Army Financial Readiness

1. Army Financial Readiness Crystal Terhune and Jean Austin University of Maryland Cooperative Extension

2. Army Financial Readiness Dept of Defense • Principals and Values • Budgeting • ID Theft • Banking • Savings/Investing • Credit • Insurance • Large purchases/scams

3. Emergency Fund Goals Budget Life Health Credit Record Financial Plan Insurance Property Financial Statements Financial Records Disability Liability Financial Foundation

4. How do you need to plan your money management in order to meet your goals? How much money will you need to reach those goals? Lifeline birth 85 yo • Draw a line to represent your life. • What is the average life expectancy in your family history? • Write that number on the far right of your “lifeline”. • What is your current age? Make a mark on the lifeline representing “where” you are NOW. • Think of milestones that have already happened to you and mark them on your lifeline. Ideas: Graduating high school/college, buying a car, etc. • What do you want to accomplish in the next 5/20/30 years? Map those events onto your lifeline.

5. How Do You Rate As A Money Manager? Complete the exercise. . . Total your scores in each column: SCORING A=1 B=3 C=5

6. How do you rate??? Are you comfortable with how you rated? Total Score: • OVER 110: SPENDTHRIFT • 70-110: BALANCED • BELOW 70: CONSERVATIVE spend⋅thrift  ˈspɛndˌθrɪft/ [spend-thrift] –noun 1.a person who spends possessions or money extravagantly or wastefully. adjective 2.wastefully extravagant. bal⋅anced  ˈbæl əns/ [bal-uh ns] noun, verb, -anced, -anc⋅ing. 1. Being ina state of equilibrium or equipoise; equal distribution of weight, amount, etc. 2. Havingmental steadiness or emotional stability; habit of calm behavior, judgment, etc. con⋅serv⋅a⋅tive    kənˈsɜr və tɪv/ [kuh n-sur-vuh-tiv] –adjective 1.traditional in style or manner; avoiding novelty or showiness: –noun 2.a person who is conservative in principles, actions, habits, etc.

7. Why does it matter? • Being a smart consumer can save you: • Money • Stress • Trouble • What are the benefits of smart money mgmt?

8. If you DON’T manage your money well, what are some of the things that can happen? Potential Problems RISING DEBT LOST POSSESSIONS REPOSSESSION LOSS OF CREDIT PAY GARNISHMENT* LOSE CLEARANCE LOSE PRIVELEGES CAN’T RE-ENLIST DISCHARGED / LOSE JOB INABILITY TO REACH YOUR GOALS!!!

9. So. . . Make your money work for you! Turn your dreams into goals! What are your financial dreams? How can you make them happen?

10. Garnishment 25% GARNISHMENTLIMIT IS ONLY FOR CONSUMER DEBT. GARNISHMENTNOT LIMITED TO 25%: • FAMILYSUPPORT PAYMENTS • EXCHANGE, NEX AND DPP ACCOUNT CHARGES** • REPAYMENTOF PREVIOUS OVERPAYMENTS • TAXES, IRS DEBTS **Military Exchange credit accounts and Deferred Payment Plans (DPP) have automatic garnishment provisions in their contracts. (no need for court– ALL of your pay can be taken!)

11. Set S.M.A.R.T.Financial Goals! • Specific • Measurable • Agreeable • Realistic • Time-bound

12. Changing dreams to specific goals What thought had to go into these? What other info would you need? • “I wish I could drive a car that’s paid for.” • By packing (not buying) lunch 2 days/wk, I will pay an extra $50/month on my car payment so my car will be paid off by Dec. 2009. • “I wish I wasn’t drowning in debt!” • I will only go out partying with friends every other week and I’ll put the extra $100 toward debt payments to pay them off by October 2010.

13. So, being a smart consumer means: • Recognizing your spending habits • Knowing where you stand • Knowing where you want your money to take you • Setting goals so you can get there!