Paying Attention to Your Personal Finances Pays Off


120828-N-NU634-064 Seaman Kenneth Wood, from Toledo, Ohio, prepares to put money on a Navy Cash card aboard the guided-missile cruiser USS Hue City (CG 66), Aug. 28, 2012.

Seaman Kenneth Wood, from Toledo, Ohio, prepares to put money on a Navy Cash card aboard the guided-missile cruiser USS Hue City (CG 66), Aug. 28, 2012. (U.S. Navy photo by Mass Communication Specialist Seaman Darien G. Kenney/Released)

“Military Saves” Week will be observed throughout the Fleet from Feb. 25 to March 2. The week promotes financial awareness and encourages service members and their families to take control of their finances. In this blog, Tim McGough, Commander, Navy Installations Command Fleet and Family Readiness Programs Communications Liaison, shares his experience and explains why paying attention to your finances pays off.

I came from Japan after a three year “tour” as a general service worker at Naval Air Facility Atsugi. I had followed the Military Saves advice of having a savings account for things I need and in case of an emergency. I saved more than three months of pay.

It was awesome. I had a great job and my bank account was full and growing. I was sending money home every pay day, paying my bills and making a house payment. Soon enough, my family wanted me to come home because I had been overseas for more than half of my active duty career. “Ok, I will come home but I need a job.” I applied for a job and, after a few interviews, I was hired in Washington, D.C.

D.C. is not where I am from, but it was close enough. I took an apartment in Virginia, put my house on the market and looked into buying a house in the D.C. area. That’s where it went “south.”

Once I got my family to the district, I had the great idea to put them all in a one bedroom apartment. I know you are thinking that I am an idiot. I agree and my wife reminded me of that almost daily. I was now paying for a mortgage, rent, cable, phone and car payment, to name a few. My credit was good because I kept an eye on it and made sure everything was paid on time. I had hired a realtor in Virginia and I was in the process of hiring a realtor in Maryland. In the process of hiring the Maryland realtor, she informed my wife and I that the purchase of a new home was on the contingency of the sale of our home in New York. I guess my financial status was not as good as I thought.

Well, my realtor took pity on our situation and found us a new home. The kind-hearted builder said we could move in with a small deposit with the understanding that we were going to purchase the home. We agreed. Man, anything to get out of that apartment with four people and a dog.

Finally, we sold the house in New York and didn’t take too much of a bath. Now, here is the kicker.

The day we were going to closing, my mortgage representative said, “What happened? What did you do? When you first came and I checked your credit score and debt-to-income ratio, you were great! Now, your credit is messed up and we can’t close.”

Needless to say, I felt like I let everyone down, especially my wife who I had promised a big house with a walk-in closet 24 years earlier.

The first person I went to counseling with, besides the Almighty (believe me I got down on my knees and prayed for a miracle), was my Fleet and Family Support Center Financial Management Program manager. I took all my paperwork and credit reports. He said the same thing. “What happened?”

Well here is what happened. I was watching the river flow while real life was happening.

I was making my rent payments and all my other bills on time. The problem was that I was using my credit cards and my savings because I had some family issues that needed to be taken care of and we needed other things for the new house. I didn’t pay attention that more money was going out than coming in. I usually watch that, but I got complacent and comfortable. In short, I wasn’t paying attention. With money, that can be devastating and it almost was.

How was I going to fix this without losing my new house?

Ok, back to my Navy Financial Management Program manager. He took me to a room where we could talk privately. I don’t like to talk about finances in public as you can tell.

He looked at my pay and any other money coming in and then my debt. He counseled me on financial practices and how to be disciplined and focused on paying off my creditors. One thing that I will never forget is that he told me, “Why are you giving away your money to your creditors? All that interest you are paying should be going in your account.”

The light came back on!

So I took the money I had, not all of it, but enough to make a significant dent and cleaned up my credit cards and line of credit. Well, low and behold, I got a call from my mortgage company representative saying once again, “What did you do? Your credit score shot up and we can now go to closing on your house.”

Now, I am enjoying my new home and can think of three things that I will never forget. Never stop paying attention to my finances, keep saving my money and visit my local Navy Financial Management Program manager more often to keep up on the best ways to save, protect and increase my finances.

Have you seen yours lately? They’re waiting for you to help you and your money. The best thing about it is that it’s a free service.

Don’t forget this week marks Military Saves Week. Watch this video to learn how you can benefit.

How well do you manage your finances?