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PERSONAL FINANCES

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PERSONAL FINANCES Powered By Docstoc
					PER$ONAL FINANCIAL
   MANAGEMENT
        OPNAVINST 1740.5B
            YN1 Amita Jenkins
TOPICS OF DISCUSSION
          MILITARY SAVES

     THRIFT SAVINGS PLAN (TSP)

         CREDIT SCORING

             TAKING STEPS TO AVOID
               IDENTITY THEFT

             PERSONAL FINANCIAL
              MANAGEMENT (PFM)

                PAYDAY LOANS

       HOME DOWN PAYMENTS & CLOSING

     COSTS STIPENDS AVAILABLE TO TROOPS

         BUYING A NEW OR USED CAR
                                MILITARY SAVES
     The first step is to set a savings (or debt reduction) goal. People with
  written goals and plan to reach them are much more likely to succeed. If
 you have a written savings goal, you’re likely to save twice as much money
      as someone who does not have a goal! When you set your first goal,
     remember the SMART goal-setting guidelines. Make sure your goal is:
 • Specific, significant to your situation and the goal should not stretch you
     beyond your means. (i.e.) the set goal is more than you are able to go;
  • Measurable, so you are able to track your progress easily. It should also
 be meaningful to you and your family and should motivate you to want to
                                 achieve your goal;
 • Achievable, make sure the goal is agreed upon and includes your spouse
if you’re married, and ensure you are both action-oriented and on the same
                                       page;
 • Results-oriented, realistic in light of your personal situation as well as a
                       rewarding experience for all involved;
   • Time-based, Set a date that is comfortable for your budget. The target
      goal should also be tangible, and as we discussed before trackable.
    Make your Money Grow !!
•   PERSONAL FINANCES
•   THRIFT SAVINGS PLAN (TSP)
•   TSP is comprised of six funds. Sailors can allocate savings to any or all of these
    funds to match their financial objectives.
•   The six funds are:
    - Government Securities Investment (G) Fund — invested in short-term, risk-free
    U.S. Treasury securities that are specially issued to the TSP.
    - Fixed Income Index Investment (F) Fund — invested in a bond index fund that
    tracks the Lehman Brothers U.S. Aggregate (LBA) bond index.
    - Common Stock Index Investment (C) Fund — invested in a stock index fund
    that tracks the Standard & Poor’s (S&P) 500 stock index (which comprises large
    companies).
    - Small Capitalization Stock Index Investment (S) Fund — invested in a stock
    index fund that tracks the Wilshire 4500 stock index (which comprises small and
    medium companies).
    - International Stock Index Investment (I) Fund — invested in a stock index fund
    that tracks the Morgan Stanley Capital International EAFE (Europe, Australasia,
    Far East) stock index (which comprises stocks in 21 countries).
    - Lifecycle (L) Fund—diversified account among the G, F, C, S, and I Funds, using
    professionally determined investment mixes that are tailored to different time
    horizons.
•   All these funds except the G Fund may lose money and past rates of return are
    not indicative of future performance. Before investing, Sailors should look at
    their current financial situation, time until retirement and investment risk
    tolerance. Armed with complete, accurate information, Sailors and their families
    can decide how much to invest in which fund.
                                 CREDIT SCORING

• PERSONAL FINANCES
• CREDIT SCORING
• Lenders use a system to grade, or score, your credit. Paying
  your bills late can negatively impact your credit history,
  which directly affects your credit score. Lenders use this
  score to decide if you are a good credit risk. If your score
  places you in an increased-risk category, you may still qualify
  for the loan, but at a higher interest rate. To start
  understanding your credit standing, check with credit
  reporting agencies such as Equifax, Experian, and Trans
  Union to monitor what would-be lenders are seeing. If you
  have been denied a loan because of an adverse credit rating,
  you can receive a free copy of your credit report if you request
  it within 60 days. If you want a copy of your credit report
  independent of the loan process, it's available for free from
  AnnualCreditReport.com.
                                     TAKING STEPS TO AVOID
                                       IDENTITY THEFT..

•   Identity theft, according to the Federal Trade Commission, occurs when
    someone uses your personal information, such as your name, Social
    Security number (SSN), credit card number or other identifying
    information, without your permission to commit fraud or other crimes.
•   Always be alert and take nothing for granted when it comes to your
    identity. Someone could be watching and I can assure you it isn’t GEICO
•   The best way to deter identity theft is to make it harder for thieves to
    gain access to your personal information. Guard your SSN, and never put
    your SSN on your checks or any other paperwork that without a privacy
    act cover sheet if at all possible.
•   It’s best to check your credit report at least twice a year, making sure
    you get reports from all three of the major credit bureaus.
•   You may be surprised by how much information a thief could get just by
    rummaging through your trash. A cross shredder is a great investment to
    ensure potential compromise control.
•   Keep an eye on your mail to ensure that bills and other financial
    documents arrive on time, and follow up with creditors if they don’t.
•   Robust passwords, a good firewall, regular updates to your operating
    system and regular updates to your anti-virus software are necessary.
•   If you are a victim of identify theft close accounts that may have been
    tampered with or opened fraudulently; file a police report; and file a
    complaint reporting identity theft.
                                PERSONAL FINANCIAL
                                MANAGEMENT (PFM)

• Make your Money Grow !!
• In November 1990, the Navy mandated financial
  education, training, and counseling for Navy personnel
  with the issuance of OPNAVINST 1740.5B. This
  instruction mandates the Personal Financial Management
  (PFM) Education, Training and Counseling Program. In a
  cost conscious Navy, the PFM program makes good
  business sense for the bottom line. The Navy's Personal
  Financial Management Education Program is designed to
  prevent potential personal problems that could cost
  valuable time and money and could detract from mission
  readiness. Now, in its third revision, OPNAVINST
  1740.5B, dated 7 May 2007, continues to mandate the
  Navy's PFM program.
                         PAYDAY                 LOANS
•   Your thoughts
•   Good Idea/Bad Idea
•   Pro’s/ Cons
• While these online advertisements may sound enticing to cash-
  strapped service members, they could ultimately cost them
  their jobs. Members of the military who unwittingly find
  themselves in dire financial straits with so-called “payday
  lenders” are often surprised when their security clearances are
  either revoked or denied, an increasingly common scenario that
  not only ruins career opportunities but hinders military
  readiness, according to Navy officials. Companies offer to lend
  you money until payday. All you have to do is write a
  postdated check for the loan amount plus interest or service
  charges. They tell you that your check will be cashed after
  payday or you can roll the loan over until the following payday
  for an additional fee. The extremely short term of the loan
  results in interest charges as high as 300 to 400 percent.
• Please Note * A loan at 300 percent interest is not a good
  bargain.
    Military Housing Assistance
           Fund (MHAF)
•   DOWN PAYMENT, CLOSING COSTS, EVEN HOUSE PAYMENTS
    AVAILABLE TO TROOPS
•   A nonprofit organization, Military Housing Assistance Fund (MHAF), is
    offering a solution for our service men and women who want to buy a
    home but cannot afford the down payment and/or closing costs.
•   A concerned group of Denver and Memphis business people started
    MHAF when they realized how few military people own their own homes.
    The Department of Housing and Urban Development reports
    homeownership at an all time high, with 68.3% of all Americans owning
    their own homes.
•   Unfortunately, servicemen and women are being left behind. In a Rand
    Corporation study only 27.3% of military families own their own homes.
    When military families were asked why they do not own their own
    homes, nearly half said, "because they cannot afford to purchase a
    home."
•   Military Housing Assistance fund creates the opportunity for US service
    members to realize the American Dream of home ownership. It also
    offers private citizens the opportunity to contribute needed support to
    those in military uniform who protect the nation's freedoms every day.
•   MHAF gives 100% of the funds it receives to the intended beneficiaries.
    Every dollar the MHAF receives is given either as gifts to service men
    and women to assist them in purchasing their own homes, or to those
    serving in combat zones who are unable to make their monthly mortgage
    payments.
BUYING A NEW OR
USED CAR
•   There are many ways car dealers can rip you off for example charging
    more than a car is worth, offering fabulously low interest rates that are
    later switched to higher rates, charging for unnecessary luxury items
    that don’t exist, charging for unnecessary services, or requesting a down
    payment without a signed contract.
•   Do your research before you even set foot on the lot. Try the National
    Automobile Dealers Association or the Kelley Blue Book for pricing
    guidelines and car-buying advice that can help you make a cost-efficient
    purchase.
•   Once you've selected a car and negotiated the price, have your sales
    contract reviewed by Navy Legal Services or Marine Corps Legal
    Assistance, or by a financial counselor at the Navy Fleet and Family
    Support Center or Marine Corps Community Services. If the dealer
    won't wait or is evasive about financial details, find a new dealer.
    Another option is to go to your local bank open a savings account and
    have them do an analysis checking what the car you are looking at is
    worth. You can then opt to request that the bank write you a check for
    that car’s worth according to your credit eligibility. You arrive at the car
    dealership with your check and they then have a choice of letting you
    walk away with the car that you want or you walking away with a check
    worth X thousand dollars and getting that car at another lot. You then
    eliminate most of the risks mentioned before,
For more information and helpful tips/ links please refer to

http://www.lifelines.navy.mil/lifelines/MilitaryLife/PersonalFinances/index.htm


          That concludes the training on personal financial
                            management…
                Hope you learned a lot.
       We will find out sooner rather than later
                      because its…
                  $$ GAME TIME $$
                   Come on down !!!

				
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