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'Military Saves' encourages Soldiers to build nest egg

By C. Todd Lopez

WASHINGTON (April 02, 2009) -- Financial security at home can mean one less distraction from the mission downrange.

"Imagine deploying, or going out to training -- and what is in the back of your mind is how are you going to pay your mortgage, or is your family going to get evicted while you are deployed," said Michael A. Wood, Family and Morale, Welfare and Recreation command, and the Army liaison to the Military Saves program. "You are not going to be focused on the mission. Financial literacy is a readiness issue."

The hand of a person in a military uniform inserts coins into a ball-shaped yellow bank that is painted with a smiley face.
Through sponsorship of the Military Saves program, the Army encourages Soldiers to become financially stable through savings and investment.

Having your financial situation in order, in part by committing to a savings plan, can contribute to mission readiness, Wood said. To help Soldiers make that happen, the Army participates in the Department of Defense-sponsored "Military Saves" program, which encourages Soldiers to become financially literate and to save their money.

The Military Saves program asks participants to take a pledge to commit to financial security through savings, reducing debt and building wealth. Soldiers can learn more about Military Saves through the campaign's Web site at

"We use the Military Saves campaign as an opportunity to reinforce, encourage, motivate and educate Soldiers on ways to increase savings," Wood said.

Military Saves is primarily a campaign to motivate servicemembers and their families to save money each month, and to additionally encourage unit leadership to persuade members to participate in automatic savings plans. The campaign is supported by all four branches of military service, the Department of Defense, banks and other financial institutions, as well as agencies such as the Army Emergency Relief, the Air Force Aid Society and the Navy-Marine Corps Relief Society.

Military Saves is part of the larger America Saves campaign. The two programs are operated by the non-profit Consumer Federation of America. The program is also a partner in the Department of Defense Financial Readiness Campaign. Military Saves was developed and tested by the CFA and the military services before being launched throughout the DOD in February 2007.

In addition to asking Soldiers to commit to saving, the campaign provides on its Web site information about where Soldiers can learn more about both saving and investing their money. The program also sponsors four campaign weeks a year dedicated to different aspects of financial preparedness, including a week dedicated to saving and investing, a week for teaching youth about the importance of saving, a week dedicated to debit reduction, and a week dedicated to preparing for retirement.

Wood said that during those campaign weeks, booths may be set up at commissaries or post exchanges to pass on important financial information to Soldiers.

During the last Military Saves informational week, which ended March 1, the Military Saves campaign also added 6,800 new Soldiers who made the commitment to be better savers of their money, Wood said.

"And our goal is to increase that each quarter," he added.

Wood also said the Army offers its own programs to help Soldiers save and to help them learn how to better manage their money. At Army Community Service centers, financial readiness program managers help educate Soldiers about better money management, he said.

"We have certified councilors located in the facilities to educate Soldiers on the different venues, savings accounts, certificates of deposit, offers from local credit unions, mutual funds, bonds and any other number of ways you can do better than just a savings account," Wood said.

He also said that even before savings begins, Soldiers can better learn to manage their income stream by learning to build a budget, reduce their debits and pay their bills on time.

"You also have to have some goals, long term goals, and also individual and family specific goals," he said.

For Soldiers who are deployed, there is the Savings Deposit Program. That program offers Soldiers the opportunity to earn up to ten percent on funds deposited while deployed -- a rate of return much higher than what many banks are now offering. Wood said the program is underutilized and that's unfortunate because Soldiers earn additional pay while deployed that could be painlessly invested.

"Soldiers have been enduring repeated back to back deployments over the last few years," he said. "While they are deployed there is a lot of additional pay that is affiliated with that deployment -- hostile fire pay for instance -- a lot of that is tax free."

He said when Soldiers get back from deployment, there may be a "nest egg" that has built up, and that sometimes Soldiers are tempted to spend that on things they want rather than need.

"When they receive those amounts of money they want to go out and spend," he said. "What we want to try to focus Soldiers on is that you don't have to have it today. If you put a little bit of your savings away each month, and if you intend on making the Army a career, you will have a tremendous nest egg."

The time to start saving is now, Wood said, and anybody can do it.

"It is never too late to save and you're never too old to start saving," he said. "Each year you should write down your savings goals. And if you accomplish just one of them that puts you in a better place than you are today."

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