General Money Management & Personal Savings and Investments Elements 45 & 46 Pgs. 211-214

General Money Management Element 45 Pg. 211

Purpose To inform the Transferring Service Member (TSM) of some general money management techniques that may assist them in preparing financially for their transition

Standards It’s a good rule to have at least 3-6 months of living expenses in the event of emergencies TSM needs to understand that they may not be able to find employment immediately after separation or retiring Want to encourage TSM to start working towards saving just $500 since it’s a more realistic goal

Budgeting Budgets are compilations of personal financial data designed to communicate information of monetary matters, or in simple terms, a tool for reaching financial goals Used to indicate the financial condition of an individual or family One tool is a spending plan which is a compilation of personal financial data Two of the most useful budget statements are the balance sheet and the cash flow statement

Balance sheet (Net worth statement) An individual’s or family’s financial condition on a specified date by showing assets, liabilities, and net worth Provides a current status report and includes information on what is owned (assets), what is owed (liabilities), and what the net result would be if all debts were paid off

Cash flow (Income and expense statement list) Summarizes income and expense transactions that have taken place over a specified period of time Tells an individual where money came from and where it went

Debt Management A systematic way to help individuals if they are in debt become debt-free Involves spreading the repayments over a period of time and stopping creditors from taking legal action Based on income and expenditure Not for individuals who get into unmanageable debt, but because of unavoidable reasons like removal from a job, relocation or separation

Debt Management Cont. To remove the debts, individuals are also required to put forth efforts by sticking to a budget, refraining from over spending and stopping the use of credit cards Debt management programs offered through FFSC’s have been designed and equipped to help individuals make debt repayments in a suitable manner These programs are not always accessible after transition so encourage your Sailors to take care of their finances early before transferring

Resources Fleet and Family Support Center Financial Specialist within your command Military One Source https://www.militaryonesource.mil/ Credit Report Information https://www.annualcreditreport.com/index.action Debt Relief Help for Military Service Members https://www.incharge.org/military-money/

Resources Better Business Bureau Financial Management https://www.bbbmarketplacetrust.org/category/291048/military-and- veterans **This one is different than the book** Financial Management https://www.mint.com/ Save and Invest for the military https://www.saveandinvest.org/military Navy Marine Corps Relief Society https://nmcrs.org/ VA Debt Management Center https://www.va.gov/debtman/

Personal Savings & Investment Element 46 Pg. 213

Purpose To make the Transferring Service Member (TSM) aware of the importance and options available for savings and investments

Standard When preparing for transition, it is important to not just focus on budgeting and debt reduction, but also to look at savings and investments as ways to prepare financially for the future

Savings Banks and Credit Unions offer savings accounts designed to help individuals reach short and long term financial goals When opening a savings account, individuals need to look for FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Association) insured savings accounts that offer competitive interest rates on low account balances It’s important to check withdrawal and deposit guidelines Some institutions limit the amount of free transactions available to the member Do not provide a lot of interest earnings Designed to put money into an account for withdrawal when needed

Investments Bonds Certificate of Deposit (CD) Most inexpensive type Companies, cities, states, and even governments sell bonds to help raise money to run their particular institution Certificate of Deposit (CD) Savings certificate that entitles the holder to the receipt of interest Are issued by commercial banks, savings and loans It’s the banks way of “making money”

Investments Cont. Stocks Mutual Funds When you buy a stock, you as the purchaser become a part owner in the company They are high risk Mutual Funds Pools money together from a group of small investors and then its manager buys stock, bonds and other securities with it When contributing money to a fund, the contributor gets a stake in all its investments

Resources Financial Specialist at the command or Fleet and Family Support Center https://www.saveandinvest.org/military https://www.incharge.org/ *in your books it’s militarymoney.com* https://www.stashinvest.com/ Navy Marine Corps Relief Society https://nmcrs.org/ Veterans of Foreign Wars https://www.vfw.org/assistance