Military Saves
Julie Kyrazis
Assistant Director
Military Saves Campaign
Overview
Origins
Relevance
Goals
Saver Drive/Enrollment
Motivational Tools
Guard TSP status
DoD Financial Education
Responsibilities
• Resources
• Deployment Savings Opportunities
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Campaign Origins
Campaign Origins
• Active duty AF Chaplain
• Noticed a common theme in
counseling cases: financial problems
• Started offering financial counseling
in the Chapel
Campaign Origins
“We had this fabulous program and
people were changing their minds
about saving money, but they would
go from the chapel to their offices or
shops or to the flight line and they’d
be encouraged to overspend instead
of being encouraged to build wealth
through saving and debt reduction.”
Campaign Origins
• Discovered America Saves
– Social marketing campaign to persuade
Americans to get out of debt and save
money
• Worked with the America Saves and
Eglin AFB to pilot program
• Left active duty and joined Guard to
spearhead Military Saves full-time
Campaign Origins
• Sponsored by the Consumer
Federation of America
• Part of America Saves Campaign and
DoD Financial Readiness Campaign
• Launched in 2007 throughout all
Services
– 2007: 7,740
– 2008: 22,747
– 2009: 22,989
Overall and this year’s totals
Why do we care about
financial readiness?
Financial Problems
• Stress
– Unhealthy coping behaviors
• Smoking, drinking, overeating
– Sleep deficit—immune problems—
reduced cognitive abilities
– Unhealthy emotions
– Anxiety, frustration, hopelessness,
depression
• Top Ten Reasons People Divorce
• A Top Reason for Suicide
Security Clearance Issues
• CY 07: AFCAF denied/revoked 2722
security clearances – 36% for
financial considerations
• CY 08 thru Oct 31: AFCAF
denied/revoked 2919 security
clearances – 38% for financial
considerations
• Follow “whole person” concept and
look for patterns of irresponsibility
Personal Savings Rate
Not always a nation of over-spenders
• Parts of 1970s and 1980s – 10%
• 2005/2006/2007/2008 – Below 1%
• Currently – Above 4%
Tough times equating to good news for
personal savings rate!
12
Campaign Goals
• Fostering and encouraging military
members to save money
– Positive peer pressure
• Reinforced by units pledging to
become Military Saves units
• Members work with each other to
promote positive financial habits
– Saver drive
• Encouraging military members to
donate a portion of their paycheck
each month to savings and paying
down debt
Detail Chinhae
• 23 members of detail enrolled in
Military Saves
• Most investing in TSP or other
outside investments
• Emphasize financial education and
sign up for personal investment
classes
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Social Marketing Campaign
• Military Saves encourages:
– Have a personal financial plan
– Establishing good credit
– Saving a portion of each paycheck
– Enrolling in SGLI, TSP, and (when
eligible) SDP
– Have an Emergency Savings Fund!
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Marketing
• Marketing works otherwise
companies wouldn’t have huge
advertising budgets
• Debt, consumer debt, and
consumption beyond our means
marketed for decades
• Incredible level of comfort with debt
– Credit card, car loans, etc.
The Secret?
• No magic bullet to change financial
situation
• 4 core principles of personal financial
survival
– Spend less (less than you earn),
save the difference
– Pay off high cost debt, as fast as
possible
– Invest in appreciable assets
– Save for retirement
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Desired Outcomes
• Increased household savings for short- and
long-term needs
• Decreased consumer debt
• Command climate and overall culture that
supports prudent financial behavior over
consumption
• Demand for financial literacy education and
counseling
• Supply of financial products that encourage
saving, especially regular (automatic)
deposits, systematic increase in amount of
deposits, and advance planning for
purchasing and investing
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In a nutshell
Be financially fit!
Annual Saver Drive
• Annual during “Military Saves Week”
– Last Sunday/Feb to first Sunday/Mar
– In conjunction with America Saves Week
• Military Saves Week 2010:
21 February – 28 Feb 2010
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Campaign Method
• Modeled on the Combined Federal
Campaign drive
• Recruiting method is one-on-one
personal contact of all personnel
(military and civilian)
• Supported by visible leadership,
emails, website, public affairs,
partnerships, posters, special events,
fun challenges, and outreach to
family members, contractors, and
the general community
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Military Saves Week/America Saves Week
Use it as a AAA check up:
1. Yearly reminder to Assess your
savings status
2. Act to improve
3. When you act, act Automaticallythrough automatic savings
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Guard
• Needs national, state and key leader
support to succeed
• Just like CFC – if there is not
leadership emphasis, campaign will
fizzle
• Great tool to focus on Financial
Readiness and encourage Guard
members to save
Ongoing Saving/Debt Reduction
Campaign
• Enrollment open 24/7 year-round
• Run a campaign at any time during
the year and focus on:
– 4 Quarterly themes:
• Save & Invest
• Military Youth
• Debt Reduction
• Retirement
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Saver Drive
• An organized effort to enroll as many
people as possible in Military Saves
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Ultimate Goal
• 10% or more of military personnel,
civil servants, and defense contractor
employees worldwide enrolled as
Military Savers - 300,000
• Guard – 450,000 x 10% = 45,000
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What will you give me?
• Financial Security
• Savings Reminders: Receive
electronic newsletters for financial
readiness and savings tips
• Your part: Encourage savers to get
involved in encouraging others to:
– Build wealth. Not Debt.
• Everyone wins!!!
America Saves E-Wealth Coach
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Military Saves Newsletter
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What tools motivate people
to change their behavior?
Success Stories
Sailor
• Divorced single mom with lots of
debt
• Self-educated
• Went on a financial diet and used
cash for everything
• When out of debt, put all bonus and
extra money into savings and TSP
• Owns own home, puts 20% into TSP,
has college savings for children
• Still drives her 95 Toyota Camry
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Airman
• Came to the service with lots of debt
• Took advantage of educational
resources available
• Used money from TDYs and
deployments to pay off her bills
• Has all the things Military Saves
advocates:
– A Good Basic Need Budgeting Plan
– Money Market Emergency Fund
– Roth IRA
– TSP
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Colonel
• Paying forward what he’s learned
• Teaching classes during his
deployment to Kuwait
• Using common sense principles
• Taking the PhD-level wording and
bringing it to a level a Private First
Class can understand
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Savings Tips
Tips from Savers
• Put away money monthly into a
vacation and a Christmas fund – start
small and increase with salary raises
• Avoid the temptation to shop
impulsively—stop reading fashion
magazines and catalogs
• Buy the new washable utility uniforms
and save money on dry cleaning
• Shop at the commissary
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- $78 for a movie
for a family of 4
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Squeeze 5 More Years Out of
Your Vehicle
- Maybe not 35 years!
- Or, weigh the options, do
the math, buy a used car
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Not Necessarily a Good
Savings Tip
- Cut your own hair
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Messages
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Where does the Guard stand
on TSP?
AF
Apr-09
RESERVE PERCENTAGE
Grade
E1
E2
E3
E4
E5
E6
E7
E8
E9
O1
O2
O3
O4
O5
O6
O7
O8
O9
O10
W1
W2
W3
W4
W5
Participants Percentage
28
57
1117
3828
8096
9157
6714
2431
908
448
587
2242
2260
2562
569
48
18
0
0
0
0
0
0
0
41070
Total Officer %:
Total Enlisted %:
2.0%
7.1%
8.2%
16.4%
23.6%
29.9%
31.5%
35.8%
35.6%
15.4%
39.6%
33.8%
28.4%
31.4%
30.2%
31.0%
27.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29.9%
24.0%
TSP
Air Guard Participation
- Dramatically increases at E-5
- Overall less than 25%
participation in enlisted ranks
ARMY
Apr-09
GUARD
Grade
E1
E2
E3
E4
E5
E6
E7
E8
E9
O1
O2
O3
O4
O5
O6
O7
O8
O9
O10
W1
W2
W3
W4
W5
Total
Officer
%:
Total
Enlisted
%:
Percenta
Participants ge
939
1932
4651
9315
9388
6179
3118
1433
365
689
1681
2103
1330
923
284
53
13
0
0
362
691
440
429
99
46417
3.4%
8.3%
10.6%
9.5%
14.2%
20.3%
23.0%
25.4%
27.1%
16.5%
25.7%
28.2%
29.9%
33.0%
29.5%
35.6%
22.4%
0.0%
0.0%
28.1%
35.0%
37.2%
38.6%
37.5%
28.1%
12.1%
TSP
Army Guard Participation
- Overall around 12% participation in
enlisted ranks
- Dramatically increases at E-6
$1500 per year for 20 years @ 6%
Your Results as a Uniformed Services Participant
Growth of your future
contributions and earnings
$ 57,832
Growth of your existing
account balance
$0
Total estimated TSP account
balance
$ 57,832
$1500 per year for 30 years @ 6%
Your Results as a Uniformed Services Participant
Growth of your future
contributions and earnings
$ 125,733
Growth of your existing
account balance
$0
Total estimated TSP account
balance
$ 125,733
$15,000 per year for 20 years @ 6%
Your Results as a Uniformed Services Participant
Growth of your future
contributions and earnings
$ 578,327
Growth of your existing account
balance
$0
Total estimated TSP account
balance
$ 578,327
$15,000 per year for 30 years @ 6%
Your Results as a Uniformed Services Participant
Growth of your future
contributions and earnings
$ 1,257,332
Growth of your existing account
balance
$0
Total estimated TSP account
balance
$ 1,257,332
The Power of Compound Earnings*
$140,000
$130,232
$120,000
$100,000
$79,241
$80,000
Contri
$60,000
$43,271
$40,000
$60,000
$45,000
$17,898
$30,000
$20,000
$3,098
$15,000
$0
$3,000
1
5
10
Year
15
*The chart assumes a $250 contribution at the end of every month and a 7% rate of return. It is for illustrative
purposes only and is not intended to represent an investment in any specific security.
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Accou
The Power of Compound Earnings*
$180,000
$163,561
$160,000
$140,000
$120,000
$94,576
$100,000
Contributions
$80,000
Account Balance
$48,772
$60,000
$60,000
$40,000
$45,000
$18,927
$30,000
$3,098
$20,000
$15,000
$0
$3,000
1
5
10
Year
15
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*The chart assumes a $250 contribution at the end of every month supplemented by a 3% annual cost of living
allowance and a 7% rate of return. It is for illustrative purposes only and is not intended to represent an
investment in any specific security.
What we are vs. what we aren’t
We don’t provide financial education
We do endorse financial education
We are the bridge
Knowledge is great but doesn’t
necessarily equate to actions
• We are the action piece
• Just save!!
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Where to get financial education
• On base bank and credit union
• FPA Pro Bono
• Military Homefront on-line request
through State/Wing Family Program
Managers
• State/Wing Family Program Manager
receiving Command Financial
Specialist Training—limited
counseling
• DoD Road Shows
• Military OneSource
DoD FMR 7000.14-R, V 5, Ch 34 Sept 07
Procedures Governing FIs on DoD
Installations
• Encourage and assist duly chartered
financial institutions on domestic
DoD installations to provide complete
financial services to include, without
charge, basic financial education and
counseling services.
• Financial education and counseling services
refer to basic personal and family finances
such as budgeting, checkbook balancing and
account reconciliation, benefits of savings,
prudent use of credit, how to start a savings
program, how to shop and apply for credit,
and the consequences of excessive credit.
DoDI 1342.27 12 Nov 04 Personal
Financial Mgmt for Svc Members
• Implements policy, assigns
responsibility, and prescribes procedures
under references for the education and
training of military members in personal
financial management
• Applies to the Office of the Secretary of
Defense, the Military Departments…, the
Army, the Navy, the Air Force, the
Marine Corps, and the Coast Guard …
including their Reserve components.
Memo to Endorse Military Saves
• To enhance financial readiness
• Annual program to encourage,
motivate and educate Service
members and their families
• Year round program with quarterly
themes
• Command initiative to change
financial culture
• Encouraged all commanders and
civilian directors to participate in
Military Saves week 2009
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Resources
Website
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Facebook
Resource Kit
Downloadable Graphics
Web Ads
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Request Resource Updates
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Profile Center
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Military Youth
Military Youth Facebook
Deployment Savings Opportunities
Using deployment financial
opportunities to boost savings
Deployment and savings
• Making a budget
is like deciding
how to divide up
the pie
• Deployment
offers
opportunities to
make the pie
larger
• Having more pie
doesn’t mean
you have to eat
more pie
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Deployment and financial benefits
•
•
Deployment offers
allowances, tax
breaks, incentives
and special pay
The Department of
Defense currently has
70 types of special
pays and allowances,
depending on your
deployment and duty
status, branch of
service, and duty
station on the books
•
Find detailed
information through
your service financial
office or online
through myPay
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What to save during deployment
• Combat zone tax exclusion
• Pay yourself instead of the
government
– As an E-6 with 6 years, you earn
approximately $35,410 per year
– The taxes generally add up to $8,800.00
– Set aside $8,000 in a retirement account
with 2% interest for 10 years
– Saving earns you $1,769.60
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What to save during deployment
– Make extra payments on credit cards,
student loans, car loans or
mortgages.
• A credit card with a $15,000 balance will
never be paid off with the minimum
payment
• With a payment of $500/month, it will take
nearly 3 years and over $2,000 in interest
to pay off
• A lump sum payment of $8,000 towards
this debt saves more than $1,500 in
interest payments
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What to save during deployment
•
Per diem while TDY
–
•
The difference that $5$10/day can make…
–
–
–
•
Minimize spending,
maximize income and
saving
Over a week: $35-$70
Over a month: $140-$240
Over a year: $1820-$3640
VS
Small saving can be the
difference between 1
cup of designer coffee
per day and an HDTV
–
–
Paid in cash
No debt and no interest
payments
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What to save during deployment
• Family Separation
Allowance
– FSA is payable at
$250.00 per month
and accrues from
the day of departure
from the home
station and ends the
day prior to arrival
at the home station,
in addition to any
per diem or other
entitlements
• Use this cash for
taxes, retirement,
credit card and loan
payments, college
savings, home
repairs, etc
•
Also consider using it
for something that
the whole family will
enjoy for years
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What to save during deployment
• Maybe you are
considering a
family vacation
after your
deployment
ends…and nothing
says family like
Mickey Mouse!
• 4 passes for 4 days
in Disney World
cost $1076
• If you pay in cash
with your Family
Separation
Allowance Savings,
you pay $1076
•
If you put this on a
credit card and only
pay the minimum,
you will pay more
than $2,600 over 14
years
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What to save during deployment
•
•
•
•
Live alone?
Going to be gone for
3 months? 6 months?
a year?
Consider renting out
your house or
apartment for extra
cash
Subletting allows you
to cover your housing
costs while you still
collect BAH
• Do you rent?
– This is a great way
to set aside money
for a down payment
for your first home
• Do you own?
– This is a great way
to put money aside
for home
improvements
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Ways to save during deployment
• Create a rainy
day fund
– Cash has its
advantages that
credit and longterm accounts
don’t offer
– Short term
savings can
really save you
from the
unexpected
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Ways to save during deployment
• See you local credit
union or military
bank to learn more
about:
– Basic Savings
Accounts
– Certificates of
Deposit
– College Savings
Accounts
– IRAs and other
retirement accounts
– Investment options
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Ways to save during deployment
• Get sound advice.
•
Online, check out
saveandinvest.org for
Money & Mobility,
information specifically
for military personnel
and their families
•
See a Personal Financial
Manager at you
Installation or arrange a
consultation with a
Certified Financial
Planner through Military
OneSource.
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Ways to save during Deployment
• Saving Deposit
Program (SDP)
– For military
members
deployed in
combat zones,
qualified
hazardous duty
areas, or certain
contingency
operations
– Annual interest
rate of 10%
•
E-6 salary after 6
years=$35,410
•
•
Save 10%=$3,451
After 12 months in SDP
savings = $3,809
Reward for saving =
$358
Save the maximum =
$10,000
After 12 months in SDP,
savings = $11,038
Reward for saving =
$1,038
•
•
•
•
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Ways to save during deployment
• TSP is a Federal
Governmentsponsored
retirement savings
and investment
plan
• For more detailed
information, visit
http://www.tsp.gov
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Join a community of savers
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Questions?