A&FRC helps military save

  • Published
  • By Senior Airman La'Shanette V. Garrett
  • 2d Bomb Wing Public Affairs
BARKSDALE AIR FORCE BASE, La. --  Barksdale's Airman & Family Readiness Center hosted its 2010 Military Saves Week Feb. 22 through 28.

Throughout the week the A&FRC promoted financial readiness among servicemembers and their families by encouraging them to effectively manage or eliminate their debt and start saving for the future. Activities consisted of holiday planning, basic investing, basic saving, credit card cut-up and budget. On Thursday, the A&FRC sponsored guest speaker Peter Bielagus, Young America's Financial Coach, who gave a seminar on Money Management Secrets at Hoban Hall to young Barksdale Airmen.

During his seminar, Mr. Bielagus informed the audience now is a great time to start saving.

"There are only two reasons to save money," said Mr. Bielagus. "To purchase something later that you can't afford now and in case of an emergency. The most important tool is to have a plan. With the right plan you can pull yourself out of any financial situation."

In the civilian world, a financial advisor costs between $150 and $350 an hour. Servicemembers and their families can receive unlimited financial counseling for free at the A&FRC.

"We have three certified financial counselors on staff Monday through Friday," said Stephaine Reyes, Chief of A&FRC. "This week draws members to concentrate on building long-term wealth and debt reducing."

Military saves is a national campaign to persuade, motivate, and encourage military families to save money every month, and to convince leaders and organizations to be aggressive in promoting automatic savings.

To register and take the "Saver Pledge," go to http://www.militarysaves.org. For more information on ways to save, call the A&FRC at 456-8400.



Helping Dollars Make Sense

How can one reduce their debt?

Before you can reduce debt you need to know who you owe, how much you owe and what interest rate you're paying. The financial counselors on base can help you calculate all this free of charge and help you get a plan together to reduce those debts. The best thing you can do is pay the minimum amount on all of your debts, except the one with the highest interest rate. Put as much as you can toward that one. When you have eliminated that debt, move on to the next highest until you're debt free.
What kind of programs are there to help military members and their families reduce their debt and save?
In terms of specific programs, servicemembers should investigate contributing to the Thrift Savings Plan which is a tax-favored retirement account. They should also ask their base financial counselor about a debt-reduction program called "Power Pay." It can help you reduce all your debts in half the time! Finally for servicemembers deploying to a combat zone, they should inquire about the "Savings Deposit Program" where they can earn a guaranteed 10 percent on their money while they are in a hot zone.


How long should an emergency fund last and how much should one have in it?

Statistically speaking, most emergencies last six months or less. Emergencies that last longer are usually the result of someone not having the proper health and disability insurance, which is not an issue for servicemembers. Because of their steady paycheck and guaranteed medical benefits, a good target for servicemembers would be to set aside six months of living expenses in a stable account. Of course nobody saves this amount in a week. It will take some time. But putting a little away every month and you'll get there sooner than you think.

When should one start saving for their retirement?

Yesterday! It is never too early to begin. The only exception to this rule is people who are swamped with high - interest debt like payday loans or credit card debt. Wipe that out first then put aside money in your TSP.

What is a sufficient amount one should have saved for retirement?

For the most accurate answer, make an appointment with your base financial advisor. But for now, the simple way to make that calculation is divide your salary in your retiring year by 5 percent. This calculation assumes that when you retire you will be able to earn 5 percent on your money. If in your year of retirement you earned $50,000, then to "recreate" your salary through investments, you would need to save $1 million by the time you retired. This way the interest on your investments would be $50,000 per year. If you earn a lot more than $50,000 a year, then you will need to save more.

Is it a good idea to invest? If so why?

Yes. In truth there is never a bad time to invest as long as you are investing in things that correspond to your goals. Someone who is retiring tomorrow should not be investing heavily in the stock market, but they should be looking at purchasing safe government bonds. Someone who has 40 years to retirement should not be investing all their money in low - interest bank accounts but they should be investing in their TSP. People who get scared when the stock market goes down are often missing out on great buying opportunities. In addition people who are too greedy in the market often hang on too long when they should be in safer investments.

What are some of the pros and cons of investing?

The big con is that there are risks involved in investing. You need to be aware of those risks and how you can reduce them before you invest. People who don't understand the investment they are buying have no business buying it. In addition investing often asks you to set aside money for a long time.
But we accept these cons because of the pros, namely that our money will grow. While we are earning money during our regular job, our money is also earning money through our investments. Investors have two jobs, but they only need to show up to one. There is another, more immediate benefit of investing and that is once someone gets set up on an investing plan, they eliminate a lot of stress from their life. Even though they are not out of debt immediately and they are not a millionaire overnight, they do feel more comfortable since they are headed in that direction.
What is the most important tool one can use for saving and reducing their debt?
The most important tool is to have a plan. With the right plan you can pull yourself out of any financial situation. I've traveled the world speaking to servicemembers. I've personally met servicemembers who are millionaires, servicemembers who own five rental properties and servicemembers who have wiped out $40,000 worth of credit card debt in three years. Whatever your situation it is possible to turn it around with the right plan. And remember, if you need help, there are counselors on base who can help, for free.


(Editor's note: This information was provided by Peter Bielagus, Young America's Financial Coach.)