Financial adviser encourages Airmen to ‘focus on fundamentals' Published Oct. 3, 2008 By Carl Bergquist Air University Public Affairs MAXWELL AIR FORCE BASE, Ala. -- What wouldn't most Americans give for solid financial advice in the current uncertain climate? For more than 140 Officer Training School cadets, all they had to do was show up for work. A money expert from the United Services Automobile Association visited Maxwell-Gunter for a briefing at Officer Training School on Sept. 25, and his main concern for the young Airmen was that they "get off on the right foot" concerning their paychecks. "I think the big thing is to focus on the fundamentals," said J.J. Montanaro, certified financial adviser. "There is a lot of noise out there in terms of financial advice, but it is important to focus on the things you control." Mr. Montanaro advised the group to control their debt and avoid opening and closing a lot of accounts, as that can hurt a credit rating. Additionally, paying off credit card balances each month is best, but one should never allow balances get above 30 to 35 percent of card limits. He also said it is extremely important to develop a budget. "Everything starts with a good budget," he said. "Build a budget and commit to it. If you watch where the money goes, you won't pile up a lot of credit debt." Mr. Montanaro said people need to use credit cards for credit building purposes, and paying card balances off as soon as possible helps establish a good credit rating and helps keep them from having credit problems. He said using the Thrift Savings Plan and Roth Individual Retirement Accounts are good ways to manage funds, and the Service Members Group Life Insurance can be worthwhile. "For single members, the SGLI is probably all they need," he said. "As things change, such as marriage and the arrival of children, they will probably want to look beyond that." Mr. Montanaro said Roth IRAs are great as a long-term retirement tool because money put into them grows without taxes, and at retirement, the money is paid tax free. He said he can't stress enough the value of planning and watching your money. If a person invested $5,000 in a Roth IRA for just three years, that IRA would pay out more than half a million dollars at retirement, he said. "When I was a cadet, a guy came to talk to us about this subject," Mr. Montanaro said. "I didn't listen at the time, but years later I went back and looked at what he said. Then, I wished I had listened to him." He said controlling debt is a key to staying financially sound, but often, people simply spend more than they have coming in. "My message: spend less than you earn, and save some to boot," he said. Financial security is a choice You'll never know where your money goes without a budget (write down monthly expenses and compare that to your income). The minimum monthly payment for credit cards is typically 2 to 3 percent of the balance. A $1,000 balance at 18 percent annual percentage rate would take 12 years to pay off. Everyone should invest 10 percent of their income in a retirement savings plan. The younger you are when you begin saving, to more compounding interest is accumulate on the money you put away. Know your credit history! Realize the difference between your shopping needs and wants. Consider the 24-hour rule: Wait one day before making a "want" purchase to allow objectivity instead of impulse spending.