Department of Defense stresses cutting debt, saving more in military saves week

25 Feb 2014 | Terri Moon Cronk

Defense Department leaders believe personal financial readiness equals mission readiness. Coinciding with this, officials want service members to "set a goal, make a plan and save automatically" in the Military Saves Week campaign that started Feb. 24, 2014, a senior Pentagon official said.

Military Saves is a year-long campaign with DOD partner the Consumer Federation of America as part of the larger America Saves effort, said Barbara Thompson, director of the Defense Department's office of family policy and children and youth.

"DOD over last 10 years has had a very robust financial readiness campaign," Thompson said of the total-force program, which began in 2003.

Military Saves encourages service members and their families to take a pledge to reduce debt and set up automatic savings programs for necessities such as retirement, emergency and contingency savings.

"The first step in attaining financial security is making a commitment to changing personal spending and savings habits," Thompson noted.

Financial readiness is equated with mission readiness within DOD, she added, because when a service member has financial difficulty, it can affect job performance.

"DOD feels so strongly about [financial readiness], every major installation and family support center will have personal financial managers to provide counseling and education to service members and their families," Thompson said, adding that installation banks and credit unions also are committed to increasing financial literacy.

Taking a pledge to reduce debt and save money has become a tradition for service members, families and DOD civilians to make a commitment to themselves, Thompson said. The pledge can be taken online or publicly during a major installation event during Military Saves Week.

"Last year, we had over 29,000 [people] take the pledge, and that's exciting," she noted.

Thompson said pledging to save and developing plans to do so are individual. Some people might save a set amount of money each payday, while others devote a percentage, for example.

Thompson also emphasized that developing a financial readiness plan is a family affair, and said the sooner children are introduced to the habit of saving and spending wisely, the earlier they will learn sound financial skills.

"Everyone needs to have financial education," she said.

The traditional Thrift Savings Plan and its Roth IRA TSP counterpart offer painless avenues to automatically save, and the TSP plans are among DOD's pillars of its military family readiness campaign, Thompson said.

"The TSP gives you an opportunity to think about your long-term future ... [such as] retirement, because we think it's far away, but it's not," she said. "Every day, you need to start thinking about saving for retirement."

Offering resources such as TSP shows how serious DOD is about its troops saving and reducing debt for their successes in life, Thompson added.

In the past 10 years, the numbers of service members and their families enrolling in the [traditional] TSP and the new Roth TSP have increased, Thompson said, calling that development "very exciting."

The Military OneSource website is another resource for help with financial planning, offering online financial tools and up to 12 sessions per monetary issue for face-to-face or telephone financial counseling, she said.

About 65 percent of troops and families have emergency savings plans, Thompson said. "That's important. Our message is getting across about how important savings is," she added.

Overall, having a family financial preparedness plan is something service members and their families should have first and foremost on their minds, Thompson emphasized.

"Your financial stability is going to make sure your family is secure, and that you don't have to worry unnecessarily about something you do have control over," she said.

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