Sometimes the decisions of the past can come back to haunt us. As we sit here in early 2013, we look back at August 2011 and have to ask, “What were they thinking?” In August 2011, Congress passed the Budget Control Act of 2011 to avoid surpassing the debt-ceiling, the Congressionally mandated limit to how much our country can legally borrow. The threat of exceeding the debt-ceiling threatened to shut down the government and cause harm to our country’s ability to borrow money in the future. As a result of the Budget Control Act of 2011, Congress enacted a sequestration, which essentially means mandated spending cuts across all virtually all government spending, including civilian and military programs, homeland security, health care, the Department of Transportation, education programs, Congressional spending, and more.

The Budget Control Act of 2011 was more or less rushed through Congress at the last hour, with the intent on changing the language before the sequestration took effect. Unfortunately, Congress has not agreed upon new language to the act, and the spending cuts went into effect on March 1st. Unless something changes soon, the military will see many changes. Here are a few changes we expect to see, unless something happens soon.

Military Pay Safe – Some Benefits Will Be Cut

DoD Officials have stated that pay for military members will be exempted from the sequestration cuts enacted on March 1, 2013. Base pay and benefits such as BAH and BAS should remain intact.

However, the military has already stated some non-monetary benefits many service members take advantage of will be impacted. For example, military tuition assistance has already been cut from the Army and Marines. It is likely these changes will also affect all branches of the military. Other programs that may be affected include MWR programs and education programs.

DoD Civilian Pay will be Impacted

DoD civilian pay will be cut in the form of furloughs, virtually across the board. The furloughs will affect approximately 800,000 DoD civilians. To put this in perspective, the US Air Force will furlough approximately 168,000 DoD civilians, to the tune of $1.3 billion in missed pay. Here is an infographic showing the pay cuts, courtesy of AF.mil.

USAF Civilian employees stand to lose $1.4 billion in the sequestration.

According to AF.mil, “Civilians may be furloughed without pay for up to 22 discontinuous (or 30 continuous) days spread over a maximum number of pay periods possible with no more than 16 hours furloughed in pay period. The covered pay periods are from April to September 2013.”

Some reports state the furloughs could cost civilians one day pay per week for the next five months, or until Congress approves a new budget. One day per week would equate to a 20% cut in pay. Each branch of service will be able to approve a limited number of exemptions for high-impact mission related jobs. These will be few and far between.

Many temporary employees and contractors have already been given layoff notices.

Image credits: U.S. Department of Defense Current Photos, AF.mil

Senior leaders in the US Air Force recently addressed the possible affects of operating under the sequestration through the remainder of the fiscal year if the US Government doesn’t make changes to the current rules which recently went into effect.

The sequestration was enacted as part of the 2011 Budget Control Act which mandated federal budget cuts designed to save the government $1.2 trillion over the next 10 years. There are $85 billion in cuts scheduled for FY2013.

According to a memorandum released to all the major commands, Air Force officials stated, “”On 1 March 2013, we expect to absorb over $12 billion in sequestration reductions while we simultaneously work to mitigate an (overseas contingency operations) shortfall of $1.8 billion and operate under a highly restrictive continuing resolution. These events are unprecedented for the department and the USAF.”

The sequestration will cause a 9% decrease in budgetary spending across the board. Which means some programs will be unilaterally cut, while others will be scaled back. The good news is that military pay will remain unaffected. Unfortunately, the services won’t have full control over how to implement those cuts. In some cases, vital programs and jobs will be cut or scaled back.

Civilian DoD jobs will be affected if the government doesn’t act soon.

Civilian jobs will also be affected, as some civilian employees have already received furlough notices. Air Force officials expect approximately 168,000 civilian jobs will be affected by the furloughs.

Operational Impacts

The Air Force will also need to make operational changes. Examples include decreasing flying hours to reduce expenses and maintain operational readiness, decreasing the number and duration of temporary duty assignments, and other cost reduction methods.

The Air Force has also decided to stop aviation support to public events, including ceasing aerial flyovers, air shows, and other aerial displays. Unfortunately, this includes standing down the Thunderbirds aerial demonstration team.

Education and Training will also be impacted. Most scheduled joint training exercises will proceed as planned, but Air Force officials have stated they will reduce scheduled attendance at Q3 professional military education (PME) courses.

In addition to the above changes, there will also be reductions in modernization and construction projects across numerous bases.

Civilian Air Force Jobs to Be Affected

The Air Force just released this infographic showing the effects of sequestration if they have to furlough nearly 180,000 people, and congress does not pass a budget.

USAF Civilian employees stand to lose $1.3 billion in the sequestration.

According to AF.mil, “Civilians may be furloughed without pay for up to 22 discontinuous (or 30 continuous) days spread over a maximum number of pay periods possible with no more than 16 hours furloughed in pay period. The covered pay periods are from April to September 2013. The memo noted that only the Air Force vice chief of staff or other high-level designees can approve limited mission-driven exemptions.”

Infographics courtesy of AF.mil

This past week I had the honor of participating in a Google Hangout with the folks from Veterans United and Jeff Rose, a fellow veteran, financial planner, and author. Jeff writes for the site Good Financial Cents, and his book, Soldier of Finance, is being published this fall.

Jeff Rose, CFP and Army Veteran

In the Google Hangout we discussed Military Saves Week, saving and investing opportunities for military members and veterans, taxes, and much more.

Here is a preview of some of the topics we covered:

• Military Saves Week
• Thrift Savings Plan and the Roth TSP
• How to start investing
• Military taxes
• The Debt Movement
• Why Jeff and I started our blogs
• Jeff’s new book coming out this fall
• Disability compensation benefits
• Where to get help for VA claims
• Our best advice for how military members can start saving
• and much more.

Here is the YouTube video (and there is more detailed information and additional links below the video):

Saving Money on Deployments

Deployments are an interesting time for everyone involved. You live a life without a lot of luxuries, at a time when you are earning more money than you normally earn. The combination of doing without and having money in your pocket when you get home makes it easy for many military members to go on a buying spree when they return. A new truck, motorcycle, stereo system, or similar large expense seems logical at the time, but it can be painful in the long run, especially if you put it on credit.

Were you a saver while you were in the military?

• Jeff: Yes. He was already a financial planner for three years prior to his deployment to Iraq. Jeff shared a story about calling home to buy stock while he was deployed.
• Ryan: Yes, I was a saver. I was single while I was in the military, and I didn’t have many expenses. I deployed five times in six years, and used the money to fully fund my IRAs, invest in the Thrift Savings Program, and invest in the Savings Deposit Program.

Roth Thrift Savings Plan & Investing

Ryan: The Roth TSP is new, but there are a lot of questions about it. Like IRAs, there are two versions, and they are similar to each other. With the Traditional IRA or Traditional TSP, contributions are made before the income has been taxed. The money grows until retirement age, then it is taxed when you make withdrawals. The Roth TSP and Roth IRA are the opposite. The contributions are made after taxes have been withheld, and you can make tax-free withdrawals in retirement age.

There are some huge benefits to investing in the Roth IRA or Roth TSP. For example, you can make Roth TSP contributions while deployed. The benefit of this is you are making an “after tax” contribution with tax free money. Meaning your contributions will NEVER be taxed – either now, or when you make the withdrawals in retirement age. The other benefit concerns tax brackets. If you are in a lower tax bracket now, the Roth is generally the better way to go. This is because yo will pay a low tax rate now, and avoid taxes later. This is important because we don’t know what tax rates will be when we reach retirement age. Chances are good that taxes will be higher in the future.

Jeff: Jeff gives examples of how turning a $30,000 investment into a $250,000 nest egg that is tax free. It’s an amazing possibility. But it takes the discipline to get started.

Jeff also shared that you don’t need much money do you need to start investing. You can do it with $25 or $50 a month. The key is to make the commitment and get started.

Military Taxes

We covered a few topics for military taxes, including the tax deadlines. It’s important to know that April 15th is the deadline to file and pay anything you may owe to the government. However, you can file an extension which will allow you to file by Oct. 15th, which is the extension deadline. Money due by April 15th, regardless of whether you file an extension.

Military extensions: Military members who ares stationed overseas or deployed are eligible for an automatic extension. However, the IRS may not know you are overseas or deployed, so be sure to file an extension. This is free and easy to do – you can do it with tax software, or by filling out a simple from from the IRS. Here are tips for filing a tax extension.

More tax tips:

• How military members can file taxes free
• TurboTax Military Edition Review

Thanks so much to Veterans United for inviting Jeff and I to their Google Hangout

Many Americans struggle with their finances, and military members are no exception. The difference, however, is compounded by the lifestyle required of military members. It’s not uncommon, for example, for military families to move every few years, or for the servicemember to deploy away from his or her family for months at a time. These conditions can make it difficult on family members, particularly for military spouses who may have a more difficult time advancing in their career or finding work with frequent moves.

Military Saves Week supports good financial health!

This is why Military Saves Week is beneficial for military members and their families. This program highlights the need for military members and their families to create a savings plan and reach their financial goals.

What is Military Saves Week? Military Saves Week is a joint program between the DoD and AmericaSaves.org. The program is designed to help bring awareness to good financial habits, saving, and investing. You can learn more at MilitarySaves.org, or learn more about a similar initiative called American Saves Week.

Military Saves Week

Here are some of the major points highlighted during Military Saves Week:

Save for Emergencies. Creating an emergency fund is one of the most important things you can do from a financial perspective. The idea is to save until you have at least $1,000 saved in an account where you can access the funds in an emergency. $1,000 is a recommended starting point because it is large enough to help pay for most medium size emergencies, such as replacing an appliance, paying a car insurance deductible or for minor car repairs, a flight home for a family emergency, etc. Having these funds available can help you avoid using a credit card or taking out a high interest loan and digging yourself further into debt.

Pay Off High-Interest Debt. Once you have your emergency fund in place, it’s a good idea to start working on eliminating any high-interest debt you may have. For example, you want to pay off any credit cards or other loans with high interest rates. Paying off your debt does two things: increases your cash flow and gives you an automatic return on your investment. With more cash flow each month, you can pay off the rest of your debt more quickly, or get started on the next step: saving.

Save Automatically. It’s great to have a savings plan at all times. But it may not be a good idea to ramp it into overdrive until you pay off your high-interest debt. This is because any debt you pay off gives you an automatic return on your investment. With current interest rates so low, it makes sense to use as much of your cash flow as possible to repay debt. But once your debt is gone, it’s a good idea to ramp up your savings. There are a couple ways you can do this. The easiest way is to make it automatic.

Save for Retirement. You can save for retirement while you are saving for other goals. The key is to find a balance. A great way to get started is to save a portion of your paycheck in your Thrift Savings Plan, or in a 401k or other employer sponsored retirement plan. Opening a Traditional or Roth IRA is another good idea, as both of these offer excellent long term tax benefits.

Save for a Large Purchase. Banks are incredibly kind. They are often happy to let you make a major purchase with no money down. Isn’t that wonderful of them? Don’t fall for it! Making a large purchase with no money down does two things: increases the amount of money you have to borrow, and increases the amount of interest you pay over the life of your loan. It’s always best to pay cash when possible, or at least make a large down-payment. It’s also a good idea to keep the loan terms as short as possible. In other words, don’t go for a 7 year car loan. Buy a less expensive car if you can’t afford a shorter term.

Home buyers often have the choice of a 15 or 30 year mortgage. Buying a home with a 15 year mortgage is often a good idea if you can afford the monthly payments, but a 30 year mortgage may give you more long-term flexibility. Go with the one that best fits your budget, but always try to make a down-payment if you can. This will help reduce your payments and the amount of interest you pay over the course of your loan. Final note about home loans: you can buy a home with no money down when you use a VA Loan. This isn’t usually recommended since it increases the amount of money you are borrowing. Always try to make a down-payment when possible.

Take some time, create a plan, take action

Everyone has a unique personal and financial situation. Because of this, there is no one-size-fits-all savings plan. It’s up to you to examine your situation and create a plan that works. But there is help available. Almost every base has someone who can help you look at your budget and find areas where you can cut back on your expenses so you can funnel that money toward savings or paying off debt. If you are no longer in the service, you can visit a fee-only financial planner or a non-profit debt-management organization to come up with a solution to help you reach your financial goals. The key is recognizing that you need a plan, and then taking action.

Here are some more resources about Military Saves Week:

• Personal Financial Tips for Military Families During ‘Military Saves Week’.
• Military Saves.org – Tips for Savers
• Consumer Financial Protection Bureau – Servicemembers page

An ROTC member recently contacted me and asked for some financial tips on how to get the most out of his time in the service. There are literally hundreds of financial benefits to joining the military. But this topic is so broad that it could take a book to cover everything, especially for a new recruit who isn’t familiar with many of the military benefits which will be available once he joins active duty. While I can’t I can’t cover everything in this article, I can boil it down to the most essential topics:

These tips can help you create a strong financial foundation to last a lifetime.

Avoid debt – including student loans. New military members should avoid debt like the plague. In some circumstances, it can even ruin your career. Going into ROTC is a great way to avoid student loans. Graduating without debt will be a huge financial benefit that you won’t appreciate until you are out on your own and paying for everything out of pocket. One less bill means you have more money for fun now, and more money to save for later. Bonus tip: the military will forgive some student loans. This is only on a select basis, so be sure to research this before joining the service.

Don’t buy yourself an expensive graduation gift – including a new car. Large monthly payments add up more quickly than most people realize. $400 car payment, $1200 in rent, cell phone, cable, internet, utilities, fuel, insurance, food… not to mention furnishing your house or apartment. The next thing you know, you are living paycheck to paycheck. Start off small and grow into your salary. A good way to do this is to continue living like you are still a college student for as long as you can. Then upgrade your lifestyle as necessary, and as you can afford to.

Don’t squander a signing bonus. Not all military jobs come with a signing bonus, so consider yourself lucky if you receive one when you join the military. It’s OK to have fun with your military bonus, but it’s also a good idea to use some, or all of it responsibly. Make plans for the money before you receive it, otherwise the temptation will be strong to spend it on frivolous things, or just lump it in with the rest of your savings, only to see it slowly dwindle away. Here are more tips on how to use a military bonus.

Save for two things: (1) retirement, and (2) your transition out of the service.

1. The military has one of the best retirement systems in the world. You can earn roughly 50% of your base pay after serving only 20 years in the military. But only around 15% of people stay in for the entire 20 years. That means roughly 85% of veterans transition back into the civilian sector. More on this in a moment. Even if you stay in long enough to earn a military retirement pension, it may not be enough to live on. It will be a good idea to supplement that with contributions to the Thrift Savings Plan, which is the government version of a 401k plan, or with an IRA.
2. Transitioning back into the civilian work force can be a difficult and expensive time for many people, as it often involves relocating, some time off work, and other related expenses happening at a time when your income may be lower than you are used to. Have a cash cushion to help you through this time.

Save some more. Want to buy a nice car? How about a house? Marriage and kids? Most incoming college students don’t think of these things, but they are among the largest expenses you will have and some or all of these will probably be on your agenda at some point in the future.

Seek personal and professional advancement. The military offers a variety of personal and educational benefits, including training, leadership opportunities, travel, and more. Put yourself out there and learn, see, and do. Your life and future career will be much richer, whether you serve four years, or 20.

Take advantage of your military benefits. Military members and veterans have access to a multitude of valuable benefits. It’s not possible to cover all of them in an article (it takes a book to cover everything), but there are some benefits which are very valuable, and widely available. The biggest are the VA Loan, and the GI Bill. The VA Loan can be used to help you buy a home with a guaranteed loan, a low interest rate, and no money down, should you choose.

The GI Bill can be used for college education. Having a degree already is nice, but you may decide to use military education benefits for more advanced schooling, or, if you decide to stay in the service long enough, you may be able to transfer your GI Bill benefits to your dependents. Other valuable benefits exist, and it’s a good idea to to buy a book to help you understand some of them (The Military Advantage by Terry Howell is a great place to start – it covers dozens up benefits and is updated each year).

Buy The Military Guide to Financial Independence & Retirement by Doug Nordman. This is by far the best book I’ve read about how to use your military service to position yourself for a financially independent retirement. This book is valuable, even if you don’t stay in for the full 20 years required to receive full military retirement benefits. Doug runs the military blog, The Military Guide, is financially independent and “walks the walk.” He also donates the proceeds from the sale of his book to military charities, so he isn’t out just to make a quick buck. Buy the book.

Bonus tip: Have fun. Serving in the military is a great experience, but there is more to just dollars and cents. In my time with the military, I had the opportunity to travel to five continents and over 30 countries. Some of these trips were on official duty, but many of them were made on my own time and with my own dime. Spend money on adventures and experiences, and you will remember your time in the military for the rest of your life.

The Army Times recently reported the Army will soon begin a 50,000 troop force reduction over the next 5 years. The majority of the troops will leave the service through retirement and normal attrition, but there will also be voluntary and involuntary separations.

Troop reductions aren’t a big event if you were already planning on retiring or separating from the service. But they can be a major curve ball if you were planning on making the military a career or weren’t sure what your long term plans were.

This news can be stressful and make you ask a few important questions: Are you prepared to leave the service? What if you are involuntarily separated?

Before we go too far, you should know this is still in works, and is based on an Army plan that hasn’t been fully implemented. But you should also be aware that once these plans go into place, they can happen quickly. The last thing you want to happen is to receive a force reduction notice when you were planning on making the military your career.

Prepare for a Troop Reduction

Here are some things you and your family can do to prepare for the Army troop reductions:

Get up to date information. Don’t fall asleep at the wheel – you need to do everything in your power to educate yourself about the impending troop cuts. Will they be in your career field? What about your rank? If you are in an overstaffed career field, consider cross-training or applying for special duty assignments to make you more attractive if your profile appears in front a force reduction board.

Communicate. Communication is the most important aspect of personal finances, especially when you share financial responsibilities with a spouse. Keep your spouse up to date with what is going on with your career, the force reduction efforts, and how it might impact your position with the military. These may be tough conversations, but they are much easier to have in the advance stages of the force reduction process than they are after you have been selected for involuntary separation.

Examine your options inside and outside of the service. The USAF went through a force reduction process while I was in the service. It didn’t affect my career field or pay-grade, but I knew quite a few Airmen who were given the option to either cross-train or separate from the service. You will need to look at your civilian career opportunities and compare them to opportunities currently available to you. Keep in mind our current economy isn’t the strongest, and unemployment is high in many areas.

Consider the Guard or Reserves. You might also consider switching over to the Army National Guard or Army Reserves. Here is some additional information of available jobs in the ANG. You may also be able to transfer into the Guard/Reserves from a sister service. Most Guard and Reserve branches will welcome members from sister services with a minimum of additional training (usually just the tech school for the job to which you are applying).

Brush up on your skills. Now is the best time to start padding your resume. Make sure your training is up to date and take advantage of any military training or educational opportunities which come your way. You may also consider working online or night classes into your schedule, or working toward professional certifications which you may be able to use on the outside. Tuition Assistance may help pay for some or all of these courses.

Prepare for Unemployment

I was unemployed for 6 months after I separated from the USAF. It was difficult, but I had one advantage over many people in the unemployment line: I was prepared for it. Knowing that you are going to lose your job gives you an advantage and gives you time to prepare. Before you get out of the service, contact the state employment bureau where you plan on living after you separate from the military. In most cases, military members are eligible for unemployment benefits. There are some exceptions, so be prepared for this – you should know your eligibility and how to file for unemployment benefits before you leave the service. You don’t want to wait as it could delay your benefits.

Consider the financial impact. Separating from the military is a big deal – you have a steady paycheck with perhaps the best benefit system in the US. Don’t underestimate the impact of losing your health insurance and other benefits. The next most important area to focus on is to reduce your fixed expenses. This could be from getting out of debt, cutting expenses like cable or other subscriptions, refinancing a mortgage or other loan, or selling a car or other item which has remaining payments. Reducing your fixed expenses gives you more financial flexibility when you no longer have a job.

Consider the emotional impact. One of the most difficult experiences I faced when I separated from the USAF was going from a role of responsibility to the unemployment line. It’s tough going from a respected shift leader who makes important decisions on a daily basis, to someone who is standing in line behind dozens of other people who are looking for work. It took me 6 months to find a job, and it was a difficult period.

Know your benefits. Before you separate, make sure you know which benefits you are eligible for. This could include things such as the GI Bill and VA Loan, or it could include things such as a pension, TRICARE, disability benefits, and more. Take good notes in your Transition Assistance Program (TAP) and set up a meeting with the VA if you have medical issues you feel need to be addressed. It is always better to get as much done as possible before leaving active duty military service.

Do you have other tips for troops facing a drawdown?

Source.

The US Debt Ceiling is dominating the news, and with good reason. If the US doesn’t reach an agreement to increase the debt ceiling soon, the US will no longer be able to borrow money, and the government will effectively shut down. This is the same problem the government ran into a few months ago, and now the cash reserves and extensions have run out. The government needs to reach an agreement by early August, or it’s possible many government employees won’t get paid, and also possible that many individuals who receive government benefits (including many military and veteran benefits) might not get paid. What does this mean for the average American, and more importantly, what does it mean for our men and women in uniform?

What Happens if the Government Shuts Down?

First, let’s start with a little background on the situation: The US government is required to pass a spending bill each year. Essentially, this is their budget – without it the government ceases many operations and as a result, many government agencies will stop work and many will stop paying employees. The current spending bill ends this Friday, April 8th, and without passing a spending bill, the government will essentially shut down.

Will Military Members Get Paid?

The answer is yes, and no. Military members will receive their paycheck on August 15th, but there is the possibility that service members won’t get paid beyond August 15th if the government shutdown extends beyond that date. The last time the government had a major shutdown was in 1995, and military members continued to work and receive pay during the government shutdown.

What does this mean for military members? The first thing to consider is that this hasn’t happened yet – the government has until early August to reach an agreement on raising the debt ceiling. Should they fail to reach a new agreement on the debt ceiling, it is possible that the government could be positioned to shut down.

How much will you be paid, and when? If the government shuts down, you will receive your pay earned through the date at which the government shuts down. At this time the deadline is August 2nd, which wouldn’t make for a very large paycheck on the regularly scheduled August 15th payday.

Military members will receive back pay. If the government shuts down and military members don’t receive paychecks, they will receive back pay for missed paychecks.

Some service members may not be required to work. Some military members may be exempted from work, but not everyone. During the government shut down, most government employees will be temporarily furloughed and will not be required to work until a spending bill is passed. However, there are exemptions, especially for those whose work is required for national security. These groups of military members will be broken into exempt and non-exempt categories. So operations in war zones, earthquake relief in Japan, and many people involved in fields such as medical, security, and transportation will continue to work.

What about other benefits? Benefits related to your pay, such as BAS and BAH will not be paid during a potential government shutdown, however, other benefits may still be around, such as health care. Military members may also be forced to cancel leave because technically the government is not allowed to permit government workers to take paid leave while there is no spending plan, due to the way paid leave works from an accounting standpoint. At this point, much is still in the air, and these concerns may not have all been determined at this time. The Pentagon is awaiting more information before releasing official guidance for military members and their families.

Military related payments not expected to stop. The government shut down will only affect paychecks for government spending which must be approved on an annual basis. Some military related payments are made from a separate pot of money and likely won’t be affected. The following payments are expected to continue without interruption:

• Military retiree pay
• GI Bill benefits
• Veterans receiving monthly disability and compensation payments

What about Social Security Benefits or Veterans Health benefits? During the last shut down, the government continued sending Social Security Benefits to recipients. However, many veteran health care services were curtailed during the shutdowns. At this time it is unknown what will happen with these services. if the government shuts down.

UPDATE: Here are some tips for Dealing With a Missed Military Paycheck. These tips can show you how to get by on your own or how to contact your lender, landlord, or financial aid service to get help with this situation.

Source – CNN.

We are happy to announce that The Military Wallet was chosen as the June 2011 Military Blogger of the Month presented by USAA. USAA does a great job for our military and their family members and it is a great honor, and a wonderful surprise to be recognized by such a great financial institution.

What Is The Military Blogger of the Month presented by USAA?

Military Blogger of the Month presented by USAA

Each month, USAA identifies bloggers who “have gone above and beyond to advocate public financial health and provide military audiences with valuable, money tips, and support for troops and families.”  The award seeks to identify blogs that provide military audiences with valuable money tips in support of troops and their families. See the entire Press Release with the announcement on USAA.com.

About The Military Wallet. The goal of this website is to provide military members, veterans, and their families with information to help them improve their financial situation. This site was founded by Ryan Guina, a veteran of the USAF who started this site after his experiences in the military left him wanting a better resource for financial topics related to the military. He also runs a sister site the The Military Wallet – Cash Money Life, which is a financial website geared toward people of all walks of life, and includes tips on money management, small business, career topics, and reviews of financial products and services.

Ryan is no longer serving on active duty, but considers it a pleasure to continue serving the military community through The Military Wallet.

My experience with USAA*. I would be remiss to tell people how USAA has been a factor in my life. I have been a member of USAA for over a decade now, since I used USAA to insure my first vehicle while I was stationed overseas. I have been banking with them just as long and use USAA for a variety of financial services and insurance products. I am happy to recommend USAA products and services to everyone, but like all financial products and services, I recommend shopping around. For example, I used to insure my motorcycle with another company after I found much better rates (the USAA rep actually recommended I go with another company because she thought the other company would offer better rates – how is that for service!).

*sharing my experience with USAA was not a condition of this award.

Criteria for Military Blogger of the Month presented by USAA

The Military Blogger of the Month presented by USAA designation presented to individuals or organizations that:

• Blog in support of military members and their families.
• Help educate audiences about military benefits.
• Demonstrate that they have military members’ best interests at heart by helping their audiences understand and aspire to financially healthy habits.
• Pass along valuable financial news and tips that…
  • are based on research and the advice of Certified Financial Planners.™
  • give military members peace of mind.

It is an honor to have our site recognized as meeting these criteria.

Thanks to our servicemembers. This site would not exist without the men and women who have worn our uniform, or without those who love and support them. It is a pleasure to continue serving you and we look forward to continuing to bring you relevant content to help you improve your financial situation. Please feel free to contact us at any time with questions or comments and we will do our best to respond or point you in the right direction.

The Festival of Frugality is a weekly roundup of financial articles designed to help readers learn how to save money and more importantly, be better stewards of what we have been blessed with. That means more than just saving money with coupons or finding good deals. It also means being frugal – reusing things, recycling, and being creative with what we have – or being creative finding alternatives to what we want. It can also mean spending consciously on the things you like and finding ways to cut back in other areas so you can enjoy the life you want to enjoy without the constraints of a limited budget getting in the way.

The following articles were hand selected out of over 60 entries. These articles are varied in nature and represent a variety of opinions, stories, testimonies, and examples of how you can better use the resources at your disposal to live the life you want to live. I hope you enjoy them.

Saving Money on Banking:

• Donna Freedman presents Five Ways to Outwit the ATM posted at Get Rich Slowly, saying, “Resist the siren call of “Easy money! Just enter your PIN!”"
• Tim Chen presents Top Military Credit Union Picks: Finding the Best Credit Card Deals posted at NerdWallet Blog – Credit Card Watch, saying, “Military servicemembers don’t look for the same credit card attributes as their civilian counterparts do: they face a unique set of personal finance challenges, but are also entitled to the benefits of their service. So finding the right credit card for a member of our armed forces involves a slightly different selection process.”
• Bankman presents Save Money with Credit Cards.
• Craig Ford presents Best Ways to Maximize Cash, Credit Card, and Debit Card Rewards posted at Money Help For Christians, saying, “How to maximize your credit cards or debt card rewards.”
• Jeri Ford presents American Express Membership Rewards Review and Value Analysis posted at Help Me Travel Cheap, saying, “An evaluation of the American Express Membership Rewards program.”
• Consumer Boomer presents Top 5 Bankruptcy Myths Dispelled for You posted at Consumer Boomer, saying, “For those who have been considering bankruptcy, but are concerned about the overall impact it could have on their financial future, we are going to break a few myths.”
• N.W. Journey presents What is Compound Interest? posted at Networth Journey, saying, “A basic introduction to compound interest.”
• Jacob A. Irwin presents One Call, Save Thousands On Your Credit Card Bill posted at My Money Blog – Personal Finance and Investing, saying, “A description of the steps to take for a telephone call that can get your debt interest rates cut in half.”

Saving Money on Entertainment:

• Glen Craig presents Inexpensive (Cheap) Date Night Ideas for Parents posted at Parenting Family Money.
• Suba presents How to watch TV for free posted at Wealth Informatics.
• BIFS presents Now Available at a Library Near You posted at Budgeting In the Fun Stuff, saying, “There isn’t anything more frugal than borrowing the things you need at no cost. That’s why the library is the ultimate friend of the frugal. Here are some things you may not know about that your library has available.”
• Joe Plemon presents 7 Alternatives to Cable TV posted at Personal Finance By The Book, saying, “One doesn’t have to continue paying high dollar cable TV…there are other options.”
• Kyle James presents Hot To Take Frugal Family Vacation posted at Kyle, saying, “Thanks for hosting!”

Saving Money on Food

• Fred Lee presents 10 Easy Freezer Friendly Meals posted at Parenting Squad.
• Rodney Maley presents 3 Keys To Saving 50% Or More On Your Grocery Bill posted at Life-fficient.
• Tom presents How to Save Money at the Grocery Store posted at StupidCents, saying, “I’d like to share a few tips on how to save money at the grocery store.”
• Beth from SmartFrugality presents Why Making My Own Yogurt is Frugal posted at Smart Frugality, saying, “When determining if a money saving activity is worthwhile, often people look at how much it saves and how long it takes. It is also important to consider how much time the alternative takes too.”

Saving Money on Housing:

• Glen presents When is a Good Time to Consider Refinancing Your Mortgage? posted at Free From Broke.
• Jim presents Buying Timeshares: Developer Sales, Resale Market posted at Timeshare Secrets Exposed.

Saving Money on Living Expenses

• Ann presents Day 114: maybe tomorrow he’ll want to settle down… posted at The Year of Shopping Detox, saying, “Hitch-hiking may not be for everyone, but here’s one man crossing the country with little more than a ukulele and a dream!”
• Dr. Dean presents The Wedding Is OVER: Yeah! Plus 6 Wedding Attending Money Saving Tips! posted at Dr. Dean’s TheMillionaireNurse.com Blog, saying, “Second to the cost of a wedding comes the cost of having to attend one! With gifts, flights, hotels, meals, and drinks, attending a wedding can really put a dent in your pocketbook. Here are some tips to keep that cost down.”
• Tom Drake presents 10 Ways To Save Money At The Gas Pump posted at Canadian Finance Blog.
• debt kid presents Giving/Serving While Getting Out Of Debt posted at Debt Kid.
• Dana presents 7 Tricks to Increase Your Savings Without Decreasing Your Lifestyle posted at Not Made of Money.
• FMF presents 25 Ways to Save Money posted at Free Money Finance.
• Sandy presents Is The Frugal Movement Over? posted at Yes, I Am Cheap.
• Adam presents Avoid Hitting the Rocks of Financial Ruin posted at Magical Penny.

Saving Money on Shopping

• Neal Frankle presents What is Groupon and Why It?s Evil posted at Wealth Pilgrim: Money Management Advice, Financial Stess Management, Addiction Recovery Plan & Resources, saying, “You’ve probably heard about Groupon and how it’s the best thing since sliced bread. I don’t like it because it’s going to result in lots of people struggling with how to get out of credit card debt (you’ll see why in a moment).”
• Melissa Batai presents My Experiment: Is It Worth the Gas to Shop Multiple Grocery Stores? posted at Mom’s Plans, saying, “My husband complains that I am probably losing the savings from grocery shopping at two stores because of the high cost of gas. So, this week, when I went shopping, I priced out items at both stores and the amount of gas the trips took. Here is what I found:”
• Money Beagle presents Cut ALL Your Coupons With Scissors posted at Money Beagle, saying, “We all want to be frugal, but make sure you’re not hurting your store (and yourself in the long run) by going overboard with coupon clipping. Keep it simple and don’t ruin it for the rest of us!”
• Fanny presents 4 Extreme Couponer Blogs to Follow posted at Living Richly on a Budget.

That concludes this edition. If you want to participate in next week’s Festival of Frugality you can submit your entry with this submission form, courtesy of Tom at the Canadian Finance Blog. (BlogCarnival.com has been inconsistent over the previous few weeks).

Past posts and future hosts can be found on the blog carnival index page.

The government still hasn’t passed their spending bill, and we’re getting close to “go time.” If the government doesn’t pass their spending bill in the next few hours, many military members and other government employees run the risk of only receiving a partial paycheck when their next paycheck is due, and potentially missing future paychecks if the situation drags on. Read Will Military Members Get Paid if the Government Shuts Down? for more information.

Military members and essential government workers will be required to report to work if the spending bill isn’t passed, and if they don’t receive their paychecks on time, they will at least receive back pay for missed pay. However, some government workers deemed non-essential would be furloughed and may or may not receive back pay for any missed paychecks. This is an ugly situation, but one that has not yet been finalized, so there is still hope. Here are some things you can do to help bridge the gap in pay if there is one.

How to cope with a missed pay check

1. Dip into emergency savings

If ever there were a time to stress the importance of an emergency fund, this is it. Government jobs are usually considered the most secure jobs of all, but this goes to show that even the most stable of jobs can have issues.

2. Talk to your lenders or landlord

Many lenders and landlords are aware of the situation and may be willing to work with you in this situation. It is always better to seek out assistance before you need it than to ask forgiveness for a missed or late payment after the fact. Contact your lender or landlord now, explain the situation, and ask them if there is any way they will be willing to work with you should the government force missed or late paychecks.

3. Tap into a home equity line of credit (HELOC)

This probably only works if you have an open HELOC since being approved for a new HELOC would probably take too long to get approved. Keep in mind that tapping into a HELOC for normal living expenses is not usually a good idea because you are putting your mortgage on the line. You should pay it off as soon as possible to avoid risking your home.

4. Credit cards.

Use credit cards judiciously and only for necessary expenses, not luxuries. The chances are very high that this will not last a long time, and you should receive your back pay soon, if indeed any pay checks are missed. If this is the case, then be sure to pay your balance off as quickly as possible to avoid interest charges. You may also wish to use a credit card that has a 0% Intro APR period for new purchases, which could offer you several months of 0% interest on your new purchases, which would effectively be an interest free loan. Again, you want to be careful with this and only charge what you can afford to pay off immediately upon receiving back pay. Here is a list of some of the best military credit cards.

5. Sell items.

Go through your garage, closets, and rooms and find items you no longer need or use and see if you can turn them into some quick cash. There are several ways you can do this, including listing items on Ebay, selling things on Craigslist, taking items to a pawn shop, having a garage sale, etc. you may need to get creative, but it beats being without money, and it can also be nice to clear out some space in your home. My wife and I cleared out our home this past winter and sold close to $2,000 worth of items on Craisglist – things we weren’t using and no longer needed. It was great to make money and have more room in our home!

6. Take odd jobs for cash.

There are many ways to earn extra cash – you could take a part time job, do landscaping work, freelance work online, babysit, clean houses, etc.

7. Contact your Service Aid Society.

Each branch of the military has an aid service which may be able to offer temporary assistance. For example, the Navy Marine Corps Relief Society (NMCRS) has stated they will offer single sailors and Marines a $300 loan and families will be able to receive a loan for $600. The Air Force Aid Society has already published a series of frequently asked questions: In Event of A Government Shutdown FAQ.

8. Don’t panic and remain proactive.

Right now not a lot is known about what will happen. My guess is that this will go down to the wire, and there may be a delay in some pay. But everyone will receive their pay through at least April 8th (the April 15th paycheck would only be half the normal size), and if this impasse continues, then some pay may be deferred. the best thing military members can do is be proactive, talk to their lenders and landlords and try to find ways to juggle their funds to minimize the impact of this situation.

9. Prepare for the future.

It is unfortunate that we reached this point, and that things may get worse before they get better. That is why it is imperative for you to take matters into you own hands. Start now and begin putting money into a savings account so you can have something set aside for a rainy day. Even adding $10-$25 a week can make a big difference in your ability to handle these situations when they arise. And I’m not just talking about when the government fails you – I’m referring to when life happens. A car wreck, a home emergency, unexpected travel expenses, and family emergencies happen. This is a great reminder to prepare yourself and your finances for the unexpected. Here are some of the best interest rates for online banks.