Spouse Calls: Military-minded financial advice

As military families, do we need to worry about the current economic downturn? After all, we have health coverage, a retirement plan and at least one member of our family has job security.

“A phrase I use often is: Sticking your head in the sand is not a plan,” said June Walbert, a certified financial planner with United Service Automobile Association. June’s financial advice turns up on AFN, CNN, The New York Times and other outlets. She visited Germany and Italy this month to conduct financial seminars for military families.

A conversation with her reminded me that we need a financial plan just as civilians do.

“Over the years, I have just realized that that the military is a slice of Americana,” said June, who is also an Army reservist. “They have a lot of the same questions, issues and challenges.”

Financial planning is for the present and the future. June said a budget is a “cornerstone,” no matter what your pay grade.

“I really believe in budgets,” she said. “It gives you more choices about what to do with your money. You can have fun with it today or save for the future. Neither answer is wrong, but it needs to be a conscious decision rather than just letting it happen.”

An important component to any budget, she said, is a little “fun money.” I like the way she thinks.

“We need to do more than buy gasoline, pay rent and utilities and buy groceries,” she said. “We need to go out … have some entertainment in our lives. It needs to be a line item in the budget.”

While June described herself as a “glass-half-full person,” she said it is important to plan for bad financial times.

“I always tell people to think about worst-case scenario,” she said. “You always have to ask yourself, ‘What if ?’ ”

An emergency fund is one answer to that question. June’s suggestion for military families is to have three months of living expenses tucked away in a savings or money market account. Without this buffer, she said, emergency spending may result in credit card debt.

But what about investments? When people ask June if they should continue investing in spite of poor market performance, she gives an enthusiastic “Yes!”

“The market does what it is supposed to do; it goes up and down. And what we want to do is invest on a consistent basis and take advantage of some of the down times” when prices are low, she said. Waiting for a better market to invest means buying when prices are higher.

June recommends long-term investment in mutual funds, maintaining a balance between conservative and more aggressive investments. Investors should review that balance each year, but not make major changes based on the bears and bulls, she said.

June said she was encouraged by the tenor of discussion during her recent seminars in Europe.

“I have heard a lot of positive financial stories from military spouses. They are so interested in understanding and managing their finances,” she said. “They have taken advantage of the financial windfall of deployment and are wondering what to do with their excess money. They’re reading and thinking and making smart financial decisions.”

June said this is wiser than making large post-deployment purchases. Instead, she urges military members and families to think about the future.

“Stop and think about what makes the most sense for them and how they should use that money,” she said.

For more of our conversation and June’s advice, see the latest post on the Spouse Calls blog.

Terri Barnes is a military wife and mother of three. She and her family are stationed in Germany. Spouse Calls appears weekly in Stars and Stripes. Write to her at spousecalls@stripes.com and see the Spouse Calls blog here.