6 Financial Tips for Service Members and Their Families

Monday, June 26 at 09:15 AM
Category: Personal Finance
Finances are often identified by service members and their families as one of their most significant stressors – even more than deployments and personal relationships. Financial concerns at home make it extremely difficult for service members to focus on the mission at hand. Planning ahead as much as possible is key for the millions of military families who face unique financial challenges like deployments and relocations.

These financial tips can help lessen the financial burden on military families:
  • Contribute automatically to a Thrift Savings Plan. Military members have access to the Federal Thrift Savings Program, which offers the lowest-cost retirement savings plan available. Have automatic contributions withdrawn from your paycheck. 
  • Plan for deployment. Before deployment, have a family conversation about managing the household budget. Military personnel also receive additional funds while deployed. Decide on the best use for that extra cash, whether it is paying off debt or increasing Thrift Savings Plan contributions. 
  • Meet with your banker before active duty. The Servicemembers Civil Relief Act offers all military personnel entering active duty a variety of financial protections. The SCRA covers issues ranging from interest rate reductions to limits on debt accrual. Ask your banker about the key provisions of this law and how they can help you.  
  • Set up automatic bill pay. Whether you’re stationed stateside or overseas, automatic bill pay will give you and your family one less thing to worry about each month. It can be particularly helpful during deployments in regions where internet access is unreliable and mobile banking isn’t an option.
  • Consider housing options. With mortgage rates at notably low levels, homeownership may seem like a no-brainer. However, service members should consider their options. Frequent relocations and deployments can make owning a home challenging and expensive. Renting may be a smart option for short-term assignments. Decide what’s best for your family and your finances. 
  • Consult a financial advisor. Schedule a visit at a Personal Financial Management Program (PFMP) office, located in your military and family support centers. They offer free one-on-one counseling, as well as other financial education resources. 
Service members juggle a lot of stresses, and we hope to reduce the financial stresses with these tips.
 
Information courtesy of American Bankers Association. 

Tags: Financial Education, Home Loans, Mortgage, Retirement, Savings
 

Get off to a Great Summer Start

Tuesday, June 20 at 09:30 AM
Category: Personal Finance

There's just something about summer. Maybe it's the longer days, warm temperatures or tasty barbecue treats. Or, maybe it's the break in routine from meeting morning school buses or haggling over evening homework. One thing no one can dispute is summer is a short season, so it's important to make the most of it.

Here are some tips for a great summer start for the kids — and the entire family.

Schedule a trip. Looking to get away from it all this summer? Start planning. Whether you are thinking about a week-long vacation or just day trips throughout the summer, advance planning will ensure you're prepared and all your family members will be available.

Live in the moment. While it's great to plan ahead, spontaneity can also make summer more exciting. Every now and again, take a last-minute day off and surprise your family members with an unexpected trip to the ocean or lake or maybe even an amusement park.

Start an exercise routine. There's no better time of the year to exercise. Schedule some fitness goals for the family and work toward them together. For example, you might plan to run or bike in a race and train together.

Learn something new. Is there some new skill you and your family members would like to learn? Perhaps a new craft, instrument, or even a foreign language? Find a common goal and then arrange to take classes or study together.

Get outside. Instead of staying in and watching television, get outside as much as you can. And if possible, serve your meals outside to soak up even more summer sun.

Take in some culture. There's always something happening in the summer, such as free concerts or movies in the park. Check your local listings to learn about events near you and to see if there are any museums offering discounted or free admission.

Volunteer together. There's nothing quite like the feeling of knowing you are making a difference in someone's life. Try recruiting your family members and volunteering to help a local organization, such as a dog shelter or soup kitchen.

Plan campfires. You don't have to have a trailer or tent to enjoy one of the most enjoyable parts of camping — campfires. With a fire pit, you can bring the relaxation of a campfire right to your back yard. Don't forget to buy some marshmallows, graham crackers, and chocolate and make some s'mores!

Start a family book club. Pick a book the entire family might enjoy and then set up a regular book club meeting where you discuss the book and enjoy special "book club" treats.

Summer is the season to be active. So put these simple ideas into action today to make the most of it.

 

Trim Your Monthly Expenses

Monday, June 19 at 10:20 AM
Category: Personal Finance
It comes as no surprise summer is a great time to get in shape. But, do you realize there's an easy way to get in great shape without having to put on workout clothes or sneakers or even breaking a sweat? It's called getting into financial shape. And you can accomplish that fairly easily by doing one simple activity — trimming your monthly expenses.
 
Here are some suggestions for losing that extra financial baggage this summer:
  • Get rid of higher-interest debt. If you have credit card debt, you may be wasting a significant part of your monthly budget on interest fees. Try to pay off any debt you can or at the very least, to consolidate higher-interest debt to lower-interest credit cards. To avoid credit card debt in the future, pay for purchases in cash.
  • Lower your cellphone bill. Most of us can't live without our cellphones. We can, however, do without those expensive monthly bills, which can be budget busters. Take some time to review your bill to determine your usage and to see if you can move to a less expensive plan. Or if that's not possible, shop around with other carriers.
  • Share the ride. Gasoline and car maintenance can take a big portion out of your budget. One way to reduce your automobile expense is to carpool with others. Or, if you live close to work, consider walking or riding your bike.
  • Dine in. There is a lot to love about dining out. You don't have to worry about what to cook or spend your valuable time cleaning up. But, dining out frequently can be very expensive. By preparing and eating your meals at home, you may be able to save hundreds of dollars each month. Also, if you work outside your home, pack a lunch and be sure to brew your own coffee.
  • Save energy at home. Put some energy into reducing your utility costs by using energy-efficient light bulbs, turning off lights, and conserving water.
  • Reduce your cable bill. Spending too much on cable? Examine your bill and see if you can get rid of premium channels. Or consider, eliminating cable altogether and using subscription services.
  • Get rid of your gym/club memberships. If you belong to a gym and don't get there often, cancel your membership. It's only worth it if you use it.
The best method for determining ways to save is to record and review your monthly expenses. Then, once you cut your expenses, take that extra money and put it in a savings account. In no time at all, you'll see that you look a whole lot better with trimmer expenses. 

Tags: Credit Cards, Debt, Financial Education, Savings
 

Tom Clancy’s Widow Wins Her Court Battle

Wednesday, June 14 at 02:05 PM
Category: Personal Finance
The estate plan of noted author Tom Clancy had three equal trusts, one for the children of his first marriage, a marital trust for his surviving second wife, and a family trust for the second wife and the daughter they had together. The trusts were funded from the residuary estate (whatever is left after paying expenses and any specific bequests), and Clancy’s will also called for estate and/or inheritance taxes to be paid from that same remaining fund. The personal representative of the estate (who also had drafted the will) proposed to pay half of the federal estate taxes due on Clancy’s $83 million estate from the trust for the adult children, the other half from the family trust. The taxes came to roughly $15 million. 

Mrs. Clancy objected. Before his death, Clancy had executed a codicil to his will, to clarify that he intended both the family trust and the marital trust to qualify for the federal estate tax marital deduction. That suggests that the trusts for Mrs. Clancy should not be tapped to pay taxes, because assets that don’t share in the creation of the estate tax burden should not have to pay those estate taxes. To the extent that the widow’s share is used to pay the estate tax, the marital deduction must be reduced, which means still more estate tax, and a further reduction in deduction, and yet more taxes, in an extended circular computation. In fact, if Mrs. Clancy’s share is free from the tax burden, the actual estate tax due will drop by nearly a third, to roughly $11 million. 
 
That’s what the probate court decided was proper, it’s what Clancy apparently intended with his codicil to the will. In a 4-3 decision, the Maryland Court of Appeals agreed with that conclusion in August. A savings clause in the codicil “explicitly directs that the personal representative not act to adversely impact the benefit of the marital deduction of the marital trust and the family trust.” Three dissenters believed that Clancy probably did not appreciate just how much that seemingly minor savings clause would upend the overall result of his estate plan. 
 
The result is decidedly unequal for the five children. The child from the second marriage will get roughly one-third of the estate, undiminished by taxes. The share for the other four will be reduced roughly 40% for taxes, and then split four ways among them. Whether Mr. Clancy expected an outcome for his estate plan to have as many twists and turns as the plots of the books that he wrote remains an open question. 
 
(December 2016) © 2016 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

The Retirement “Tryout”

Tuesday, June 13 at 01:40 PM
Category: Personal Finance
Retirement is sometimes defined in terms of what one is leaving behind — a career, difficult clients, job stress, the daily commute, the grind. But for retirement to be fully satisfying, according to many experts, one needs to retire to something, not just from something. Defining that “to” and giving it a tryout is what we mean by “pretesting” your retirement. Here are some examples. 
 
Donate your time and expertise. An attorney acquaintance of ours spent most of his career as in-house counsel for a major oil company. As he approached his retirement years, he arranged to be allowed to do pro bono legal work for immigrants. He found the experience so rewarding that after he started drawing his oil company pension, he founded a law firm specializing in such pro bono work. 
 
The “soft launch” of a retirement consultancy. Another acquaintance thought his years of experience in the banking business might be valuable in creating a marketing consultancy for financial services firms. Before he retired, this person tried out some of his ideas with the advertising agency that his bank used. Both sides found the experience valuable, and a basis was created for the individual’s new marketing firm. He was able to have a clear financial path to follow once his regular full-time employment ended. 
 
Try a month’s vacation. It would be a shame to retire to a quiet, secluded lifestyle, only to find it boring after a few months. Many retirees report that they miss the camaraderie of their working lives after they retire. Before deciding upon retirement relocation, it can be helpful to spend an extended period of time in the possible new location, to see what day-to-day life would be like there. 
 
As you conduct these tryouts, you should monitor your finances, noting any adjustments that may be required. You may find that your spending needs change or vary from your expectations, and that may influence your choice of a retirement start date. 
 
Testing the water early can head off unpleasant surprises after one enters retirement. By then, many decisions have become irreversible. If you’d like a professional review of your financial readiness for retirement, we’d be pleased to give you our evaluation. 
 
(January 2017) © 2017 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement

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