Financial fitness - personal finance tips for those in the military

Airman, August, 2001 by Sgt. Jason Tudor

Can your wallet and budget salute as smartly as you do?

Anyone who serves in the military knows there are a few rules of the road: keep your hair cut, look good in uniform and be a team player. While these require everyday expenses, it helps to budget and be ready for the things that will pop up throughout your bluesuit shelf life.

Unfortunately, there are plenty of airmen who start their Air Force careers "in the hole," finding themselves with a raft of credit card debt or the inability to control spending habits.

Others make frequent trips to pawn off paychecks at an interest rate a loan shark salivates over. Drive up credit card bills to the maximums and pay only the minimums. Write checks for more than their bank will honor.

All of this, said Patty Meers, the personal financial management program manager and an accredited financial planner at Scott Air Force Base, Ill., is a tough way to begin or live life in the Air Force.

"Some of the younger folks just have no earthly idea about budgeting," Meers said. "Finances aren't something people like to talk about unless they have a lot of money. They need to talk about it and take a look at their financial situations."

Getting in shape

So, how can you get your finances to salute as smartly as you do? Meers said start by sitting down and analyzing what you spend and how it's spent each day. For instance, it may be easier to whip out a check or credit card to pay for groceries. However, try forking up 10 $20 bills instead next time you're at the checkout counter.

"There's a greater impact," Meers said, "when you're handing the cashier those twenties. It's really an eye opener."

Other lifelong costs -- dry cleaning, hair cuts, lunches and plaques -- add up as your career grows and flourishes, whether you're a bluesuiter or a civilian. For that reason and many others, it's important to keep a handle on your finances. Creating a budget can be drudge work but vital to your future, according to Paula Gradwell, a family support center counselor at Lackland Air Force Base, Texas.

"Budgeting is not necessarily fun, but it does give us a plan of how to get not only from one paycheck to another, but also further down the road to long-term financial goals," she said.

Gradwell said knowing where all the money goes, from car payments and child support to haircuts, is the key to security.

"Knowing exactly what income to regularly expect, what expenses are fixed [savings, rent] and that an emergency account is available when needed are the first steps to setting up a healthy financial future for you and your family," she said.

No hiding from debt

Meers said that means abating many of the activities you might take for granted. "Don't hide from your financial situation," she said. "Put it on paper. Talk about it. Be very conscious when you're spending your money. Is it something you really need?"

She also said to avoid credit cards at all costs.

To minimize these hazards and help airmen prepare for the future, family support centers throughout the Air Force provide personal financial management as one of their core services. Counselors like Gradwell and Meers offer a variety of workshops, information and more, including home buying guidance, understanding mutual funds, long-term investments, relocation planning and retirement planning.

Additionally, the financial management program offers assistance in budget preparation, debt consolidation and consumer economics. One-on-one counseling to assist Individuals and couples in designing financial plans for their specific needs and goals is also available.

"Some of the goals may be short term [purchase of a new stereo system in the next few months], but many are for a longer term like a new vehicle in three years, or earlier retirement than friends," Gradwell added.

Meers said she's able to get seven of the 10 people she sees started in the right direction. "Everybody has a different financial personality. I try and talk with people, figure out how they were raised financially and go from there."

The cost of doing business

Budgeting and financial responsibility are important during an Air Force career. Why? Well, consider this:

* Unless your hair grows out like bamboo shoots, or you're a Rogaine warrior, you'll probably get it cut twice a month at an average of $6 a visit. So, over 20 years, given inflation, you'll spend about $3,200, give or take a trimming.

* Dry cleaning of uniforms sets most people back about $24 every two weeks. If you do this every week and you're not fortunate enough to get a stipend for it, expect to pay about $12,000 over the life of a career, factoring the occasional spilled beverage or Alfredo sauce accident.

* Although you earn a uniform allowance of about $300 each year, you'll still have out-of-pocket costs through the year, especially living in an easy bake oven like San Antonio, or the frigid cold of Keflavik, Iceland. That said, you'd probably buy an extra set of battle dress uniforms (about $55) and an extra set of blue pants and shirt ($65). With an out-of-pocket expense of about $120 each year, when you're giving that retirement speech, mention that you've spent about $2,400 additional beyond what the Air Force reimburses.