This guide contains financial "rules of the road" based on the personal experiences of

First Sergeants and Personal Financial Management Program Managers


Table of Contents


Managing Your Checkbook


Managing Your Money


Managing Your Spending


Take Advantage of Opportunities


Symptoms of Financial Difficulty


Credit Card Quiz


Common Cost Cutters




Set a minimum checking account balance you will not spend below. This ensures funds are always available to cover errors or emergencies.


Immediately record all financial transactions in your checkbook register. The longer you wait, the greater the chance you'll forget.


Never "round off" numbers when recording financial transactions in your checkbook register.


Whether using fingers or a calculator, always do your math twice.


Most financial facilities place an easy to use balancing sheet on the rear of their monthly statements. Get in the habit of balancing your checkbook when you get yours. Also, review your statement to ensure there are no mistakes in deposits, withdrawals, etc.


Make sure you subtract all monthly service charges for banking, ATM usage, transfers, etc., as they are incurred.


Never write a check if the money isnít there to cover it. Doing so could make you subject to nonjudicial or judicial punishment.


Deposit, withdrawal, ATM or money card receipts should be saved as part of your financial records. If you don't have the receipt, you can't effectively dispute errors.


Notify your financial facility immediately if you lose your checkbook (or a credit card). They'll stop payment on outstanding checks and your money will be protected. Make sure you contact creditors and inform them that payment has been stopped on the checks and that new ones will be issued.


Never post date a check. If the payee cashes it prior to the post date, the bank may process it. If this happens, you may have a bad check and service charges to pay.


Use only one checkbook if you and your spouse write checks from the same account. Two check books means two sets of numbers to match and balance. This is especially true if youíre serving on a separate or remote tour and your financial facility is in the states. Financial facilities use electronic clearing to do business, which means checks clear accounts the same day they're written. However, bad check notices are sent through the postal system. You can write a lot of bad checks before you receive a letter of notification on the first one you wrote. This can mount up to a lots of service charges and other problems.


Always write checks in ink, never in pencil, or other erasable medium.


Never write checks with the intent of making a deposit at a later date. Again, most financial facilities use electronic clearing, which means checks clear accounts the same day they're written.


Never write a check leaving space(s) blank. If the wrong person gets it they could change your entries.



Develop a system for paying your bills. Have things organized and itíll save you time and eliminate the chance of bills being over-looked or forgotten.


Shop around for the best financial facility. Compare interest rates, finance charges, service fees, variety of accounts available, etc.


Open a personal savings account and start an allotment. Don't count on making deposits yourself. More times than not, you'll forget to do it or spend the money before it reaches your account. Remember, always pay yourself first.


Begin planning for your children's future by opening individual personal savings accounts. Just like your account, use the allotment system. Remember, this is their account, it's not to be used for Christmas, birthdays, etc.


Match your savings account with your career progression. When you receive a promotion, annual pay raise, etc., raise your savings allotment by half the increase. That way you receive some incentive-and so does your savings account.


Establish a "WANTS" and "NEEDS" list. Make a list of everything you think you want, would like to have, or need. Now prioritize the list-number one through the last item. Next, on a separate piece of paper draw two columns. Label one side "WANTS" and the other "NEEDS". Now take your prioritized list and break it down into those things you want (VCR, TV, stereo. etc.) in one column and those you need (food, clothes, etc.) in the second column. Be realistic. Once you have your list, and you're happy with it, you're ready to start. Begin by purchasing your needs first (as the funds are available). Only after you have your needs, can you start looking at that wants list. This works for long or short range purchases.


Establish a budget you can live with. Make an in-depth list of current monthly expenditures (bills, food, clothes, vehicle expenses, etc.). Be realistic. Take your Leave and Earning Statement (LES) and subtract taxes, allotments, etc., to arrive at the pay you can spend. Next, apply your money against those required monthly expenditures. If there is money left over, it goes into the savings account. Contact your first sergeant or the base Personal Financial Management Program (PFMP) Manager if you have problems establishing a budget.


If you're beginning your first household, don't try to get it all now. Apply your "WANTS" and "NEEDS" list to purchase what you can afford. Apply your budget to save for the rest. Remember, there are normally facilities on base that can help you in the meantime. Don't go out and rent a home full of furniture. Take your time and get what you want the first time around. If you don't, you'll find yourself replacing most of it before you want or have to.


Split monthly payments between your first and fifteenth pay periods. Overloading one may leave you short of funds till the next.


Save all important financial documents, receipts, and canceled checks for a period of 5 years. You never know when the Internal Revenue Service (IRS) will want to conduct an audit or when you'll need the information for some other purpose(s).


Review your LES each month. You can prevent many financial problems by simply ensuring you're receiving the correct entitlements. You should review your tax status to adjust take home pay when you have a change in status (married, divorced, etc.). Check your exemptions. Don't leave yourself short during the year just to get a large return come tax time.




Never write checks just prior to a payday when funds aren't there to cover them. By doing so, you are taking a chance in the mail system, the creditor, and the financial facility.


Always pay your debts. If you find yourself in a position where you can't pay the amount due, contact the creditor, inform them of the problem, and attempt to work out a payment arrangement. Most companies are happy to work with you if given the opportunity. But once you make an agreement, ensure you stick to it. The worse thing you can do is fail to show good faith.


Maintain only one major credit card. Destroy your Sears, JC Penney, etc. The one remaining card should be used only in emergencies. Everyone agrees plastic money is convenient. However, it's not a smart way to shop. Credit cards encourage impulse spending. Using cash will decrease your impulse to buy things that "looked good" at the time


Get a small book and track every penny you spend for 30 days. At the end of the 30 day period review the results. Youíll be surprised at how much you waste on sodas and other non-essentials. Doing this periodically will help you keep tighter control on you hard earned cash.




Use food stamps and/or Women Infants and Children (WIC) programs if eligible. There is no shame or stigma attached in taking care of your family. Remember, you pay taxes to support these programs. Your Family Support or Commuity Center normally has information and points of contact on these programs and will assist you.


Contact the base PFMP Manager prior to making major purchases or entering into rental agreements. Most conduct some type of financial management training to help you better manage money and take advantage of financial opportunities.


Ensure your investments are in line with your career plans. As your savings account grows start to consider other avenues of investment to increase tax exempt status, interest rates, etc. These include, but are not limited to, savings bonds, Individual Retirement Accounts (IRAs), Mutual Funds, etc. Remember, your goal is to be financially independent and to ensure the financial welfare of your family.




- You worry about money a great deal and money arguments have increased in your household. You are forced to reduce credit payments to pay food and housing expenses.


- You have no reserve cash or liquid assets to meet emergencies.


- You find it harder and harder to save. Your savings account shows more withdrawals then deposits; you cash in savings bonds long before they mature.


- You can't figure out where your money goes. You don't believe you spend it foolishly, but there's not much to show for all your outlay.


- If your checking account has an overdraft loan feature, you use it frequently.


- You depend heavily on extra income-bonuses, overtime, moonlighting to get you over the rough spots.


- You use credit to purchase things like clothing that you should have anticipated the need for and that you previously bought with cash.


- Bills once paid promptly are now shuffled to the bottom of the pile. You wait a longer and longer time to pay them.


- You pay only the minimum amount due each month on your charge accounts. You have accounts all over town.

- You tend to be late in paying bills; you "shuffle" them around, paying some creditors this month and others next month.


- You take out a new loan to pay off old ones, thereby, extending the payment time.


- You're spending more than 20 percent of your take-home pay to pay off debts (excluding mortgage payments).


- You don't have enough reserve to tide you over a major upset like a pay cut. You aren't prepared to replace big items like household equipment.


- You rob Peter to pay Paul. For example, you dip into funds accumulated for insurance premiums to pay the water bill.


- Youíve lost track of what your debts add up to. You have to scrounge for money to make monthly payments, and because you use a lot of credit, the balances owed don't seem to decrease much.


- Some of your creditors have started sending you reminders about overdue payments.


- You need more than 12 months to pay off your total credit indebtedness.




- Do you own five credit cards or more?


- Do you use credit cards without calculating exactly what they are costing you?


- Do you tend not to keep good records of credit card purchases?


- Is the average annual interest cost of your credit cards higher than 20 % when all extra fees are added in?


- Do you pay only the minimum 2 % to 5 % of your outstanding credit card balance per month?


- Does 15 % or more of your monthly net income go to paying off credit card bills?


- Do you use plastic to pay for everyday expenses such as food and utilities?


- Do you apply for higher limits or new cards so that you can continue borrowing?


- Do you play revolving roulette by using cash advances from one card to pay the minimum 2 % to 5 % on another card?


- Do you charge things on the assumption that your future income will exceed what you earn now?


- Total your "YES" answers and score yourself using the below guidance:


..--1-2: You have a latent tendency for card abuse, but there's hope for you. Cut back and save!


..--3-4: You have an unhealthy attachment to plastic that needs special attention.


..--5-6: Your credit profile is in desperate need of plastic surgery--but before your credit line vanishes, could I possibly interest you in some stock in my rock candy mine in Montana?


..--7-9: Youíre probably drowning in a sea of red ink and may want to consider a Chapter 11 snorkel. See your lawyer.


..--10: Some photophobic guys in loud checked suits are probably measuring you for concrete galoshes. I recommend you change your name and move to the Virgin Islands.





Cook on range top instead of oven when possible in summer

Use no heat drying cycle on dish washer

Lower water heater thermostat to no higher than 140

Close damper on fireplace

Take quick showers or fill tub 1/4 full when bathing

Change AC and furnace filters often and do regular maintenance

Control AC thermostat and close drapes when possible

Call the local electric company for a home energy survey

Buy middle of the line appliances-donít by unneeded features

Fluorescent lighting uses less energy than incandescent



Change oil regularly, check fluids and tire pressure often

Keep up regular maintenance-it saves in the long run

Compare car insurance policies-be neither over or under insured

Take defensive driving class to lower insurance rates

Take basic auto mechanics and maintenance class

Drive the speed limit to avoid tickets and save gas

Avoid fast starts and stops-saves gas and tire wear

Consolidate trips and share rides or ride bus when possible



Shop alone and never when you are hungry

Shop once a week and limit your time for shopping

Study ads and plan weekly menus around specials

Shop with a list made from your planned menus

Use coupons but only for items you would normally buy

If buying large quantities, divide and freeze remainder

Compare prices of size products-notice unit prices

Buy fruits and vegetables in season

Shop at day-old bakeries for bread products

Let one or two all-purpose cleaners take the place of many

Eat out less often and avoid beverages and desserts

Use lunch facilities like microwave and refrigerator at work

Stretch ground meat by adding crumbs, oatmeal, or wheat germ

Buy generic or store brands whenever possible



Avoid garments that require dry cleaning or special care

Shop at discount stores or resale shops

Make your own chain of "hand-me-down" friends (especially kids)

Buy conservative clothes that will stay in style

Shop sales but donít buy just because itís cheap

Sew and mend garments