Military Saves Julie Kyrazis Assistant Director Military Saves

Military Saves Julie Kyrazis Assistant Director

Military Saves Campaign Overview Origins Relevance Goals Saver Drive/Enrollment Motivational Tools Guard TSP status Do. D Financial Education Responsibilities • Resources • Deployment Savings Opportunities • •

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 Do. D 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 1970 s and 1980 s – 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 14

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! 15

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 17

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 18

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 20

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 21

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 22

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 24

Saver Drive • An organized effort to enroll as many people as possible in Military Saves 25

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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 27

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 29

Military Saves Newsletter 30

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 33

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 34

Colonel • Paying forward what he’s learned • Teaching classes during his deployment to Kuwait • Using common sense principles • Taking the Ph. D-level wording and bringing it to a level a Private First Class can understand 35

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 37

- $78 for a movie for a family of 4 38

Squeeze 5 More Years Out of Your Vehicle - Maybe not 35 years! - Or, weigh the options, do the math, buy a used car 39

Not Necessarily a Good Savings Tip - Cut your own hair 40

Messages

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Where does the Guard stand on TSP?

AF Apr-09 RESERVE PERCENTAGE Grade Participants Percentage 28 57 1117 3828 8096 9157 6714 2431 908 448 587 2242 2260 2562 569 48 18 0 0 0 0 41070 E 1 E 2 E 3 E 4 E 5 E 6 E 7 E 8 E 9 O 1 O 2 O 3 O 4 O 5 O 6 O 7 O 8 O 9 O 10 W 1 W 2 W 3 W 4 W 5 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% 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 E 1 E 2 E 3 E 4 E 5 E 6 E 7 E 8 E 9 O 1 O 2 O 3 O 4 O 5 O 6 O 7 O 8 O 9 O 10 W 1 W 2 W 3 W 4 W 5 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% 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

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!! • •

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 • Do. D Road Shows • Military One. Source

Do. D FMR 7000. 14 -R, V 5, Ch 34 Sept 07 Procedures Governing FIs on Do. D Installations • Encourage and assist duly chartered financial institutions on domestic Do. D 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.

Do. DI 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 55

Resources

Website 57

Facebook

Resource Kit

Downloadable Graphics

Web Ads 61

Request Resource Updates 62

Profile Center 63

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 67

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 my. Pay 68

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 69

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 70

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 71

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 72

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 73

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 74

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 75

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 76

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 One. Source. 77

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 • • 78

Ways to save during deployment • TSP is a Federal Governmentsponsored retirement savings and investment plan • For more detailed information, visit http: //www. tsp. gov 79

Join a community of savers 80

Questions?