cdr dave julian (director, personal finance)

Defense Senior Leadership Spouses’ Conference

NGB – Joint Family ProgramVolunteer Workshop

Defense Credit Union CouncilDefense Issues 2009

Department of DefenseFinancial Readiness Update

CDR Dave JulianDirector

OSD Office of Personal Finance

Military Community and Family Policy




Topics

Economic Environment (“VUCA”) Financial Readiness Campaign “Roadshow” Events FINRA Military Retirement Confidence Survey Questions




Economic Environment

Credit Crisis

Savings Crisis

Foreclosure Crisis

Banking Crisis

Federal Bailouts

Market Instability




Trend Analysis: E1 – E4 Self Assessment of Financial Condition

Question: “Which of the following best describes your financial condition?”

1. Very comfortable and secure

2. Able to make ends meet without much difficulty

3. Occasionally have some difficulty making ends meet

4. Tough to make ends meet but keeping your head above water

5. In over your head

Percentage answering question at right with responses 4 or 5

8

12

16

20

24

28

32

CY 02 CY 03 CY 04 CY 05 CY 06 CY 07 CY 08

Army Navy MC AF DoD Linear (DoD)

Overall trend within error tolerances: fewer Service members appear to be finding it tough to make ends

meet or in over their heads – Army slight upturn




Trend Analysis: E1 – E4 Ability to Pay Bills on Time

Question: “In the past 12 months, did any of the following happen to you (and your spouse)? Mark yes or no for each item.”

• Bounced 2 or more checks

• Failed to make a monthly/ minimum payment on credit card, AAFES, NECOM account, or Military Star card

• Fell behind in rent or mortgage

• Was pressured to pay bills by stores, creditors, or bill collectors

• Had telephone, cable or internet shut off

• Had water, heat or electricity shut off

• Had a car, household appliance or furniture repossessed

• Failed to make car payment

• Obtained payday loan

Percentage answering yes to one or more of the answers to the question at right

26

30

34

38

42

46

50

CY 02 CY 03 CY 04 CY 05 CY 06 CY 07 CY 08

Army Navy MC AF DoD Linear (DoD)

Overall trend within tolerances: Little to slight increase in members appear to be reporting

difficulties with maintaining finances




Good news……? Our Service members and their families are not immune

from the storm, but they do have some shelter:– Guaranteed paycheck– Spousal employment programs– Low-cost child care programs– Medical/dental benefits– Commissary/Exchange privileges & other installation support– Special pays & moving allowances– Tax-free housing and subsistence allowances– Only 25-30% own homes as primary residence

And……




Started in 2003 to reduce the stressors associated with financial issues on Service members and families

Education, resources, protectionsFederal, state, local/non-profit outreach and programsPlatform represented by 8 “Financial Pillars”

The DoD Financial Readiness Campaign

DoD has been emphasizing financial readiness as a critical component of mission readiness long before

the current economic crisis:

DoD has been emphasizing financial readiness as a critical component of mission readiness long before

the current economic crisis:

Financial Readiness = Mission ReadinessFinancial Readiness = Mission Readiness




The Pillars of Personal Financial ReadinessGood Credit

FinancialStability

RoutineSavings TSP/SDP

SGLI/Insurance

Low %Loans

SecurityClearanceMWR




Military Saves 2009 22 February – 1 March 2009 Events planned at installations world-wide Incentivized savings programs at banks & credit unions Saver Pledge Quarterly themes:

– 1st quarter: Save and Invest

– 2nd quarter: Youth Financial Readiness

– 3rd quarter: Debt Reduction

– 4th quarter: Retirement

Build Wealth, Not Debt!Build Wealth, Not Debt!




“The Right Information, at the Right Time, to the Right People”

Delivering correct, user-friendly information Reaching Guard and Reserve families Reaching geo-isolated families Meeting emerging expectations of new

generations “High Tech-High Touch” Building a worldwide, trusted communication

system to connect with troops and families

Changing Community = Changing ServicesChallenges

The Digital Generation




Military OneSource Military One Source (www.militaryonesource.com)

– 24/7 world-wide assistance, on-line and by phone

– “Money” Section

– Telephonic financial counseling or face-to-face upon request Effective 17 Nov: Partnership with NFCC

– Mortgage/foreclosure assistance

– Referrals, connections to key helping agencies




Installation/Unit Financial Managers/Specialists Military One Source

– Telephonic counseling

Military Family Life Consultants– “Personal Financial Counselors” (PFC)

– AFC/CFP-certified

– On-demand assignments upon installation request

– Briefings, one-on-one counseling, education & training

Financial Readiness Partners

Financial Counseling




FINRA initiative in partnership with AFCPE & NMFA Program:

– Personal Finance and Financial Counseling & Debt Management– Study group webinars– Examinations– Practicum hours (scaled)

200 selectees from 2000 applicants– 172 active participants (11% drop rate)– All Services, components– Status: 31 AFC-certified, 7 finalizing cert process

Practicum hours Employment opportunities following certification

Military Spouse Fellowship Program




Financial “Roadshows” Purpose: to assist installation commanders in providing financial education and

resources to help their troops and families Available to installation commanders by request at no cost

Tailored to the needs of the installation* Roadshows feature:

– Financial/Motivational Keynote speakers

– General session presentations & breakout workshops

– Exhibit Hall/Display booths

– One-on-one financial counseling (PFC)

– “Leave behind” teams

– Practicum/employment support for Spouse Fellows pursuing AFC certification

Installations encouraged to utilize all installation resources– Family Centers, Commissary/Exchange, MWR, Legal Services, Chaplains, Child

Development/Youth Centers, Schools, Banks and Credit Unions




The Savage Truth on Money "America's Money Answers Man"

Sammy the Rabbit John Sileo

“Think Like a Spy”

Terry SavageJason Goodman

Guest Speakers

Identity Theft E

xpert

Dr. Robert Manning

Credit Card Nation




Take Five: What I Wish I Had Known About Personal Finance Better Than a Budget: Develop a Spending Plan That Will Keep You On Track The Perils of Plastic: Avoid Drowning in Debt... Charge Wisely! Dream Big - Plan Now! Make Your Ideal Retirement a Reality Pay Yourself First: Why You Should Sign Up for the Thrift Savings Plan Today Have You Fed Your Pig Today? Simple Tips for Saving & Investing Ready for Everything? Insurance Essentials for the Service Member With or

Without a Family The Wheels You Want: Successful Car-Buying Strategies Home, Sweet Home: Strategies for Home-Buying and Protecting Against

Foreclosure You’ve Earned It! Making the Most of Your Military Benefits Before You Take Off: Financial Planning for Deployment Don’t Lose It! How to Protect Yourself Against Identity Theft

CDR Dave Julian, [email protected]




Roadshow Locations

Luke AFB13 Nov 08Luke AFB13 Nov 08

Tinker AFB5 Nov 08

Tinker AFB5 Nov 08

Fort Drum5 Nov 08-30 Jan 09

Fort Drum5 Nov 08-30 Jan 09

Fort LewisMcChord AFB

4 Dec 08

Fort LewisMcChord AFB

4 Dec 08

Grand Forks AFB29 Jan 09

Grand Forks AFB29 Jan 09

Little Rock AFB2 Mar 09

Little Rock AFB2 Mar 09

Buckley AFB18-19 Sep 09Buckley AFB18-19 Sep 09

FE Warren AFB22 Sep 09

FE Warren AFB22 Sep 09

Goodfellow AFB24 Jul 09

Goodfellow AFB24 Jul 09

Eglin AFB14 Jan 09

Eglin AFB14 Jan 09

Fort Sill9 Sep 09Fort Sill9 Sep 09

Scott AFB5-6 Jun 09Scott AFB5-6 Jun 09

Pentagon23 Feb 0927 Apr 09

Pentagon23 Feb 0927 Apr 09

Fort Polk6 May 09Fort Polk6 May 09

Lackland AFB10 Dec 08

Lackland AFB10 Dec 08

MCRD24 Feb 09

Fort Carson28-29 Sep 09Fort Carson28-29 Sep 09

USS Peleliu26 Feb 09

USS Peleliu26 Feb 09

NAVSTA San Diego23 Feb 09

NAVSTA San Diego23 Feb 09

MCAS, Miramar21Feb 09

MCAS, Miramar21Feb 09

Camp Pendleton25 Feb 09

Camp Pendleton25 Feb 09

Vanderberg AFB1-2 May 09

Vanderberg AFB1-2 May 09

Los Angles AFB26 Feb 09

Los Angles AFB26 Feb 09

Beale AFB7 Jan 09

Beale AFB7 Jan 09

Parris Island,MCAS

24 Feb 09

Parris Island,MCAS

24 Feb 09

Fort MyerMay 09(?)Fort MyerMay 09(?)

WRAMCMay 09(?)WRAMCMay 09(?)

Fort Belvoir24 Jan 09

Fort Belvoir24 Jan 09

Fort Meade10 Mar 09

Fort Meade10 Mar 09

Andrews AFB18 Feb 09

Andrews AFB18 Feb 09

Bolling AFB22 Jun 09

Bolling AFB22 Jun 09

NAB Little Creek25 Feb 09

NAB Little Creek25 Feb 09

Air Force Marine Corps Navy Army




FINRA Military Financial Confidence Survey Released 19 February 09 Purpose: capture military’s attitudes/perceptions about

retirement/finances Most pressing financial issues:

Other10%

Children's Education

6%

Rent/Mortgage5%

Emergency Fund7%

Making Ends Meet18%

Paying Down Debt29%

Retirement25%




FINRA Military Financial Confidence Survey

Conclusions:

– Military more likely to take an active role in financial planning

– Military has more realistic view of financial requirements/preparations

– More outreach required to raise awareness of TSP

– Military financial educational programs and services are positively influencing financial behavior




Great News! Military Money magazine Fall 2007 Americans Well-Informed on Automobile Retailing Economics

(AWARE) reports:“America’s military personnel are particularly prepared for this major

financial event in their lives, more so than Americans in general….they are more likely than the average consumer to understand the process of buying and financing a vehicle, and to spend time researching their options”

0

5

10

15

20

25

30

35

40

45

1 2 3 4

Military

General Pop

1-Credit Card, 2-Vehicle Financing, 3-Furniture/Appliance Financing, 4-Home Improvement Loan

Military MembersResearch Financing

OptionsRespondents who

Completed > 3 hrs ofResearch




How Defense Credit Unions Can Help Continue to provide innovative, low cost products & services

– Incentivized Savings programs (Military Saves?), loan products, ATM fees; SHORT TERM LOANS (to replace payday lending alternatives)

Be accessible Be proactive in providing educational services

– Step up financial educational opportunities– Meet with installation/unit leadership– Know your installation Personal Financial Manager– Attend events, clinics, picnics (Ask about Financial Roadshows at your

base) Make appropriate referrals

– Military One Source, other DoD financial partner resources Know, understand Service members and families

– Local demands, stresses of deployment– Unique challenges




Join us to help Service members and Families make sound financial

decisions.

Thank you for your 46 years of service to our Military!




Questions?

CDR Dave Julian

Director, Office of Personal [email protected]

703-908-6236

cdr dave julian (director, personal finance)

Economy & Finance

financial education

financial pillars

financial issues

youth financial readiness

financial roadshows

financial counseling

military onesource military

military saves