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.”

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

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