Military Money and Finance

THE ECONOMY AND YOU
Managing Military Budget Cuts: Sequestration, Military Pay and More

The 2013 sequestration of the military budget is predicted to have widespread impact on many aspects of day-to-day military life for many years to come.

With most federal budget cuts going into effect starting in 2014, sequestration will be phased in, continually adjusted and revised.

The federal government has mandated one of the biggest sequestrations of all time: $1.2 trillion in mandatory cuts - and half of these budget cuts will be from the military (the other half from domestic programs).

The sequester will now go into effect starting in 2014, slashing more than $500 billion from the military alone. The defense industry, Pentagon advocates and military contractors around the country continue lobbying hard against it.

Will Sequestration Affect My Military Pay?

Rest easy: military pay and allowances are protected. All military paychecks will still be paid on time, and basic allowance for housing (BAH) plus other military pays will continue uninterrupted. Military retirees and survivors will also continue to receive their payments and annuities.

ECONOMIC PLANS

Create your own spending plan. If you were a business, you would be required to submit a balance sheet at the end of each month, to determine your financial status. So, treat yourself like a business. Keep track of your income and your spending and reconcile it each month.

FINANCIAL READINESS

Military financial readiness programs are not only popular, but mandatory at first-duty stations and they are often offered free of charge. "Financial Peace University," is one such financial military readiness educational offering.

SAFE LENDING

Financial scams and predatory lending against servicemembers and veterans are so common that the Arizona attorney general has created an advisory board to stop it. Payday loans, something regulated by both the federal and Arizona governments, are another problem the state is looking into.

PAYDAY LOANS

It can start out with just a small $200 loan till your next military paycheck; but the downward spiral begins when a military family starts the next military pay period in debt. Military family finances, credit ratings and debt management can all be easily and quickly destroyed with one payday loan.