Government Shutdown Lessons Learned

I have refrained from publishing my personal opinion on the Government Shutdown, what led to it and who is to blame, but I thought it was necessary to publish some lessons learned from it and how it impacts your personal finances.

· Emergency Savings - I joined the military because of the "security" and the "guaranteed paycheck", among other benefits.  This is no longer a benefit and the security of our pay has been affected by Sequestration, the Government Shutdown and we'll see from here.  It is required by law that military members must be paid for services completed; however, there is no law that states when we must be paid.  Luckily for us, Congress passed the Preservation of Military Pay Act to ensure we got paid.  For this reason, having an emergency savings available would help alleviate any short-term disruptions to your pay.  If our pay was delayed for a long time, you could rely on this emergency savings.  Having an emergency savings account is usually the top of any personal finance recommendations.

· Tuition Assistance (TA) – If you’ve been waiting for the “right time” to start college, then you may miss the opportunity to take advantage of 100% TA, or no TA with the current Government Shutdown.  Decreased budgets, Sequestration and the Shutdown have all proven that TA is an expense that will be continuously looked to reduce or get rid of.  During a Chief of Staff of the Air Force Visit recently, he told our base that there are strong discussions that will most likely to reduce TA to 75%.  That means you will have to pay the remainder or use some of your applicable GI Bill.  Bottom Line: You should start taking advantage of the college benefits now before this benefit goes away.

· Separating/Retiring from the Military – Ensure that if you are planning on separating or retiring from the military that you’ve done considerable planning ahead.  Make sure you aren’t making the decisions based off of one bad assignment.  Civil Servants are an extremely valuable part of our Military’s total team and have provided the continuity while the military was engaged in Iraq and Afghanistan but as the wars wind down and we get into worse financial constraints, our civilian personnel will be primary targets for reductions.  Sequestration and the Government Shutdown has shown that hiring freezes, furloughs, reductions in annual price index raises and other entitlements are top tools for budget reductions.