
responsibilities, which can possibly result in negative evaluations, loss of promotions, loss of
security clearance, reduction in rank or even administrative discharge.
Communication is crucial for armed forces personnel and often families avoid talking about
money. Some individuals do not learn how to plan their finances before entering active duty;
married couples may argue about finances instead of openly discussing them; and parents
do not always share their financial concerns or knowledge so that their military children can
understand the situation.
Prioritizing your finances will enable you and your family to have better quality of life with
less stress, more money in savings, improved purchasing power and increased financial
security. Establishing a solid financial plan and reserve fund can prepare you for the
challenges that life could throw your way.
This workbook will help you create a financial strategy that will serve you and your family
while you serve our country. Course objectives will help you with the following:
• Review your current financial situation
• Complete a financial checklist
• Develop a spending plan
• Establish a reserve fund
• Tips for financing college
• Commit to an action plan
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 1
Financial Review
Do you have your finances in order?
What current issues should be part of the family discussion concerning money?
Are you aware of all the military benefits to which you are currently entitled?
When you are called to duty, you have many things to think about. Knowing where to turn
is imperative to addressing your needs in preparation for deployment. You can review
the list of Benefits for Service Members, such as healthcare coverage, housing and relocation
services, family support, education, retirement savings and more, at
http://militarypay.defense.gov/benefits/militaryben.html. You may also consider contacting your
military branch’s ombudsmen network, financial personnel in your chain of command or your
unit’s Family Liaison Officer.
Creating a list of financial questions and issues to be addressed is helpful – think about
your bank accounts, credit cards, monthly expenses, insurance premiums, any legal
responsibilities and unexpected expenses.
Financial Checklist Worksheet
Review this list and add any items of concern that are not listed here. Make sure to discuss
these items with your spouse or your child(ren)’s designated caregiver or a parent so your
finances can be handled properly while you are away.
q What type of bank or credit union accounts do you have and where are they located?
Do the current accounts allow family members access to funds?
q Where are the bank statements and account numbers stored?
q Who will have the checkbook and who will have the debit card? How will you communicate
the use of either to ensure there are sufficient funds to cover bills?
q Is everyone knowledgeable about writing checks, recording transactions and balancing the
account to the monthly bank statement? How will you determine if there are insufficient
funds and what is the plan if this happens?
q If you have credit cards, do you know the current amounts owed? Are the credit card
numbers written down in a safe place? Are the numbers and company contact information
written down in a safe place in case of loss or theft?
q If allotments or direct deposit to the bank are delayed, who can you contact?
q Do you have a list of monthly expenses, payment amounts and due dates written down?
q Who will be responsible for paying the bills?
q Is your life insurance policy up-to-date with correct beneficiary information? Where is the
policy stored?
q Do you have a safe deposit box? Where is it located? Who can access it?
q Do you have car insurance, homeowner’s insurance, renter’s insurance or other insurance?
Are the premiums current? Where are the policies stored?
q In whose name are the utilities, cellphone(s), cable and/or Internet services? Who can
request changes, upgrades and repairs?
q Is your will current? Who has a copy? Where is the original kept?
q Do you have a current power of attorney? Who has a copy?
q Is your Page 2 Record of Emergency Data up to date?
q Other: ______________________________________________________________
q Other: ______________________________________________________________
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 2
Develop a Spending Plan
A good way to start taking control of your financial situation is to develop a personal
spending plan, a step-by-step plan for meeting expenses in a given period of time. A
spending plan:
• Reduces the anxiety of not knowing whether you have enough money to pay your bills
on time
• Gives you a sense of control over your money
• Builds assets that will improve the quality of life for you and your family
A spending plan is all about choices, needs vs. wants. There may not be enough money for
everything you want, like cell phones, cable, car types, gym memberships, hobbies, name
brand clothing, etc. And sometimes, there may not be enough money for what you need, like
food or gas. Choosing how to use your money, knowing what your income and expenses are
every month, and establishing a reserve fund for emergencies will help you take control of
your financial situation.
Four Step Spending Plan
There are four basic steps to preparing and executing a spending plan:
1. Determine your monthly income and expenses.
2. Keep track of your daily spending (ask your bank for a transaction ledger to help with
this process).
3. Write down what you actually earn, and what you actually spend each month.
4. Find ways to decrease spending, and increase income.
Follow your plan for one month. Review the plan, cut out any unnecessary spending and
recalculate your spending plan for the following month. It’s important to communicate with
family members or close friends about your priorities and expenses in order to develop your
spending plan.
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 3
Spending Plan Worksheet
Use this worksheet as a guide to help you create your own spending plan. Add income
opportunities or expense items as necessary.
INCOME
Expected Per Month
Actual Per Month
Expected Per Month
Actual Per Month
Salary pay (after taxes)
After-tax wages from spouse’s income
Basic allowance for housing/subsistence
Other military allowances (uniform)
Child support
Social Security/Supplemental Security
Tax refund/Earned Income Credit
Apartment rental income
Other (investment income, bonuses)
EXPENSES
Housing
Rent/Mortgage
Food
Groceries
Dining Out
Transportation
Gas, Bus Pass, Parking
Car Maintenance/Repairs
Utilities
Cell Phone/Home Phone
Cable/Internet
Electric/Gas/Water/Garbage
Loan Payments
Auto Loan(s)
Credit Card(s)
Student Loan(s)
Insurance
Renters/Homeowners Insurance
Auto Insurance
Life Insurance
Miscellaneous
Entertainment
Clothing
Supplies
Medical
Other
Other
TOTAL INCOME
TOTAL EXPENSES
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 4
Ideas to Decrease Spending
Once you have a good handle on your monthly income and expenses, you can take a closer look at
easy ways to reduce your spending. According to Bankrate.com, the 10 biggest money drains are the
things that you can easily do without. Take a look:
1. Coffee: The average price of coffee is $1.38 (or more depending on the coffee vendor), reports
the National Coffee Association. If you buy a cup of coffee every morning for a year that could
add up to at least $500 a year. That's money that could be contributed to your retirement fund
or savings account.
2. Cigarettes: The average price for a pack of cigarettes in the United States is $4.54. A pack a
day can cost you about $1,660 a year.
3. Alcohol: The average cost of one beer is $5 including tip. If you buy two beers a day, it can add
up to $3,650 a year. It gets even more expensive if you buy a round of drinks for your friends.
4. Bottled Water: A liter of bottled water will cost you $1.50. Buying one bottle of water a day
will cost you around about $540 a year. This purchase will cost you and the environment in the
long run.
5. Manicures: A $20 weekly manicure could rob your savings of $1,040 a year. Doing your own
manicure will only cost you about $5 - the price of a bottle of nail polish.
6. Car washes: The average cost for basic auto detailing is about $58 and if you have your car
detailed every two months it will cost you $348 a year.
7. Buying Your Lunch Everyday: $9 will generally cover a decent lunch most work days. If you
buy rather than pack a lunch five days a week for one year, you shell out about $2,350 a year.
8. Vending Machine Snacks: The average vending machine snack is about $1. Buying a snack a
day will cost you $365 per year.
9. Interest Charges on Credit Card Bills: The median credit card debt for most Americans is
$6,600. Rate tables on Bankrate.com indicate that fixed interest rates on a standard average
is 13.44%. If you make the minimum payment each month it will take you 21 years to pay off
the debt.
10. Unused Memberships: A gym membership that goes unused is probably $40 a month, which
can add up to $480 a year. Either use the membership or cut your losses.
If you’re diligent and cut back on the extras, such as expensive coffee everyday, you’ll be able to
contribute more money to your savings account or reserve fund than you expected.
Ways to Stretch the Dollar
•
•
•
•
•
•
•
•
•
•
•
Carry small amounts of cash to limit your spending.
Eliminate or control your use of credit cards.
Buy only what you need versus what you want.
Take your written savings goals as a reminder when shopping.
Shop on-base, which is always tax free.
Use a grocery shopping list to prevent impulse buying. Stick to it!
Use coupons to save money on items you need.
Cook meals at home, freeze food/save leftovers and take lunch to work instead of eating out.
Buy used clothing, furniture, etc.
Limit your song, ringtone and app downloads.
Shop around for the best deal on big-ticket items, like cars and appliances. Some stores
offer discounts to military personnel.
• Pay your bills on time to avoid late fees, extra finance charges, utilities being turned off,
eviction, repossessions and a bad credit rating.
• Avoid rent-to-own stores, pawnshops and check-cashing stores.
• Use direct deposit for your paycheck or federal benefits – it’s safer and easier than using
paper checks, and your bank may reduce or eliminate the monthly fee if you have
direct deposit.
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 5
Establishing a Reserve Fund
According to a 2009 survey conducted by American Consumer Credit Counseling, 52% of
enlisted military personnel and 32% of officers reported not saving at all.
Deployment can put additional strains on your budget as new costs may arise. Setting aside
an emergency fund, also called a reserve fund, is one of the most important steps you
should take to safeguard your financial stability. A reserve fund set aside in a savings
account can earn interest. The purpose of your reserve fund is to cover a major unexpected
cost such as a medical bill or car repair, or the need to cover basic living expenses should
your spouse lose a job or get laid off.
To start a reserve fund, begin by saving a little at a time. You’ll see how quickly a reserve
fund can grow. Take it step by step:
1. Review your spending plan to see where you can economize.
2. Transfer excess money from each month’s budget to your reserve fund.
3. Build the account one day at a time.
4. Start saving today to reap the rewards tomorrow!
Each branch of the military can provide emergency funds for cases of financial hardship.
Typical allowable needs might include food or rent, funeral expenses or medical expenses.
Fines, credit card bills and other nonessentials are not eligible for assistance. For specific
information on any emergency-relief fund options at a military facility, connect with your
ombudsmen network,
talk with the community service office or visit your branch of the military online:
Army Emergency Relief – www.aerhq.org
Navy-Marine Corps Relief Society – www.nmcrs.org
Air Force Aid Society – www.afas.org
Coast Guard Mutual Assistance – www.cgmahq.org
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 6
Reserve Fund Worksheet
Consider your situation. What changes will you have to make in your life if you are deployed
or when you return from active duty? What costs are associated with those changes? What
additional expenses could you or your family encounter? Use this worksheet to help you
determine how much money you should set aside.
EXPENSE
Monthly Cost
Childcare and caregiver costs for single parents and married couples
deployed at the same time
Include money to be paid to a caregiver, money needed to pay for
transportation to get children to the caregiver, and any additional costs
children might face living with a caregiver.
Childcare and caregiver costs for married couples
Include any amount to be paid for child care that you do not currently pay.
Include extra money to ease stress on your spouse.
Income difference
If you know that your military pay will be less than your civilian pay, list
the difference here.
Healthcare cost difference
Do you know if healthcare insurance will cost more or less every month
while you are on active duty?
Other costs
Home: __________________________________________________
Car: ____________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
TOTAL MONTHLY COST
Add up the costs you entered for the items listed above
TOTAL AMOUNT NEEDED IN RESERVE FUND
One or two years of reserves is recommended
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 7
Legal Readiness for Servicemembers
The United States Department of Justice enforces the Servicemembers’ Civil Relief Act which
provides military members about to enter active duty with protection regarding rental agreements,
eviction, interest rates, mortgage foreclosure, insurance and tax payments. Always be proactive
and take the first step in contacting your landlord, credit card issuer, lenders, etc., as soon as you
are aware that you will be entering active military service. For assistance, military members can
contact their nearest Armed Forces Legal Assistance Program office.
The checklist is designed to help you prepare your legal affairs. Place a check in the box once you
and your family have discussed where the documents are located. Store information in a safe
place since it contains confidential information.
q
q
q
q
q
q
q
q
q
q
Document
Location
Birth certificates
Marriage certificate
Divorce decrees/separation agreements
Death certificates of deceased family
members
Naturalization or Citizenship papers
Current record of emergency data
Military records DD-214
Court orders pertaining to support and
custody of your legal dependents
Legal papers/adoption papers
Social Security number/cards
Yours:
Spouse:
q
q
q
q
q
q
q
q
q
q
q
Children:
Up-to-date will(s)
Power of attorney (general or specific)
Advance medical directive (durable power
of attorney)
Executor appointment
Medical power of attorney for children
Updated beneficiary for Service Members
Group Life Insurance (SGLI)
Completed family care plan
Up-to-date ID cards for all family
members
Insurance Policies
Life insurance policy(s)
Agent:____________________________________ Telephone:______________________
Household insurance policy(s)
Agent:____________________________________ Telephone:______________________
Automotive insurance policy(s)
Agent:____________________________________ Telephone:______________________
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 8
Financial Aid & Student Loans
Upon return from active duty, you may decide you want to further your education and attend
college. Scholarships, grants and federal loans should be the first financial aid options you
consider, and for good reason. Scholarships and grants do not have to be paid back and Federal
loans may have a lower interest rate than private loans.
Consider these helpful tips:
• Apply for GI Bill benefits through the Department of Veterans Affairs.
• Complete a Free Application for Federal Student Aid (FAFSA) every year or when your
circumstances change (job, income, family, etc.).
• Read your financial aid documents carefully and be aware of all obligations.
• Keep looking for new scholarships, grants and opportunities for work study.
• Communicate frequently with the financial aid office on campus, and let them know if you
are in financial trouble.
• Understand that student loans are an investment in your future, but they put you in debt and
must be repaid!
• Understand the terms of the loan.
• Use student loan money only for school expenses.
Resources
American Consumer Credit Counseling
http://www.consumercredit.com/financial-education/military-veterans.aspx
Department of Veterans Affairs
GI Bill – http://www.gibill.va.gov/
Military.com
http://www.military.com/money
Military Saves
http://www.militarysaves.org/
National Endowment for Financial Education
http://www.nefe.org/
Secretary of Defense
Military Compensation – http://militarypay.defense.gov/benefits/
Benefits for Service Members – http://militarypay.defense.gov/benefits/militaryben.html
United States Department of Justice
Servicemembers’ Civil Relief Act – www.justice.gov/crt/spec_topics/military/
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 9
Action Plan
An action plan is a simple list of all the tasks you need to finish and changes you need to make in
order to meet an objective; it gives you a framework for thinking about how you will complete
each task efficiently. Action plans also help to ensure you don’t miss any crucial steps in
achieving your goal(s).
Use your goals to create a spending plan and reserve fund by focusing on the following:
• Commitment – what do you plan to do?
• Obstacles – what might you face?
• Action – steps to success!
• Understanding – what did you learn with this session?
My Action Plan Worksheet
Main message for me from this session:
My personal commitment to action:
Obstacles that may get in my way:
What I need to do to succeed:
Not all loan programs are available in all states for all loan amounts. Interest rates and programs terms are subject to change without notice. See
the Consumer Pricing Information brochure for terms and conditions that apply to U.S. Bank Package Checking accounts. The creditor and issuer of
these cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A. Inc. and American Express. American Express is a
EQUAL HOUSING federally registered service mark of American Express. Credit products are offered by U.S. Bank National Association and subject to normal credit
approval. Deposit products are offered by U.S. Bank National Association, Member FDIC.
Military Financial Education • page 10
Notes
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Military Financial Education • page 11