It's no secret that our government is tightening its purse strings. It may not be affecting the actual amount of your paycheck right now but it could soon be affecting it through other means — lack of available services, health care premiums, etc.
I recently picked the brain of my friends Jeff Rose, combat Veteran, Certified Financial Planner, and author of Soldier of Finance, and Ryan Guina, the man behind The Military Wallet, to ask them a few nagging questions I had about the current state of our nation and the affects it will have on our military.
Tara: What overall advice do you have for the typical military family being affected by the current economic state of our country?
Jeff: Most military personnel are familiar with a sensitive item report verifying that all of your equipment is accounted for and in good working condition. Think of your finances, your income, your credit card payments, your mortgage payment, etc., as being the sensitive items and you need to have a good understanding of what goes on on a monthly basis. It's important to do a spot check on these items and remain accountable for your money.
Tara: What is your best advice for military families who may need to reduce expenses?
Jeff: Often people have money going out, paying for services that they really don't need. The quickest way to reduce expenses is to write down all of your monthly payment amounts on a sheet of paper. Go through them line-by-line and see where you might be paying unneeded services. Are you paying for a gym membership but you never go? Can you downsize your cell phone package?
Tara: What ideas do you have for a military family to increase cash flow?
Jeff: Start a business on the side. Nowadays, there are plenty of opportunities online; monetize a blog, medical transcriptionists, open an Etsy shop, sell items on eBay. Technology has enabled military members and their families to make money and not have to leave their home office.
Tara: What is it the biggest hurdle that military couples face when it comes to finances?
Jeff: Not being on the same page with their finances. It is so important to communicate and have a clear understanding of what each other's goals and comfort zones are with the money. In the military, you often hear the term "battle buddy", a person that has your back no matter what and also knows everything about you. Your spouse needs to be your financial battle buddy.
Tara: What advice would you offer a new military family just starting out in these uncertain times in regard to saving and planning for the future?
Ryan: Take your time upgrading your lifestyle. Don't try to have everything at once. It's OK to have a used car, or even used furniture. Upgrade your lifestyle when you can afford to do so without incurring debt – not when lenders tell you that you can afford it – you will be ahead of 75% of the population.
Tara: What advice would you offer a retired military family when it comes to finding the money to fund those service benefits that were previously not an out-of-pocket expense?
Ryan: Be sure to review your benefits to see if you are taking advantage of everything you are eligible to receive. Some states offer benefits such as homestead tax exemptions for disabled veterans, tax free retirement pay, and other benefits which may affect your bottom line.
Tara: Are there current government benefits that families can and maybe aren't accessing that would be helpful?
Ryan: The Thrift Savings Plan — particularly the Roth TSP. Additionally, during deployments, the Savings Deposit Program (SDP) is another excellent benefit many military members aren't aware of. The SDP allows military members to contribute up to $10,000 of their pay while they are deployed, and earn a guaranteed 10% interest rate. Some non-financial benefits that military members and their families should take advantage of are the educational benefits. Military members can use the Tuition Assistance program to help pay for school or certification programs. Many spouses can take advantage of the MyCAA scholarship program, which is a scholarship program for military spouses.
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