Thrifty living adds up to thousands saved from careful planning
by Nick Stubbs
Free Seaworld admission for active duty military members is cool. An extra $500 off on a new Jeep is attractive too. Getting married? It can be cheaper with a military discount. How about 15 percent off on a gumball machine? How does a 10 percent break on dog waste removal strike you? A free "Dream Pillow" anyone? Anyone in uniform, that is.
Those are real-world discounts offered by the civilian marketplace. The Air Force piles on a few more savings as well to make surviving in today's economy easier for its members.
Free medical and dental, housing and meal allowances, a continually improving version of a 401K program, additional interest paid to those who save during deployments to combat zones, base services and goods at cost (plus a little) are among the current perks. But don't forget college tuition allowances, VA loans, the GI Bill, free legal services, per diem and all the other odds and ends that can save big bucks, including space available flights. For those who want to stick around the Air Force, there also are reenlistment bonuses and with a little planning, those bonuses can be tax free.
Today's military men and women enjoy the rewards of a grateful nation proud of their service, and businesses nationwide have stepped up with discounts and freebies. Couple those with the many programs and services offered through the military and affiliated government services, and it's no surprise a savvy Airman at MacDill can realize some sweet savings over the course of a year. Just how much? What's the potential?
To help answer that question; we present you with Senior Airman Joe Thrifty, a hypothetical, typical Airman especially on the ball when it comes to saving money. He knows the savings opportunities available to him and isn't afraid to use them. Let's take a look at what he managed to save in a year using what is uniquely available to him as a servicemember. Think of these benefits like playing the cards Airman Thrifty was dealt when he became a member of the Air Force. If he plays them well, big savings will be the reward.
Airman Thrifty plays his little cards every week. He stops one morning a week at a local doughnut vendor who offers a free donut with coffee to active duty (savings $.93). He also eats lunch each day at either the dining facility, local restaurants off base that provide discounts ranging from 10 to 20 percent off for military customers or base eateries where he can cash in a $1 coupon provided through "MacDeal Bucks" he receives as an enlisted club member (savings over the average working civilian are about $6.70 per week). Since he receives $267 per month in Basic Allowance for Subsistence money to cover the cost of his meals (the savings per year when compared to a typical civilian compensation package is about $3,204).
Come grocery shopping time, Mrs. Thrifty never fails to take advantage of cost-plus benefit of the base Commissary. That means the Thriftys save about 20 percent a week on their overall grocery bill. If they keep an eye out for sales and loss-leaders at off-base stores and pick up those items as available, the savings can amount to about 25 percent a week (saving them about $85 per month).
The average private employee in the U.S. paid $2,661 toward medical insurance per couple in 2004, according to a survey published by the Henry J. Kaiser Family Foundation. The Thriftys paid nothing, netting those savings and more. They pocketed an additional $1,850 in savings by having no deductibles or co-pays to worry about for routine doctor visits when both came down with flu, Airman Thrifty sprained his knee or procedures and prenatal care for the expecting Mrs. Thrifty.
The Thriftys also attended a free program offered by the Family Support Center called "Bundles for Babies," in which new parents are prepared for their new role in life. As part of the course, they receive a free package of books, blankets and other baby supplies (saving them $70). On the ride home from the course, Mrs. Thrifty was reading the Thunderbolt base newspaper where she discovered that Advanced Ultrasound Services offered military discounts on ultrasound sessions. They jumped on the offering, which provides a unique 3-D image, and it saved them $200 on a $300 procedure.
Mrs. Thrifty e-mailed those ultrasound images to her husband, who as an aircraft maintainer was by then deployed to Iraq on a three-day mission. Since it was his third such short trip to a combat zone in three consecutive months, he was eligible to receive three months of pay without tax deductions (savings $827). Since anyone who spends at least a day a month for three consecutive months in a combat zone is eligible for a new high-yield savings plan, Airman Thrifty moved money from inferior investments and contributed $10,000 to the plan, which paid 10 percent interest, knowing the windfall would go a long way to help him meet the responsibilities of his growing family (net with tax savings and interest earned for the period was $295).
While her husband was deployed, Mrs. Thrifty also took advantage of an Air Force Aid Society program designed to keep the family car in good health, getting an oil change and checkup valued at $26.95 at no cost.
While flying back from his last mission, Airman Thrifty arranged to reenlist while in the air before entering U.S. air space. Since he took the oath in a tax-free zone, he would be able to keep the entire $6,200 reenlistment bonus, saving him about $1,050 in taxes. Because the bonus is not paid all at once, the total savings were not immediate, but did mean he put an extra $500 or so his pocket right away. That was enough to furnish the baby's room with crib, changing table, decorations, blankets and the like, some purchased at a 10 percent savings at online shops found at www.military.com on its baby and maternity pages (about $50 in savings).
In addition to medical coverage, Air Force TRICARE covers all of Airman Thrifty's regular dental care and 80 percent of the family's. A couple of fillings for Mrs. Thrifty, checkups for both and some added X-rays for Airman Thrifty and nearly all of their bills were covered (total savings were $390).
The Thriftys always look ahead and have been contributing to the Air Force Thrift Savings program, essentially a 401K for military members. They contribute 10 percent of Airman Thrifty's pay each pay period, not only helping provide future financial security, but saving them on their taxes, since the contribution is pre-tax (savings in a year came to $304).
The sporty, little two-seat convertible Airman Thrifty owned for several years was not only tired but too small to accommodate the new addition on its way. Airman Thrifty recalled hearing that the Family Support Center offers free Carfax vehicle history reports and utilized the service while he shopped for a replacement used car (savings $24.95). But while shopping he discovered that GM was offering $1,000 rebates to military members and the couple ended up trading for a new Chevrolet big enough for the whole family.
Husband and wife shared the car, with Airman Thrifty traveling each day to the base, except on the days Mrs. Thrifty needed it to attend a job-training course offered by the base Family Services Center. Teaching her computer and secretarial skills, the $300 course was being offered for free, an offer she couldn't refuse (savings total $300).
Airman Thrifty always drove the car on days when he had continuing college education courses to attend at night after duty. The Air Force was picking up the total cost of all his classes, paying him $1,500 for the year (savings total $1,500).
In the spring, the couple took advantage of free tax counseling provided as part of a program offered by the Retiree Activities Office each tax season, saving them $120 in fees that would have been charged by an accountant. They also utilized free legal services to help resolve an issue with a family estate and a dispute with a mechanic who took them for a ride on a repair job on that little convertible they traded in (saving them about $820). Incidentally, clearing up the legal issues around the estate required a flight to Chicago in the summer and fortunately Airman Thrifty was able to arrange his leave when a Space Available flight to Illinois became available.
While flights are hit or miss, Airman Thrifty knew if he could at least catch a flight up, he could save some money. When a seat came up, he took care of his business, finding an inexpensive one-way red-eye flight home on a commercial carrier (savings were $135).
As a result of the bad experience with the mechanic, Airman Thrifty began taking his car to the base Auto Hobby Shop. He picked up some pointers from the helpful staff there and for $1.50 per hour he can rent the shop, with its hydraulic lifts, tools and all he needs to do routine maintenance and most repairs. Over the course of the year, he saved about $650 in garage fees and after factoring in his own time working on his car using his military pay rate and subtracting the cost of parts, figured he saved about $400.
No expense hits harder than housing costs but while the Thriftys were house hunting, they took advantage of the Rental Partnership program in Tampa, in which local landlords partner with MacDill to offer special low rental fees to military members and agree to waive the usual first, last and security payments (savings about $2,100 on the year). Since military benefits traditionally have covered a servicemember's room and board, servicemembers are compensated with the Basic Allowance for Housing. Airman Thrifty is entitled to $1,015 per month (yearly savings coming to $12,180). Add to that $1,870 in moving expenses reimbursed to cover his Permanent Change of Station to MacDill at the start of the year.
The VA loan for which Airman Thrifty qualified was a big help, not only providing a 5.6 percent fixed rate but also saved them from having to come out of pocket for a down payment. It meant they could keep $4,000 to $5,000 in investments and for personal use, including helping the Thriftys recover from the GI Bill requirements of eligibility of $100 per month for 12 months they paid out his first year of service. While no immediate benefit from the GI Bill was realized, by meeting eligibility, Airman Thrifty is entitled to up to $50,000 for continuing education expenses.
The great thing about being based at MacDill has been the recreational opportunities available in Florida. There are plenty of ways to save money there too.
The Thriftys regularly save by taking advantage of free or reduced price tickets to events, concerts, professional sports games like the Tampa Bay Lightning and Devil Rays and from other organizations periodically provided to the base by area attractions and promoters, with Tickets and Travel a helpful outlet for finding money-saving deals (savings over the year came to $475). They even got a weekend getaway stay provided at no cost to military members by the historic Bellview Biltmore Hotel in Clearwater (value $230).
They are regular readers of the monthly base magazine "Base, Bay and Beyond," which is packed with savings opportunities and deals for servicemembers. It's where they found their deal for 40 percent off a four-day vacation at Disney World parks. Both took scuba lessons advertised there by the Outdoor Recreation department of the Services Squadron (savings: about $100). Airman Thrifty even got a free, chartered fishing trip by an area guide participating in a special military appreciation event called "Take a Soldier Fishing" (split fishing charter value: $200).
Now let's take a look at what being thrifty and being a part of the Air Force adds up to for the Thriftys: $38,217.35.
Keep in mind that the Thrifty scenario outlined here involves a very active year in which they were on the move, tapping into education benefits, a home purchase and new car. It was also a year in which reenlistment bonuses were paid and special deployment compensation added to their bottom line. In short, big savings are proportional and run in tandem with big expenditures. And while theirs was an unusual year, it nevertheless is a conceivable 12 months for a young family and serves as an illustration of the potential savings.
While the Thriftys stayed on top of what financial benefits are available, they also knew the key to ongoing savings is tied directly to their commitment to staying informed about new opportunities and changing Air Force rules and benefits. For other servicemembers interested in being thrifty, it is imperative to investigate opportunities as they arise. It is said that the best things don't come with a price tag, but saving money can provide the comfort and security people need to enjoy all the priceless things in life. (Note: specific companies are used for illustration purposes only in this article. No endorsement is intended or implied.)