Mismanagement Of Personal Finances And Its Impact on Naval career

[8404]

Some Navy Enlistment Classification's, NEC's require a 'security clearance' in order for the Sailor to perform the duties and responsibilities of that job. Imagine having that security clearance revoked, because they are experiencing financial difficulties or developing a history of not meeting financial obligations!

I recently learned of a Sailor, (not in the medical community) who had their security clearance revoked and can no longer perform the duties of their assigned NEC for this very reason. This can impact a Sailors advancement, ability to work within assigned NEC and their entire Naval career. See Article 134—(Debt, dishonorably failing to pay) of the UCMJ:

Read below:

RAAUZYUW RUENAAA1099 2221745-UUUU--RUCRNAD.
ZNR UUUUU ZUI RUEWMCE3993 2221741
R 101744Z AUG 07 PSN 049231K19
FM CNO WASHINGTON DC

TO NAVADMIN
ZEN/NAVADMIN @ AL NAVADMIN(UC)
INFO ZEN/CNO CNO
BT
UNCLAS

SUBJ: MISMANAGEMENT OF PERSONAL FINANCES AND ITS IMPACT
FM CNO WASHINGTON DC//N09//
TO NAVADMIN
BT
UNCLAS//N07000//
NAVADMIN 198/07
MSGID/GENADMIN/CNO WASHINGTON DC/N09/JUL//

SUBJ/MISMANAGEMENT OF PERSONAL FINANCES AND ITS IMPACT//

REF/A/DOC/SECNAVINST 5510.30B/06OCT2006//
REF/B/DOC/CNO LTR/12SEP2006//
NARR/REF A IS DEPARTMENT OF THE NAVY PERSONNEL SECURITY PROGRAM (PSP)

INSTRUCTION. REF B IS LETTER FROM CNO REGARDING IMPLEMENTATION OF ADJUDICATIVE GUIDELINES FOR DETERMINING ELIGIBILITY FOR ACCESS TO CLASSIFIED INFORMATION.//

POC/MADDOX-STUBBS/NA/N09N2/WASHINGTON, DC/TEL:202-433-8853//
REMARKS/

1. REF A ESTABLISHES ADJUDICATIVE GUIDELINES FOR ALL U.S. GOVERNMENT CIVILIANS, MILITARY PERSONNEL, CONSULTANTS, CONTRACTORS, LICENSEES, CERTIFICATE HOLDERS OR GRANTEES AND THEIR EMPLOYEES, AND OTHER INDIVIDUALS WHO REQUIRE ACCESS TO CLASSIFIED INFORMATION AND/OR ASSIGNMENT TO SENSITIVE OR NATIONAL SECURITY POSITIONS AS IMPLEMENTED BY REF B.

2. THE DETERMINATION OF GRANTING AND THE CONTINUANCE OF ELIGIBILITY OF A SECURITY CLEARANCE IS CONSISTENT WITH THE INTERESTS OF NATIONAL SECURITY AND IS BASED ON NUMEROUS GUIDELINES TO INCLUDE FINANCIAL CONSIDERATION.

3. FINANCIAL CONSIDERATIONS HAVE BECOME A MAJOR CONCERN, 78 PERCENT OF THE DEPARTMENT OF THE NAVY DENIALS/REVOCATIONS OF CLEARANCES WERE DUE TO POOR FINANCIAL MANAGEMENT. CONDITIONS THAT COULD RAISE A SECURITY CONCERN AND MAY BE A DISQUALIFYING FACTOR UNDER THE CONTINUOUS EVALUATION PROGRAM ARE:

A. A HISTORY OF NOT MEETING FINANCIAL OBLIGATIONS.
B. DECEPTIVE OR ILLEGAL FINANCIAL PRACTICES SUCH AS EMBEZZLEMENT, EMPLOYEE THEFT, CHECK FRAUD, INCOME TAX EVASION, EXPENSE ACCOUNT FRAUD, FILING DECEPTIVE LOAN STATEMENTS, AND OTHER INTENTIONAL FINANCIAL BREACHES OR TRUST.
C. INABILITY OR UNWILLINGNESS TO SATISFY DEBTS.
D. UNEXPLAINED AFFLUENCE.
E. FINANCIAL PROBLEMS LINKED TO GAMBLING, DRUG ABUSE, ALCOHOLISM, OR OTHER ISSUES OF SECURITY CONCERN.

4. INDIVIDUALS WHO ARE ENTRUSTED WITH ACCESS TO NATIONAL SECURITY INFORMATION MUST ENSURE THEY AND THEIR SPOUSES ARE AWARE OF THE IMPACT POOR FINANCIAL MANAGEMENT MAY HAVE ON THEIR ABILITY TO MAINTAIN ACCESS TO NATIONAL SECURITY INFORMATION AND IN SOME INSTANCE THEIR CAREER. THERE IS ASSISTANCE FOR INDIVIDUALS WHO MAY FIND THEMSELVES IN FINANCIAL TROUBLE.

5. THE NAVY FLEET AND FAMILY SUPPORT CENTER PROVIDES A VARIETY OF FINANCIAL SERVICES WHICH INCLUDE PERSONAL FINANCIAL COUNSELING, SETTING UP A BUDGET, AND CHECK BOOK BALANCING CLASSES. CIVILIAN EMPLOYEES SHOULD BE REFERRED TO THEIR LOCAL PERSONNEL OFFICE FOR THE EMPLOYEE ASSISTANCE PROGRAM FOR FINANCIAL ASSISTANCE.

6. ASSISTANCE IS AVAILABLE, DO NOT WAIT UNTIL IT IS TOO LATE, GET HELP AT THE FIRST SIGN OF FINANCIAL TROUBLE, IT MAY JUST SAVE YOUR CAREER.

7. RELEASED BY ADMIRAL PATRICK M. WALSH, VICE CHIEF OF NAVAL
OPERATIONS.//
BT
#1099

NNNN

[HMC-FMF-PJ]

But MTV says life is all about the bling, the salesman promised no payments for a year and my credit card company says charge it. After all, life takes Visa and the TV commercial teaches me that I am not cool unless I use plastic to pay for all my purchases. I can always get a paycheck advance at 250% finance charges, but I can just put that on my other credit card...

[HMC-FMF-PJ]

Financial problems are seldom caused by how little you make and most often caused by how much you spend. And all those "little" purchases that don't make a difference quickly add up to really big bills in very little time that make a big difference.

$6 fancy coffee x 7 days a week x 52 weeks a year = $2,184 in fancy coffee

Of course, such "costs" become much higher when you add in convenience fee's, finance charges, and other expenses associated with using debit cards and credit cards.

[HMC8404]

PJ ... I would put that kind of information in black and white for a lot of people sent my way at my command. I used to be a Financial Specialist as one of my collateral duties, and everyone who had a creditor hounding the command was sent my way to be put on a budget to help them out.

In the beginning I would be surprised how many of them were ignorant to their ways ... but then it was the majority of them. Just total ignorance as to why they couldn't keep up with their bills. When I would sit with them down and tally up their daily "habits" for them and show them the costs of those same daily habits? Oh, the looks on some of these guys faces were pure shock when they realized how much of their money they were pissing away on their daily sodas, coffee, cigarettes, fast food lunches, magazines/newspapers, and daily lottery tickets. It was sad to see that they had no concept on just what they had been doing. You think it's common sense, but its not. Add things up like that, and it puts those kinds of spending habits into a different light for those folks. I would demonstrate their daily habits as a daily total, then show it as a weekly total, then a monthly total and ending with an annual total. Some were mortified of their stupidity when they saw just how much all of those habits cost them, but there were those that couldn't care less either. This wasn't always the junior enlisted, I often got the younger officers in there as well.

People, not just active duty, just don't realize how much a hole in your pocket will end up costing you your budget in the long run every day.

[8404]

Excellent information:

If people would take just one half of that 'pissed' away money and invest it, everyone would be surprised what the power of 'compound interest' can do.

Also, the stimulus money coming to many Americans, think about socking away just one half of that money into some form of investment, IRA, TSP account etc... Saving is 'key' for tomorrow's retirement.

What you save today, will determine how you will live in retirement.

Food for thought!

[HMC-FMF-PJ]

From the first cartoon watched, virtually all music videos played, and just about every commercial on TV, Americans are taught to be non-savers, bad consumers and practice poor purchasing habits.

I had a classmate living paycheck to paycheck that ended up paying around $36 for a $5 hamburger meal purchased with a debt card. He got the extra large soda and forgot about the transaction fee/convenience fee the restaurant charges. It wasn't much, but it was enough to empty his account. Rather than reject the purchase, the bank actually likes those transactions because they are so profitable.

He got nailed with an insufficient funds charge because he did not have enough money in his account to pay for the meal. He was only a few cents short but the bank automatically loans him $20 because that is their minimum amount for a cash advance. Since the purchase went through without any indication of a problem, the guy didn't realize something was wrong until the end of the month when he got his bank statement.

meal + XL soda + sales tax + debt card transaction fee
insufficient funds charge
cash advance fee
1 month finance charge on cash advance (I forget APR, but I think it was 24%)

With all the fee's and charges it put a bigger hole in his budget. I can't remember if he bounced a check because of it or had to make a late payments to avoid bouncing a check.

He could of avoided it all by using cash or by setting up his debt card to reject purchases when there is not enough money in his account. Or maybe if he could learn to save a few dollars so he has a cash cushion in his account to help him make it through the rainy days. We all know it is going to rain but if you aren't ready for it you are going to get soaked.

[HMC8404]

I don't use a checking account debit card anymore. I have been a member of Navy Federal Credit Union now for over 25 years and I don't have a credit/debit card there anymore, just my savings and checking account.

Instead I have a Western Union debit card.
http://www.unsecured-credit-cards-style.com/i/c/western-union-prepaid-mastercard.jpg

Because I alotted for a predetermined amount of my pay to be directly deposited into it's account (the account will hold up to $999.00), I don't get charged a monthly fee. The only fee I get charged is a $2 ATM fee (added to any additional ATM fees by that particular machine). But I have an ATM at work that has no fees for us employees, and if I choose to get some money out that way instead of 'cash back' after a store transaction, then I withdrawal from work. But I tend to use this for my shopping. If I don't have the money to buy something, I simply don't. There's no chance of having any banking fees added to my card transactions because this is not associated with a banking account.

I use my checkings account for automatic withdrawals for my car insurance, water and gas bills, and checks for my monthly rent and weekly church offerings. This way the checking account will not get confused with other purchases.

And you are sooo right PJ ... we are taught to be irresponsible consumers from the beginning as children. Ever watch those commercials between your kids cartoons?

This is something us parents need to do with our kids from the very beginning as well. We need to teach them to be responsible with their money. We need to teach them that they need to control their debt by spending responsibly. If you don't have the money and cannot pay back a loan/credit card for said item reasonably ... then you JUST DON'T BUY IT (or save up for it the old fashioned way). Above all else ... teach them to save save save for that rainy day! We can start with their allowances. I put 50% of my daughter's in a bank account for her. It's not her choice. Thus I'm teaching her to save and she has adjusted, as we all do when circumstances change for our incomes, to knowing the amount thats coming in. We can take small steps with our kids when they're younger to help guide them.