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 NEWS
 Servicemembers can weather financial storm By Samantha L. Quigley
                American Forces Press Service
 CHICAGO - Servicemembers and their families can weather the "perfect storm" of credit, savings and banking crises; bailouts; market instability; and foreclosures, if they stay financially prepared, the Pentagon's personal finance director said here recently. Dave Julian urged those attending the Defense Department Joint Family Readiness Conference here earlier this month to save more than the average American. "Back before [the recession], the average American spent $1.22 for every dollar they made," Julian said. "If you put that in real dollars, you make $30,000 a year, you're spending close to $37,000. "The bottom line is, that's the average American and we can't have our servicemembers and families ... afford to be average," he added. "Their work is far too important. They mean too much to us to let them fall into those kinds of traps that are out there that snare most Americans." A recent report published in the American Psychological Association said money is a "top source of stress for adults," he said. Many people don't understand how credit affects their lives, and lead to unhealthy coping behaviors, a loss of sleep, strained personal and professional relationships and other long- and short-term health effects, Julian said. Studies also have linked financial stress as a factor in suicides, he said. "The Army did say in 2006, [in] 11 percent of the suicides they had, finances were a known stressor," Julian said. Being financially ready, which includes having good credit, can save a person at least $250,000 in interest over the course of a lifetime, Julian said. While that kind of savings should be a good incentive, servicemembers have a greater motivator: mission readiness. Financial readiness begets mission readiness, Julian said. If a servicemember has bad credit or a bankruptcy or glaring signs of financial unpreparedness, they also jeopardize any security clearance they may have and, consequently, mission readiness. Servicemembers aren't immune to economic trends, but unlike much of the general population, servicemembers have some resources and protections, Julian said. "If you take a look at what we provide or what servicemembers and their families have access to, it really can help them avoid some of those pitfalls that are out there," he added. "We have counselors in our family readiness center ... we have command financial specialists embedded in the units. "We've got online resources like Military OneSource ... if they don't feel comfortable walking into the family center or they don't live near a base," he said. Other resources include Military Saves, Military Homefront's "Personal Financial Readiness" section. The department also works with other financial readiness partners like In Charge Institute, FINRA Investor Education Program, the Better Business Bureau Military Line and the Federal Trade Commission, among others. Through these resources, servicemembers can learn how to start down the road to financial success and what tools are available to help them along the way. The Thrift Savings Plan is one of those tools. It's the government's 401k-style plan, which allows pre-tax contributions up $16,500 and a combat zone tax exclusion up to $49,000, including bonuses and combat pay this year. Any tax-exempt contributions made to Thrift Savings Plan accounts are not taxable, even after withdrawal, Julian said. The Family Smoking Prevention and Tobacco Control Act, signed into law June 22, beefed up TSP, adding a Roth 401k contribution option, auto enrollment for civilian employees, survivor benefits for TSP accounts and a mutual fund investment option. Another savings option for servicemembers is the Savings Deposit Program. It's available to those serving in a designated combat zone. The account guarantees an automatic 10 percent return up to 10,000, but the interest is taxable. Servicemembers also are able to take advantage of some protections against a bad economy, Julian said. These include the Nelson-Talent Amendment, part of the Defense Reauthorization Bill of 2007, which caps interest rates for all loans to servicemembers and their dependents at 36 percent. It was an attempt to curb the practice of payday lenders targeting military personnel. A 2008 report to Congress said the amendment was having the desired effect, Julian said. Military Sentinel is another way servicemembers can protect their financial security. It's a partnership between the Defense Department and the Federal Trade Commission where servicemembers can report scams and register complaints. The site is accessible to more than 500 law enforcement agencies and judge advocate generals, Julian said. Like civilians, servicemembers also can "freeze" their credit by calling one of the three consumer credit agencies. It's good for at least a year unless the decision is reversed, and unlike civilians, it doesn't cost military members anything. "[This] means that no one else while you're ... on active duty ... can open up or take out any lines of credit in your name without your permission or the person you designated to be your agent," Julian said. "Your identity cannot be stolen if this [is in effect]. "Ten million people a year get their identities stolen, and a lot of people are preying on military now," he added. Servicemembers also may be protected from eviction while on active duty under the Servicemembers Civil Relief Act, which was expanded in 2003. It also provides a servicemember who receives permanent change of station orders or who is deployed to a new location for 90 days or more the right to terminate a housing lease. The American Recovery and Reinvestment Act of 2009 expanded the Homeowners Assistance Program to include wounded warriors and surviving spouses. It also could help some affected by Base Realignment and Closure 05, and those facing a permanent change of station that have been affected by the mortgage crisis. With all the resources and opportunities available to them, the bottom line is any servicemember can achieve or maintain a state of financial readiness, Julian said. "Our families are very proud," he said. "They like to pick themselves up by their bootstraps, but hopefully I got them at least aware that, 'Hey, there are resources out there. I can reach out.'"
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