My Review of the Mandatory Financial Literacy Training for Military Members | Military Money Manual Podcast Episode 94

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In this episode, Jamie goes solo to give his review of the latest mandatory financial literacy course he received through the Air Force.

Military Money Manual Podcast Episode #94 Links

Military Money Manual Podcast Episode #94 Transcript

Jamie: [00:00:00] Congressional law requires military members to receive financial literacy training at certain benchmarks in their career. I just completed some of this training this week and my overall review, it's helpful in a step in the right direction. It's certainly worth your time and you should encourage your co-workers to knock it out as well.

Hi, podcast fans all over the world. Jamie here. 

Today, I'm going to be taking a few minutes solo to discuss and review some financial literacy training I just went through. Before I jump in, if you find value out of these podcasts, please take a moment to rate and review the podcast on Spotify or Apple or wherever you're listening to the podcast. It helps us reach more military families and helps others find our podcast. 

Okay. What is financial literacy training and why do we do it? First of all, it's required by U.S. law. Title 10, section 992 added a requirement for financial literacy training for military members. It says things like the secretary, service secretary in this case.

Shall carry out a program to provide comprehensive financial literacy training on the following topics, financial services that are routinely offered by private sector sources to military members, practices related to the marketing of private sector financial services to members. And basically anything else that this secretary considers appropriate, you're going to be required to do this training and each branch will do it a little bit differently.

I'll talk a little bit about my Air Force experience through this training today, but all of the services by law have the same triggers or benchmarks for when they require you to do this training. Those are upon initial entry, at your first duty station when you arrive and upon arrival at each subsequent duty station in the case of a member E-4 or below or in the pay grade of O-3 or below.

[00:02:00] Anytime you are promoted if you're E-5 or below or in the pay grade of O-4 or below, you'll go through this training. Additionally, when the service member vests in the Thrift Savings Plan or the TSP that comes basically 25 months of service, two years after your service began, you're vested in the TSP. And then also when the member becomes entitled to receive continuation pay.

Lastly, during a major life event, such as marriage, divorce, birth of a first child, or a disabling sickness or condition, as well as during leadership training, during pre and post deployment training, and then at transition points in your career, like transitioning from regular to reserve component, separation, or retirement, and as a component of periodically recurring required training that is provided to the military member at the installation.

That's the background of what the training is, why it's required by law, and when you can expect to get this training. Again, each branch will do it slightly differently. For me, at this point where I had required training, I was able to either do a CBT, an online version, or an in person version at the Military Family Support Center.

It took me about 10 minutes total to do this training, and it seems like it probably varies the amount of information based on which reason you're being required to do the training for. So a young soldier or marine or airman will probably have a little more thorough than a mid or senior officer or senior NCO would have.

My course was a quick pre survey, basically just gauging my financial habits and how stressed I was about money and things like that. I took a quick lesson, a video, and then did a post survey. I think the intent of the survey seemed to be that we see where you're at, we educate you a little bit, and then try to see if you are more motivated to track your spending to create a budget and things like that.

This was a very quick video, and then it included two resources, free downloadables, if you will. I'm sure it varies by pay grade, like I said, at least I hope, because this wasn't thorough enough for the average young service member just joining the military. 

[00:04:00] So for my promotion required training, it had a one page flyer and the video that explained the steps that they have about your spending flight plan.

So they try to make it a rocket ship and this cheesy Air Force themed flying explanation. 

The first step was to check your spending plan, destroy debt, accelerate your savings, boost your retirement account, and then get help navigating. And so this is this image of the flyer that was up the rocket ship from check your spending flight plan at the top, then destroy your debt, moving down, accelerate your savings, boost your retirement account, and get help navigating.

It's a pretty decent overview. They're all great points. And so I really don't have much to complain about here. So some things that I saw that were good. It talked about goals and expenses and a spending plan. It addressed the downsides of debt. And it gave some strategies to consider for boosting your savings, like taking advantage of the TSP match if you're under the blended retirement system.

And it also included resources. So those are always things that I enjoy seeing in training. However, some ways I think it could improve is, it is using this 20 percent metric of your income. to decide whether or not you should pay down your debt. So if your debt payments were 20 percent or more of your monthly income, then you should pay off your debt is basically how it reads.

I personally would use a much lower figure than that and encourage you to consider debt payoff as part of your equation, especially if it's higher interest rate debt and not a mortgage debt like a credit card, student loan, or a car loan, or any kind of personal loan. Even if it's not 20 percent of your monthly income, I'd still encourage you to consider paying that off sooner.

It also pushed towards 5 percent of contributions to your TSP. While this is a great start, I would say, don't stop there. There's no reason to limit yourself. For the level of training that I received, I think they should have mentioned higher numbers and pushed people to max out their contributions or at least get closer to there.

They basically went from a 5 percent contribution to make sure you don't contribute too much to where you don't get the match in December. 

[00:06:00]  But there's really no in between or talking about how I get to contribute over $20,000 a year to my TSP. Then the last room for improvement topic is that it wasn't thorough enough to convince me to change my mind between the pre and the post survey.

So if other people are doing this training around a promotion, they're not really getting much. It's a very broad overview. So the data is probably going to show that this training might not be as effective as we want it to be or that we would hope for it. I don't know that they're getting good data because it's such a wave top general discussion of personal finance topics.

The second resource was a sample spending plan, a PDF, and it was two pages fillable PDF. And I really enjoyed this. It has expenses by category, and it gives you the ability to compare your income minus your expenses with a goals column and an actual column. So I think that's good. Compare where you're at.

We've talked about this before with where you want to be, and then you can decide what's important to you. It helps you set goals. At the bottom, it also included a net worth calculation, which is important. We've talked about this in episode number 90. And remember, you can go to militarymoneymanual.com/ep90, and you'll see the show notes that are there as well as a recap of the episode and an outline for how to calculate your net worth.

So I love that they included that in the bonus material and free resources that were part of this training. 

Why listener, why do you care about this? What's the point of this training? You may need help personally, and hopefully some of you here are getting the help you need from this podcast, from resources like the lMilitary Money Manual book or blog. to help your financial situation be less stressful.

But more importantly, your airmen, your soldiers, your marines, your sailors, they need your help as well. And especially if you're a supervisor, you have to be able to talk smartly about what's out there, what's required of them and what resources are available to them, whether they're struggling, drowning in debt or looking to get ahead.

But all of us have been there where we're confused or overwhelmed or behind on bills. And there's likely some of each of those categories in your unit because It's just a microcosm of society and American society is drowning in debt for the most part. The majority of Americans are behind. They're stressed about money and they can't cover emergencies.

So that means the majority of people in the military in your unit probably need help as well. So as a supervisor, especially, but anyone that has friends or cares about people that they're in the dorms or the barracks with needs to know what's out there, what they're learning or what they're not learning.

So maybe you can fill in some of the gaps, what resources are out there and how you can support them. So when you need them to do the mission, they're not distracted. 

[00:10:00] And that's the most important takeaway. And the reason that this training exists is that financial literacy and financial readiness tie directly to military readiness, because if your family is distracted about money, how they're going to pay the gas bill, how they're going to pay the rent, they won't be able to focus on the mission that you need them to do when the nation calls.

Overall, I'd give this maybe a B if I'm being a little generous. It's great that it gets information out there. It hits people at key times, especially when they're new and young and potentially moldable into a more steady and stable financial military member. I like that they give free resources and they're not trying to sell something.

We're not trying to bring in a company that's going to try to sell you their high cost whole life insurance or some 5 percent front load fee or anything like that. It's very unbiased. Just straight facts and give you things to consider and then it has some good resources there. But again, it's not going to be a thorough enough training for everything your unit or your friends need to know about personal finance.

So if you're motivated about money, make sure you keep spreading the good news. Feel free to share the podcast with a friend, send him a copy of the book, loan him a copy of the book. By the way, the Military Money Manual book is available from the DoD MWR library for free on the Libby app now. So that's a great way to spread the news.

And then if you do buy a book, just donate it to the base library when you're done or share it with a friend and ask them to pass it on. So there's lots of resources out there. This training is a step in the right direction, but we still have a long way to go in educating the force and making people feel less stressed and more at peace with their money.

And that sense of financial freedom that I hope that all of you are aiming towards if you're not already there, because money doesn't have to be complicated. It doesn't have to be stressful, and it can really truly enhance your life. And your service in the military once you get a hold of the basic principles and the concepts and make a simple action plan of how to move out in a positive direction.

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