CHARLESTON AIR FORCE BASE, S.C. –
Do you have a plan for your federal income tax return money this year? If you are like most people who anxiously wait for a refund, I'm sure you have given a lot of thought to how you plan to spend your money. There's that big screen TV that you've always wanted or the new laptop computer that you desperately need so you can surf the Web even faster or maybe you would like to take a vacation. Whatever your plans may be, I hope you give some serious thought to your financial future and not just immediate wants.
With today's uncertain economic climate and the importance of protecting your credit rating, smart use of your money is more important than ever. Military members must take steps to protect their credit score and credit report not only for personal interest, but your credit report also has a large impact on your military service. Everyone knows that your credit score determines if you qualify for specific loans and at what interest rate you'll have to pay on those loans. The better your score, the lower the interest rate on the loan and the more money you'll save in the long run.
For military members, your credit report is also used in the application process for some special duties and in the granting and maintaining of security clearances. If you have a bad credit report or history of excessive financial debt, you can lose an already established security clearance or be disqualified from receiving one to begin with. In either case, this will negatively effect your career.
Wise use of your tax return can improve your credit report and credit score by lowering your debt ratio. Simply paying off some smaller bills, especially if they are high interest loans can free up a lot of money each month and raise your credit score by improving your balance to available credit percentage. Also, if you have an interim security clearance or a clearance that is in question, paying off those small bills will show progression towards correcting a negative financial situation.
If you have been a responsible consumer and your bills are well under control, then increasing your savings may be a smart use of your money. A savings is very important to have in case one of life's unexpected events pops up or if you are planning a career change such as separating from the military or retiring and moving into the private job market. Having a savings equal to several months pay will make your transition much less stressful in the event that it takes you longer than expected to secure a job. If you have watched the news at all lately, you know how difficult it can be to find a good paying job.
So, before you run out and spend the refund on a want, ask yourself if there is something you could put the money towards to help save you money in the future. The Charleston AFB Airman and Family Readiness Center provides an educational class, Protecting Your Credit, where they specifically talk about the effect of credit management on your security clearance. The A&FRC is always available to provide financial counseling to help make the most of your money; they can be reached at 963-4406.