Taking care of finances has always been a priority for Marine 1st Sgt. Ethan J. Mahoney and his family, he said.


He doesn't bill himself as an expert, but he does a lot of reading to try to improve his financial outlook. When he talks to his Marines about financial readiness, "they are always uneducated and just do not know what they should or shouldn't be doing," he said.

The Marine is one of four service members who volunteered for this year's special report on Troops And Their Money. Military Times put out a call for troops to have their finances reviewed by financial professionals. A variety of service members of different ranks, and in different financial circumstances, responded.


Mahoney and his wife, Sara, have children ages 3, 5 and 8. He's been in service for 16 years, and the family has been laying a foundation for his return to civilian life. They plan to stay in the Jacksonville, N.C., area, where they have bought a house.


He's the company first sergeant at School of Infantry-East at Camp Geiger. Sara's a stay-at-home mom, but she plans to return to work in a few years.


His gross income is $6,483 a month. They save about $1,000 of that. He's transferred his Post-9/11 GI Bill benefits to his children, but they've also set up a 529 Plan to cover future education costs.


Mahoney, 35, and his wife have nearly $90,000 in retirement savings and more than $3,800 in other accounts, including

an emergency fund ($1,100), Christmas fund ($856) and trips fund, earmarked for a Disney vacation ($364).


"My wife came up with the separate accounts ... so we don't have to throw it all on credit cards," he said.


They're also paying down $9,000 in credit card debt they accumulated because of some medical issues that Tricare didn't cover, and some pet issues.

A financial snapshot:

  • Total family income: $77,802
  • Consumer debt: $5,100 van loan, $9,052 credit card debt
  • Emergency fund: $1,100
  • Mortgage: $161,260
  • Value of home: $175,000
  • Children's education fund: $1,509
  • Other assets: $856 Christmas fund, $365 trips fund
  • Retirement assets: $81,901 in Roth IRAs, $8,092 in TSP
  • Savings plus retirement savings: $93,823
  • House equity, plus savings, plus retirement: $107,563

THE REVIEW

The Mahoneys have a good system for managing their money, said JJ Montanaro, a certified financial planner for USAA. Their savings accounts set aside for trips and Christmas "are a great way to set aside money for big ticket expenses over the course of the year, so they

don't create a financial crater!"


There are some "gaps" in their situation, he said, but the Mahoneys are laying a good foundation and will make good use of future income increases.


Eliminating that credit card debt and building up their emergency fund should be top priorities, Montanaro said. Smartly, they're not adding new debt and had already worked with the credit card companies to reduce their interest rate.


They're putting about $100 a month into their emergency fund – a good regular amount, Montanaro said, especially since the fund should grow a bit before Mahoney moves into the civilian world. Extra cash will help smooth any unanticipated financial bumps in that transition.


The Mahoneys expect a $5,000 tax refund, which could best be used toward those goals, but Montanaro advised decreasing the amount of taxes withheld from Ethan's paycheck to help "ease the month-to-month tightrope you walk."


Montanaro also advised the couple to get basic legal documents from their legal assistance office to provide for their children should something unexpected happen.


"With three young kids, this is critically important in terms of laying out your plan to care for them, both financially and from a guardian/physical perspective," Montanaro said.


Other recommendations: Review homeowners' insurance to be sure it can cover the home if it's destroyed (not the same as fair market value); up liabilily coverage on auto insurance; and add some U.S. stocks, foreign stocks and bonds to diversify investments. Montanaro also suggested putting new TSP contributions into Roth accounts that are taxed based on current income bracket, not on the bracket in play when the money is pulled out.

WHAT'S NEXT


Mahoney said he and his wife will visit their military legal assistance office around the first of the year to set up legal documents such as wills and trusts.


"We've been talking about this for years, and just haven't gotten around to doing it," he said.


They're also looking into life insurance options. Montanaro suggested they evaluate whether the $400,000 SGLI and the $100,000 Family SGLI policy are enough life insurance to meet their needs. Mahoney has already switched his TSP contributions to Roth, and he'll adjust his TSP to vary his investments.


He said he's learned from this review and hopes others will, too.


"Even though you think you might have your finances in hand, it's always a good idea to get a second opinion from a financial expert," Mahoney said.

Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.

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