Navy men and women should adopt a systemof accounting to keep their financial mattersstraight and their affairs solvent. Navy membersrarely remain in one location or tied to one groupof personnel who know their credit, abilities, pastaccomplishments, and general reputation. Thenature of the Navy requires personnel toreestablish these attributes every time theytransfer.The following section on personal financialmanagement gives you information you will needto help your people keep their financial affairsstraight. It will acquaint or reacquaint you withcertain factual information. This information willhelp you when counseling, advising, and trainingyour people on financial affairs. Some of theinformation may be elementary to you, However,because many young Navy members often do notgrasp these facts, they get into financial trouble.If you are thoroughly familiar with these basics,you will be in a better position to help youngmembers with their financial management.Keep in mind also, Navy Family ServiceCenters offer confidential financial guidance toNavy personnel. Encourage your people in needof personal financial counseling to use thecounseling service provided by the centers. Directthose needing legal or other advice to a legalassistance officer or some other counselor whocan provide the needed advice.Money ManagementNavy personnel usually manage their moneyin one or more of the following four ways; eachhas advantages and disadvantages:1. Checking account2. Savings account3. Cash4. AllotmentsCHECKING ACCOUNT. —A checking ac-count usually serves as the safest and the mostconvenient and efficient way for people to keeptrack of their money. A checking account is afinancial arrangement with a bank, savings andloan association, or credit union for safeguardingmoney.As persons need money, they draw or transferfunds by writing a check. Persons can issue acheck payable to another person or to a companyto pay bills or to get cash. This easy-to-maintainmethod conveniently helps people manage theirfinancial affairs. Navy members on shore dutymay authorize the Navy to deposit their paychecksinto a savings or checking account via the DirectDeposit System (DDS). If assigned to sea duty,they can use the allotment system to have theirpay deposited in a checking or savings account.The following are some of the advantages ofthe DDS and allotments:• Personnel don’t have to wait in longpayroll lines to cash a paycheck.• Pay goes directly to a set account evenwhen personnel are on leave or temporaryduty.• Personnel can write checks on payday withthe assurance that their pay is in the bank.• Personnel have access to pay when awayfrom their home stations by the directdeposit of their paycheck into a checkingaccount.• Personnel can mail checks to pay bills.Personnel do not have to buy moneyorders.• In case of a lost or stolen wallet, personsdo not lose their entire pay. The balanceremains safely in an account.• Canceled checks serve as receipts andrecords of paid bills.• The proper use of a checking accountshows a person’s financial reliability andserves as a good reference for creditors.SAVINGS ACCOUNT. —One way for per-sonnel to manage their money is to have a savingsaccount. Savings accounts draw interest, whilechecking accounts sometimes do not. A savingsaccount is an excellent way to gather interest andto keep from spending money.CASH. —Once personnel withdraw moneyfrom a checking or savings account or cash theirpaychecks, they operate on a cash basis.Operating on a cash basis offers the advantageof ready money but also the chance of theft orloss of cash.Operating on a cash basis results in low costs,but it has some disadvantages. The use of cashrequires personnel to stand in lines to cashpaychecks and to buy money orders to pay bills.4-12
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