Seeking Financial Advice in Today's Changing Time

In speaking with a young lady at the gym, she and her husband are working hard to save up for retirement.  Both do not have children.  Both are maxxing out their 401k.  Both are working jobs.  Both are concerned about what is evolving in the future.  She has even gone to great lengths to research banks, their rates, and other comparisons in a fancy and well-documented spreadsheet.  I was impressed because the bulk of women I meet are not as sophisticated in understanding their finances.  She simply was asking questions and trying to get some answers. 

Like her, many folks are seeking financial advice but not getting much of any relevant information from bankers, financial advisors or others. 

For military folks, you can contact OneSource for financial advice.  USAA offers financial advice on its member web site page. 

I am certain that there is a person who has the heart of a teacher and a passion for finance to talk to about this topic in your area.  Problem is seeking them out and feeling comfortable. After all, the three taboo topics are religion, politics and finances.  Breaking the silence and disclosing your financial situation is intimidating, but then again it can help you in ways you least expect. 

Food Stamps on the Rise

Altogether, there are now almost 46 million people in the United States on food stamps, roughly 15 percent of the population. That's an increase of 74 percent since 2007, just before the financial crisis and a deep recession led to mass job losses.  U.S. becomes Food Stamp Nation but Is It Sustainable? 

Interesting article about a rising consequence of inflation, unemployment and other challenges that U.S. citizens are experiencing. 

Military families are just as challenged as those working for Walmart. 

Send a Military Care Package that is worth it!

At Survival Straps, I found these cool products but most impressive is their Military Care Packages for $19.95.  You can send a soldier overseas a care package that will definitely make a difference.  Go to SurvivalStraps Military Care Packages.

Standard & Poor's Lowers USA Long Term Rating to AA+ For First Time in 70 Years

On August 5, 2011, the Standard & Poor's Rating lowered the United States of America's long-term sovereign credit rating from AAA to AA+ for the first time in 70 years.  Regarding its short-term rating, the S&P affirmed the A-1+ rating.

Why is this significant news?

The USA is officially entering a new financial era that reflects upon the current behavior and cultural trend that has been evolvling perhaps since the 1960s.  Given the August 2, 2011 passage of the Budget Control Act Amendment of 2011, the US fiscal policy has assuaged immediate concerns about any immediate threat of payment default as the US government continues to encounter political governance that is less stable, less practical and less cooperative between political parties to resolve matters of most importance.  In other words, the United States is heavily debt-laden, and the question of the currency and its valuation to repay the debt is of grave concern.

Standard & Poor's report presents sound financial rationale and perspective on the current outlook.  It is well worth anyone's time or effort to read these unbiased facts.

Concerning military personnel, it is going to be a rocky road between now and 2012 as the government debt burden will go higher and as the baby boom generation marks its draw on social security, medicare and such.  Cuts and reductions are on the horizon for civilian discretionary spending, defense and Medicare. 

Donald Marron presents more interesting financial perspective.  Moody's and Fitch have affirmed the USA's crediting rating at AAA while China's Datong credit rating agency lowered it earlier this week to negative.  Donald is right to expect more US downgrades regarding debt.  There are five countries in the past 30 years who have regained an S&P AAA rating so there is hope for the US to regain this rating but it will come at political crossroad that many are very VERY concerned about.

There will be more news reporting (as well as hype).  Political parties will blame the other.  The American consumer is awakening to a reality that has been evolving for quite sometime.  Question is Will our elected officials in Congress and the Administration be able to work something out?  I am pessimistic at this juncture and am discouraged for my husband and all the men and women who work in the military as well as those hardworking Americans who do work, who do do the right thing and who do NOT sit on their buts and let someone literally feed them with every materialistic item out there.  We may even see taxes rise on both incomes and investments in ways we've not seen for awhile. 

For many who serve in the military, it is likely that many cutbacks will occur as the defense department will downsize the military (now I do not know this for a fact....this is only my opinion).  Perhaps it is raising the military to be more sophisticated and effective by doing more with less.  If you read the Forbes article on where our next corporate America managers are coming from, it is the military.  I believe that serving in the military will rise in prestige as Americans begin to appreciate the high level of quality, education and training these men and women have received.  Life for the military spouse will become more isolating.  Reliance on social networking and certain other networks will increase with importance for the military families. 

Regarding finances and military pay, it is challenging for many to make it without dual income, and for many military spouses, that's challenging to have a career as the military relocates you and your family every 2-4 years. 

In a previous blog, I posted information for disabled veterans and those who have served our country about the Concurrent Retirement and Disability Pay (CRDP). Qualified disabled military retirees will get paid both their full military retirement pay and their VA disability compensation as stated earlier this year.  I believe that there is elevated risk as to how our disabled veterans will be compensated.  There is not much research or information surfacing about this all important financial issue (something that frustrates me for our fallen comrades).  I find it strange that the US government would not provided proper financial support; however, those who were most skeptical about the War in Iraq do not view favorably our disabled veterans and admonish this liability that could potentially increase in costs for many years to come.  I hope that there is a rise in foundations, non-profit groups or grants for disabled veterans that will lend financial assistance and offset an increasing negative sentiment from those who served.  (Currently I am working on another blog article about CRDP).

The best gift that any and all of us can do is to pay off your debt.

Perhaps by starting with the little details that don't seem to really matter we can make a difference and alert Congress and the Administration to the importance of paying off our debt.  Eventually, the S&P credit rating for this wonderful country will rise back to AAA status (or as Warren Buffet eloquently stated....we've been at a AAAA+ rating only to see the slight pullback to AAA).

Shop Back to School & Get Tax-Free Savings

It's back to school time.  Summer is wrapping up yet again.  Many of my dear military friends have PCSed, moved, relocated or taken a new job.  Change is inevitable.  Some change is good.  Some change is difficult to accept.  Some change is not the way I had hoped.

This weekend is tax-free weekend in Tennessee.  Perhaps other states and areas offer this opportunity for folks buying back to school items to save.  Buyer beware on certain items as some are part of the tax free category and some are not.  Each state is different so be sure to check with your local state government. 

Ironically, many retail stores are desperate for your business and are offering to pay state sales tax on any item you purchase. 

Keep in mind that some items made in another country may not be complying with federal regulations.  For example, Crayola is the only product that I purchase when it comes to crayons, sidewalk chalk, markers or other items that my children will use.  It is important to not sacrifice price for your child's well-being.  Yes, certain crayons or sidewalk chalk contain harmful chemicals and several children are known to have develop a severe allergic reaction that is unexplained and leaves the parents skeptical about what to do.

There are several children's consignment sales offering back to school items for Fall/Winter.  This is a great way to make affordable purchases that are tax-free.  Your local Goodwill store, Salvation Army, or other Thrift stores may also offer tax-free savings. 

For us military folks, it's great to enjoy tax-free purchases on certain items while still having to pay a commissary fee or other.  I am certain that there are deals at your local AAFES stores so double-check your prices and see if Walmart or others will match the price. 

Regarding online tax free savings, it depends.  I don't know of any at this time of publication.  On-line buying is convenient and great.  Beware of shipping costs because that is what will up your cost in the purchase.  Some vendors are offering free shipping or site to store free delivery.  I opt for that one over paying shipping costs any day.

International military families may be challenged with certain back to school supplies.  While I am unfamiliar with some items, it is good to go to such sites as Wives of Faith Facebook page or other military related web site pages and even blogs for more specifics. 

Best of luck as you and your family go back to school this fall!  Whether is homeschooling, local public school or base school, and/or a private school, I wish you great success.  Study hard and make people in your country proud!  It's an international world now when it comes to education.

Financial Fallacy

This morning's news echoes what many are questioning....why is the United States developing a financial fallacy with regard to its debt and just common sense management of govenment business?  I believe that the S&P 500 will lower our AAA credit rating. 
For many folks especially the military, this is discouraging news.  I have a difficult time turning on the tv or internet and read these bleak reminders about all the arguing in Washington DC.   Since I can recall back to the 1980s, it made sense to payoff the debt before it went on a credit spiral.  Today, we are experiencing a credit spiral. 

This wonderful capitalistic country is on the verge of something none of our American ancestors would want for us.  These seven points below outline general financial perspective as we encounter an economy that is teetering on the edge of a potential financial disaster.

1. Inflation - we will experience higher inflation than in previous years.  The purchasing power of the dollar is dismal in this type of economic environment.  For those in retirement or about to enter retirement, it means a lower quality of living since the cost of living standard (just to maintain present day cost of living) will be a challenge.  For military families, it means hardship because many are challenged financially.  Relocation with the military is expensive, more so than what people realize.  While there are items provided for, it's still a challenge for many to meet budgets.
2. Jobs - what jobs are being created today?  Manufacturing ventured overseas starting in the 1980s, and today there are fewer manufacturing jobs left in this country.  (Many work part-time  jobs with little to no benefits.)  For those 55+, the ability to get a job is on the decline as youth versus experience is the preference.  For those in the military, there are some cutbacks occurring that will force military families into civilian world and that may mean unemployment.  One couple has been struggling with employment for three years now, and it's a direct result of his military reserve status. 
3. Discouragement - if you shop local pawn shops and thrift stores, you will see a huge increase in traffic buying clothes, shoes and other basic necessities.  Pawn shops are packed full of merchandise such as guns, guitars, jewelry, tools, electronics and more simply because people need money to get food and provide shelter and transportation.  This increased level of activity spells out to me the increasing discouragement that we as a nation are enduring.
4. Money - many are working longer hours with increased job responsibilities for the same amount of pay (or less).  Benefits such as health insurance are changing and costs are rising.  More are having to pay out more in medical expenses than before.  It makes me rethink picking up the phone and calling the doctor's office before incurring that bill.  The bad fact is that I never know what kind of bill I am looking at with medical expenses even when it is for the same routine checkup.
5. Children - parents spend a lot on their children.  With an increase in cost of living, we may see a resurgence of family nights where folks play games or we may see more children left by themselves because of daycare costs as well as working longer hours.  Children consignment sales are very popular as you are able to beat certain thrift stores for good clothing.  Sports activities and other extracurricular activities may see less enrollment because let's face it, budgets are tight and people are tired of these overcompetitive parents yelling at the games.
6. Pets - the animal control centers are seeing an increase in loose pets as a direct result of the economy.  People move and leave the pet wandering to survive on their own.  Pet stores continue to see sales rise; however, more animals are being put to sleep.
7. Nursing home care and hospice - as the bulk of our US population enters the Golden years, it is raising concern for the quality of care.  The elderly are experiencing certain financial challenges. Nursing homes are claiming that elderly person's assets before allowing Medicare to kick-in and are even holding family members financially accountable going back seven years.  In addition to financial challenges, it is common for families of loved ones in nursing homes to encounter abuse of loved ones.  For example, a nurse aid contacted all family members and asked for money for their loved one.  She did not realize that the family she was conning was one full of attorneys, military officers and educated people who called her bluff.  While her jail time was next to nothing, she will try this again. 

While the outlook appears bleak and discourages those of us who are hardworking, exercise our right to vote as a U.S. Citizen, and are doing what's right (i.e. not into drugs or other bad behavior), it is important to understand this season of life that the United States faces.  Who knows, we may be revisiting the time of Ninevah where a higher power is exerting influence to get our attention.