Saving today for tomorrow

13 Jul 2006 | Cpl. Evan M. Eagan

Marines and Sailors who have deployed know how fast their money can add up while overseas. Earning extra pay on deployment is a perk many enjoy, however, what to do with that money after returning home is a problem for those who are less experienced with handling money.

Many Marines and Sailors are returning home from Iraq and Afghanistan with more money than they’ve ever had at one time. Due to lack of knowledge and poor fiscal discipline, bad investments are made.

“Most service members avoid doing the one thing that can make a positive impact on not only their current, but their future financial success: budgeting,” said Jany Wasdin, the Combat Center Personal Financial Management Counselor. “When I say the budget word, most of them look at me like I have grown a horn out of my head.”

Ray Caldwell from the Navy-Marine Corps Relief Society says entitlements service members earn while deployed can give them the illusion that they can afford a more expensive lifestyle.

“You have to stay within your means,” he said.

“Don’t count on living on entitlements. Don’t create debt on a surplus. Marines who know they are going to have a surplus of money need to have a plan in place before they deploy,” said Caldwell. “The military has some excellent programs to help them.”

One program offered is the Financial Management Program, which implements and monitors comprehensive personal financial management education, training and counseling programs, said Wasdin.

“These programs emphasize personal financial responsibility and accountability through the basic principles and practices of sound money management, specialized counseling, consumer education and information and referral. This program is a starting point for service members and their families to acquire financial management skills and consumer knowledge.”

Wasdin recommends to any returning Marine or Sailor who has accrued a substantial savings to put the money to work for them.

“One of the positive steps that every Marine and Sailor should be currently doing is participating in the Thrift Savings Plan,” she said. “It is an excellent opportunity for them to get started in the investment world.”

The Thrift Savings Plan is a retirement benefit offered to service members and is similar to a 401(k) offered by many private sector employees. The purpose of the TSP is to offer the service member the opportunity to participate in a long-term savings and investment plan.

Advantages of saving through TSP include: before-tax contributions and tax-deferred investment earnings, automatic payroll withdrawal, choice of investment options including lifecycle funds and a variety of withdrawal options.

“Saving today, for tomorrow, is not only smart, but it is a necessity,” said Wasdin. “Right now, if a person were to retire they are looking at Social Security to cover approximately 23 percent of their basic living expenses — rent, food, and utilities. If they have spent 20 years in the military they will have the military pension that will cover approximately another 20 percent. This leaves approximately 57 percent of your basic living expenses uncovered. Young people need to understand that their spending habits now directly impact their retirement. Instant gratification vice long-term satisfaction seems to be the trend among young service members today.”

Before you let your money burn a hole in your pocket, learn how to set yourself up for success later on.
Headquarters Marine Corps