Financial Tips for
Weathering the Furlough:
Your Lifeboat Drill
a presentation from
Army Community Service (ACS) of
USAG Rock Island Arsenal
Edition of April 15, 2013
“Uncle Jon” Cook
• Survivor Outreach Services – Financial Counselor
• Financial Readiness Program
• Personal Financial Management
(PFM) Specialist
•
Accredited Financial Counselor
(AFC)
•
Army Emergency Relief (AER)
•
Notary Public
• Employment Readiness Program
•
Military Spouse Employment Program (MSEP)
•
(Former) Professional in Human Resources (PHR) &
(Former) Certified Workforce Development Professional (CWDP)
(309) 782 - 0815
1 – 877 – 882 – 0523
jon.c.cook.civ @ mail. mil
www. riamwr. com / acs /
Personal Financial Management
a Call to Action
Can your current savings carry you
through the furlough and reduced pay?
Can you cut enough expenses to stay
within the budget?
Through end of September?
(through ____?)
• Actions you, your family and your co-workers may take
now to prepare.
• Commit to short and long term goals.
• Resources available to meet your goals.
http://readyarmy.ria.army.mil
Ready Army is the Army’s proactive
campaign to increase the resilience of
the Army community and enhance the
readiness of the force …
www. military saves. org
Sequence of the Presentation
• Lifeboat Drill Concept
• Working the Numbers
• Follow-up Actions
• Personal Financial Management (PFM)
Web Sites, plus References and Resources
• Financial Tips for “Weathering the Furlough”
• A Call to Action
Please do ask questions as we go through
the session.
This presentation is designed to give you
quite a few “Scooby Doo” moments!
Mother and Daughter
Team:
Elizabeth Warren
(now Senator Warren)
Amelia Warren Tyagi
Lifeboat Drill:
• In an emergency …
• Supplies (savings and assets)
• What fits “in the boat”?
Stupid Question – but play along:
How many sides does a circle have?
TWO!
Inside &
Outside
All of your expenses
have to fit
inside the circle!
Your Income Circle:
What is Spendable?
What is your Take-home Pay?
Why plan for savings now? Savings is way off in my future!
The Three Types of Money:
$ Past = debt
$ Present = daily living expenses
$ Future = non-routine expenses & emergencies
“It’s not the money you make; it’s the money you get to keep!” Ric Edelmann
Personal Financial Management Web $ites
www.riamwr.com/acs/financial-readiness
4b. Excel Spreadsheet
in weekly bands for
persons paid
bi-weekly
7. Excel Spreadsheet
for figuring out
“how far your money
will go?”
Lifeboat Drill: what expenses will fit within your take-home pay?
Spreadsheet from www.riamwr.com/acs/financial-readiness/
Do you need to
add savings to
cover all of your
expenses?
Other MS Excel Spreadsheets and Worksheets
www.riamwr.com/acs/financial-readiness/
Money Allocation Plan ($ MAP)
[budget] in Weekly Bands
“Savings to Spend”
Annual Spending
Estimation
Furlough Pay Estimator
Disqualifying & Mitigation Criteria for
Delinquent Financial Accounts
Examples of Mitigation Factors:
Examples of Disqualifying Factors:
–
–
–
–
–
–
–
–
–
Inability or unwillingness to satisfy debts.
Indebtedness caused by frivolous/irresponsible
spending with no intent/effort to repay the
debt.
Recurring history of bad debts, garnishments,
liens, repossessions write offs, etc.
Bankruptcy caused by financial irresponsibility.
Indebtedness caused by gambling, alcohol,
drug abuse, or other factors indicating poor
judgment.
A pattern of living beyond one’s means or ability
to pay.
Indifference to paying lawful financial
obligations.
The writing of checks with insufficient funds.
Engaging in deceitful/illegal actions: tax evasion,
embezzlement, fraud or attempts to evade
lawful creditors.
This slide courtesy of Security Office of
Tank and Automotive Command (TACOM)
•
The indebtedness was so infrequent or occurred
under circumstances that it is not likely to recur
and does not cast doubts on the individual’s
good judgment.
Financial problems were largely beyond the
person’s control (loss of employment, economic
downturn, divorce, separation, medical
expenses, etc.) and the individual acted
responsibly under the circumstances.
Person is receiving professional help, and there
are clear indications the financial problem is
being resolved or is under control.
Individual made a good-faith effort to repay the
debt.
There is documentation and a reasonable basis
to dispute the past due debt and evidence of
actions to resolve the issue.
A scheduled program of systematic debt repay
is established (debt-consolidation program, court
supervised payment program, etc.,).
•
•
•
•
•
KEY: Take Responsibility! Adjust Spending!
Act to resolve!
May be able to pay less than the full balance.
UNCLASSIFIED
12
Factors that Could Affect an Individual’s Continued
Eligibility to Classified Information and FOUO Level
DOD Computer Access
•
AR 380-67, para 9-103 states,
“Individuals having access to
classified information must report
promptly to their security office… any
information of the type referred to in
appendix I (Adjudicative Guidelines).”
•
A challenge facing Civilian Employees
before the Furlough has been
financial issues, and the furlough is
expected to increase the challenges
some individuals are facing.
This slide courtesy of Security Office of
Tank and Automotive Command (TACOM)
G2, TACOM LCMC has compiled the
following informal list of financial challenges
that could affect an individual’s access:
• Recurring history of failing to pay one’s
debts when due.
• 90 - 120+ days over due for a minimum
payment.
• Charge-offs, repossessions, suspension of
credit cards or accounts.
• Failure to pay court directed
settlements/judgments.
• Short sale/Foreclosure.
• CH 11, 13, or 7 Bankruptcy.
• Failure to file/pay taxes or tax lien.
• Total overdue debt is more than $10K.
If you are experiencing any of the financial challenges listed on this chart, you need to
self-report to your supporting Security Office for assistance.
UNCLASSIFIED
13
www. annual credit report.com
All 3 at once; and / or
start a 4-month rotation
Personal Financial Management References
Reference for basic
personal financial
management (PFM) such
as goal setting, saving,
budgeting and
handling credit
Money
Management
Reference for reducing personal debt and
dealing professionally with creditors and lenders
Out of Hock & Out of Debt
Collaborating with your Creditors
some thoughts
Secured Creditor: a creditor that has a security interest and can by
contract either take back an item or turn off a service.
Examples:
• Mortgage lender – repossesses the home
• Car loan lender – repossesses the car
• Utility – turns off the service
• Doctor – denies future services
• Federally subsidized student loan – Dept of Ed garnishes IRS refunds
Unsecured Creditor: makes a loan without a security interest
Examples: credit cards or personal loans
Note: an unsecured creditor will go “ugly early” because they are
unsecured and know that they need a court judgment in order to recover
their money.
 Both types of creditors can make notations on your credit report!
 As you decide “who makes it into the lifeboat,”
consider your secured creditors first (there can be exceptions)
Collaborating with your Creditors
some thoughts (continued)
What’s in it for the creditor to cooperate?
 Their bottom line is money
 It is cheaper for them to retain a customer
than to find a new customer
 The primary lender of credit may be flexible
(debt collectors may not be as flexible)
 You have been a loyal customer and hope to continue to
do business with them in the future.
 The accommodation will be a short term fix only through
the furlough.
 “You are a patriotic Federal employee and you need their
help also to assist our government through this fiscal crisis”
 “You cannot pay money your employer isn’t paying you”
Dahlstrom’s Out of Hock and Out of Debt
Pages 28 and 29
Contact your creditors early to get accommodations due to
reduced pay – first by phone and then in writing …
• Reduced monthly amounts
• Reduced Annual Percentage Rates
• Interest Only Payments
• Proof of furlough needed?
• Point of Contact
• Time period of the agreement
• Impact on Credit Report, if any
Your on-post Financial Institution
www.riafcu.com
(563) 355-3800
•
•
•
•
Consult with a personal representative
Learning about Saving Strategies
Learn about low interest products
Consult with financial coaches on impacts
of dealing with creditors
Consult with your
financial institution(s) and
creditor(s) early if you
foresee a problem!
Personal Financial Management Web $ites
My Army One Source at www.myarmyonesource.com
> (1) Family Programs and Services (on the upper left)
> (2) Family programs
> (3) Financial Readiness
1
3
2
Personal Financial Management Web $ites
http://www.powerpay.org
PowerPay from Utah State Extension Service &
Utah State University
Personal Financial Management Web $ites
www.feedthepig.org
Ways to Save!
www.consumer.ftc.gov/articles
/0163-66-ways-save-money
66 Ways to Save Money!
Personal Financial Management Web $ites
http://www.feea.org
Scholarships for
Federal Employees
and Family Members
Application
for Assistance
Personal Financial Management
Installation Resources
1. First Line Supervisor, your Supervisory Chain, and your personnel office
2. Civilian Personnel Advisory Center (CPAC RIA)
Furlough Hotline – (309) 782-1742; https://ncweb.ria.army.mil/riacpac/
3. Security Office to alert them of credit report & security clearance issues –
(309) 782-6611
4. “Ask the Garrison Manager” via Garrison Public Affairs Officer (PAO):
Eric Cramer, (309) 782-7746, eric.w.cramer2.civ@mail.mil
5. Army Community Service (ACS) – (309) 782-0829 / -0815
6. Employee Assistance Program (EAP) – (309) 782-4357 (2-HELP)
7. Chaplain’s Office (Army Sustainment Command) – (309) 782-0910
8. On-post Financial Institution = RIA Federal Credit Union www.riafcu.com
General Number: (563) 355-3800; RIA Branch Manager: ext 1000
Personal Financial Management
Community Resources
United Way of the Quad Cities
Information and Referral Service “2 – 1 – 1”
http://unitedwayqc.org/our-work/2-1-1
Financial Tips for
“Weathering the Furlough”
• When battling the budget, you have three options:
• (1) decrease expenses;
• (2) increase income; or
• (3) do both.
• Encourage your team and family to contribute to solutions.
• The Personal Financial Management (PFM) goal does not change:
spend less than you make!
• Consider what you’ll save
• Trim the fat from your budget
• Wipe out unnecessary expenses
• Cut back on food costs
• Contact your financial institution and creditors to ask for an accommodation
• Dip into savings cautiously
• Apply for loans if necessary
• Make extra money * Adjust W-4 Withholding
• Military Saves and Ready Army Informational Campaigns
• Theodore Roosevelt had this advice:
“Do what you can, with what you have, where you are.”
Desire more take home pay?
Desire an instant pay raise?
Get too much money in your tax refunds?
Are you starving for 51 weeks and then get money dumped on you, and
then go back to starving?
Adjust your W-4 Withholdings for Federal and State taxes!
http://www.irs.gov/Individuals/IRSWithholding-Calculator
Why give the revenue services an interest free loan?
Put the money in your bi-weekly paycheck $$!
Personal Financial Management
a Call to Action
Can your current savings carry you
through the furlough and reduced pay?
Can you cut enough expenses to stay
within the budget?
Through end of September?
(through ____?)
• Actions you, your family and your co-workers may take
now to prepare.
• Commit to short and long term goals.
• Resources available to meet your goals.