USA — Military Saves Week Spotlights Importance of Saving

WASHINGTON — Ser­vice mem­bers and their fam­i­lies should “start small and think big” when kick-start­ing a sav­ings plan, a finan­cial expert said today.
“It’s not what you make, it’s what you keep,” Pam McClel­land, a senior pro­gram ana­lyst in the Pentagon’s office of fam­i­ly pol­i­cy and chil­dren and youth, told Amer­i­can Forces Press Ser­vice. “A lit­tle bit can real­ly mean a lot.”

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. 

Mil­i­tary instal­la­tions around the world are spon­sor­ing finan­cial fairs, lun­cheons, speak­ers and sem­i­nars this week, and are work­ing with on-base cred­it unions and banks, mil­i­tary exchanges and com­mis­saries to build aware­ness of the impor­tance of finan­cial readi­ness and to kick off the military’s year-round finan­cial readi­ness cam­paign, McClel­land said. 

The campaign’s empha­sis is on sav­ings, which is appro­pri­ate in today’s econ­o­my, McClel­land not­ed. The campaign’s slo­gan, “Start Small, Think Big,” pro­motes the long-term ben­e­fits of sav­ing even a lit­tle each month. 

“We’re now in the world of the 401K,” she said. “We don’t have pen­sions wait­ing for these young folks any more; it’s not your grandfather’s retire­ment plan any more. We’ve focused a lot on cred­it up till now and spend plans, but the empha­sis on sav­ings has to be renewed, and we have to do that with our young folks in and out of uniform.” 

To start, peo­ple should devise a sav­ings plan with set goals in mind, whether it’s a new house, col­lege edu­ca­tion, a trip or retire­ment. McClel­land sug­gest­ed that peo­ple fig­ure out what their goal will cost, then divide that sum by the num­ber of pay­days to accom­plish the goal. This gives them incre­men­tal goals along the way, she said. 

“Peo­ple would come to me and say, ‘I have 200 bucks in my sav­ings account, and I’d say, ‘That’s great. What’s it for?’ ”, she said. “If they did­n’t have an answer to that, odds are it’s not going to stay there, because they don’t have it ded­i­cat­ed to some­thing that’s going to make their life better.” 

A sur­vey of spend­ing and sav­ing habits released yes­ter­day dri­ves McClelland’s point home. The sur­vey showed that con­sumers with sav­ings plans are far more like­ly to save than those with­out one. 

In one sur­vey find­ing, 85 per­cent of the peo­ple sur­veyed with a sav­ings plan said they have suf­fi­cient emer­gency sav­ings, while just 50 per­cent with­out one said the same. Addi­tion­al­ly, 88 per­cent of those sur­veyed with a plan spend less than their income and save the dif­fer­ence, com­pared to 50 per­cent of those with­out a plan. And 61 per­cent of those sur­veyed said they’re sav­ing enough for retire­ment, com­pared to 27 per­cent with­out a plan. 

For ser­vice mem­bers, McClel­land point­ed to the Thrift Sav­ings Plan as one of the best avenues for jump-start­ing a long-term sav­ings plan. She encour­aged ser­vice mem­bers who aren’t already con­tribut­ing to their Thrift Sav­ings Plan to start. 

“I can’t empha­size enough what a won­der­ful pro­gram we have in the Thrift Sav­ings Plan,” she said. “TSP makes it easy to save.” 

Even if ser­vice mem­bers plan to sep­a­rate after four years, they should con­tribute, McClel­land 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. 

Debt should­n’t be a deter­rent, McClel­land said, because sav­ing is pos­si­ble in con­junc­tion with knock­ing down cred­it-induct­ed debt. 

“You can’t wait too long, depend­ing on your age, … to start long-term sav­ings, or you lose that won­der­ful ben­e­fit of com­pound inter­est,” she said. How­ev­er, peo­ple first should sit down with a finan­cial expert to deter­mine the best track for their indi­vid­ual situation. 

The Mil­i­tary Saves Cam­paign also includes a Mil­i­tary Chil­dren Saves ini­tia­tive that is aimed at build­ing finan­cial respon­si­bil­i­ty in mil­i­tary chil­dren and youth. 

“We can start plant­i­ng those seeds and make it part of a skill set ear­ly on,” McClel­land said. “If you get a quar­ter, you can take a nick­el and put it away. It starts them on a cycle that will reward them the rest of their life.” 

Bren­da McDaniel, a senior pro­gram ana­lyst in the Pentagon’s office of fam­i­ly pol­i­cy and chil­dren and youth, sug­gest­ed par­ents encour­age chil­dren to take at least half of their allowance and put it in savings. 

McClel­land said offi­cials are work­ing with the Depart­ment of Defense Edu­ca­tion Activ­i­ty, youth cen­ters and child devel­op­ment cen­ters to instill this finan­cial mes­sage in mil­i­tary chil­dren and youth around the world. 

McClel­land acknowl­edged the addi­tion­al chal­lenges mil­i­tary fam­i­lies encounter, includ­ing deploy­ments and fre­quent moves, which “can destroy a bud­get and a rou­tine you’ve fall­en into,” she said. 

“It’s very, very impor­tant that we look at the impact of emer­gency sit­u­a­tions and relo­ca­tions and real­ly stress that with our folks,” she added. 

Finan­cial readi­ness is vital in the mil­i­tary, McClel­land not­ed, since it’s tied so close­ly to mis­sion readi­ness as one of the pil­lars of per­son­al readiness. 

“If you are more secure in your per­son­al life, you’re more able to attend to the mis­sion at hand,” she said. 

“If you have bill col­lec­tors call­ing, if you feel like you don’t have enough mon­ey to do what you want for your kids, it’s hard to con­cen­trate on launch­ing that air­plane or doing what­ev­er your job is for the mis­sion,” she con­tin­ued. “Our lead­er­ship has very much rec­og­nized all of the effects per­son­al readi­ness has on mis­sion accomplishment.” 

This recog­ni­tion has led to accred­it­ed per­son­al finan­cial man­agers being in every ser­vice fam­i­ly cen­ter, as well as per­son­al finan­cial coun­selors who work with state and com­mu­ni­ty offi­cials as part of joint fam­i­ly sup­port assis­tance pro­gram teams, McClel­land said. And for peo­ple who are geo­graph­i­cal­ly dis­persed, the Defense Department’s Mil­i­tary One­Source con­sul­tants can pro­vide tele­phon­ic coun­sel­ing or refer peo­ple to a coun­selor in a community. 

McDaniel, who also is the archi­tect of the Pen­ta­gon Mil­i­tary Saves Fair, encour­aged peo­ple to take action today by tak­ing the “saver pledge” on the Mil­i­tary Saves web­site, where they can pledge to save for every­thing from a new car to a new house. By doing so, peo­ple may be inspired to take a clos­er look at their over­all finances, includ­ing cred­it, debt and sav­ings, she said. 

“This will, hope­ful­ly, lead them to get­ting assis­tance from some of the myr­i­ad of resources we have avail­able to them,” McClel­land said. 

Finan­cial man­age­ment tools such as spend­ing and sav­ings plans don’t vary much over the years, McClel­land not­ed. The goal, she said, “is reach­ing the point where we can get folks to val­ue each of those tools and how impor­tant they to their qual­i­ty of life and hap­pi­ness. It just makes for a bet­ter qual­i­ty of life all around.” 

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs) 

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