Air Force Aid, Army Community Service, and
the Fleet and Family Support Centers are all Resources
to help members of the military and their family deal with
financial emergencies. Those who are deployed and those
to be deployed, as well as those serving stateside or
about to leave the armed services out of financial
consider the benefits of these programs.
"More importantly it can also help you get a fresh start
financially" says Chad D Nelson who manages the Personal
Financial Management Program and serves as an Air Force
Aid Society Officer at the Aviano Family Support Center in
Italy, Mr. Nelson, who is also an ICFE certified credit
report reviewer insists that "there is a better way to get
hand, and it's right at the end of your sleeve. It is
He believes many financial problems experienced,
especially by military personnel can be avoided by simply
ahead. "By curtailing spending on wants and wishes and by
socking away a set percentage in the Thrift Savings Plan
(TSP), for example, which is a painless "pay yourself
first" methodology that makes saving for members easiest,
retirement is possible for everyone. The maximum
contribution is nine percent of basic pay in 2004, ten
percent in 2005
and in 2006 the TSP contribution limits are eliminated all
together. By 2006, military members and GS employees can
away up to $15,000 per year according to IRS limitations.
This is tax deferred income to be used when we no longer
employment and will wish to use our retirement for the
good things in life.
"Putting away a percentage of your earnings every month to
meet future emergencies and expenses makes good sense;
however, very few of us do this today because of a wide
and easy availability of credit. This practice of spending
and saving nothing can prove very dangerous anytime an
emergency situation arises," he advises.
Mr. Nelson explains to clients who come in for guidance
under the Personal Financial Management Program (PFMP)
the existence of a three to six month reserve fund sitting
in a savings account is important. The key to this
worth building exercise is financial self-discipline which
people like Mr. Nelson can help their fellow service
develop. They can help establish a plan for both spending
and savings and provide some motivation too, so folks will
stick to it.
Mr. Nelson teaches his clients that financial success is
not based on how many dollars one brings home, but rather
is done with those dollars once they get them there.
Mostly, the main ingredient for growing your finances is
sense. Simplicity does lead to financial stability. This
begins with being able to determine the difference between
and wants. Taking care of the needs now and setting aside
the wants for later is what he tells his clients. "This is
easy thing to do in today's "I want it now" mentality. The
bottom line is until more income is made or fewer expenses
managed, the lifestyle of "buying it all now" needs to be
put on the back burner until our lifestyle can be
"Many Air Force Aid Society (AFAS) clients are E-3s" said
Mr. Nelson who recently counseled an Airman and spouse
who came in for guidance and brought with them their
current leave and earnings statement and other expense
documentation to justify assistance. Each expense is
reviewed along the member's budget and current living
need for requesting financial assistance must be
explained, Mr. Nelson tells the ICFE. The following is a
"The car I was driving was costing so much in repairs that
I bought a new 2004 car."
"The new car costs in excess of $26,000 and leaves me with
a monthly payment of $340."
"The insurance on my old car was costing me $90 a month,
but insurance on my new car requires full-coverage,
the monthly bill to $210."
"My wife had a job, but had to quit because....... "
"We bought a room full of furniture for our apartment so
we would have a nice place to relax when not at work.
order to pay off previous expenses, I took advance pay and
ended up spending it on some other things rather than
for existing debts. We were getting so far behind with our
charge card account payments that we took out a "bill
consolidation" loan from one of the easy on-line financial
"By now you might be thinking that no one does things like
that," said Mr. Nelson. "But I'm afraid they do. We see
applications every week that follow the same scenarios you
just read," he continued.
"First, the individual assumes that by needing a new car,
the newest model is needed, failing to realize that a two
three-year old vehicle will meet their needs just as well
as a new model will. Second, they got credit from the car
dealership, whose main business is selling cars, instead
of going to a financial institution whose main business is
carrying-out financial matters.
"Next, that $340 monthly car payment would have paid for a
lot of repairs, especially when added to the increase in
insurance premiums. Now you're beginning to see that this
Airman is adding to his own financial problems by not
common sense and by not doing his research before making a
decision," Mr. Nelson pointed out. "Further, the comment
about 'my wife's income is no longer available' meant they
depended on that second income to meet payments for wants
instead of using it to meet needs. By fulfilling their
wants in this way means they created a financial disaster
themselves when that income or ability to generate income
was lost," he added.
It appears that too many young married people have the
idea that "when I lived at home, we had ..." and they
meet those same standards, almost overnight. What is being
missed here is that when they were at home, they were
with parents who had a few years to obtain those
"niceties" now being enjoyed. Now that they are on their
want to obtain those same standards immediately.
PFMP Manager Mr. Nelson teaches them to plan, research,
comparison shop, then save and buy. Those dollars spent on
interest, just to have something new now, does not buy
anything more than financial instability and uncertainty,
brings fleeting happiness...until the bills arrive.
Consider this: A $120 pair of sneakers on sale charged on
a $1000 credit card balance at 18% APR with the minimum
charge of $20 being paid monthly will actually cost $240
by the time the card is paid off. Amazed? Don't be. This
generated the funds to build most of the skyscrapers on
almost every street corner in America. It is the American
the "Rich get Richer, and the poor live a little
Taking advance pay or taking out a bill consolidation loan
are Resources available which may help - but only after
at what the consequences are when the time comes to make
those new payments. Sometimes the short-term solution to a
financial problem leads to long term privation and
hardship without first focusing on the reasons behind the
lifestyle and behavior. Stop to think - "What will this
cause me to do tomorrow?" - before signing that contract
The family support center has continuing programs designed
to help service members learn more about finances. Take
advantage of this opportunity before getting into
financial difficulty; not after.
The programs available include:
1) One to One financial management counseling for debt
resolution, budgeting for expenditures, cash
fund establishment, savings, investments and the
importance of retirement funds for military or civilian
2) "Getting Out of Debt" classes are available and are
offered on a monthly basis
3) "First Time Investors" classes acquaint the newer
members of the military to ideals of how to make more
tools that generate interest, dividends or simple profit
4) "Personal Financial Refresher" courses that address
officers and enlisted that are new to Aviano AB, IT, USAFE.
This is a
mandatory class that helps to avoid spending and debt
problems that currently occur at record number
The objective is to have you learn how to manage your
finances, not let your finances manage you.
To determine how good of a spender you are, try the
interactive Spender's Quiz and Overspenders
Quiz on the ICFE's web site: (www.financial-education-icfe.org)
For more information about these and other services
contact the CFS about the PFMP at your installation.
To contact PFMS Chad Nelson:
Chad D Nelson
Personal Financial Management Program
Air Force Aid Society Officer
Aviano Family Support Center
The ICFE, an official partner with the DOD's Financial
For more information, please contact:
Paul S. Richard
Institute of Consumer Financial Education
PO Box 34070
San Diego, CA 92163
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.