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By Barbara O’Neill, Ph.D., CFP®, [email protected]


Personal Financial Managers (PFMs) often find themselves discussing the “4 B’s of Basic Personal Finance” with service members. The 4 B’s are Budgeting, Banking, Borrowing, and Buying.

Below are action steps for each of the 4 B’s for PFMs to share with service members:


  • Use the alternative name “spending plan” to avoid negative images associated with the word “budget.
  • Identify the daily, weekly, monthly, and annual cost discretionary expenses that add up over time.
  • Brainstorm specific ways to increase income and reduce expenses to achieve flat or positive cash flow.
  • Track spending for a month or two to confirm accurate numbers to use in a spending plan.
  • Use the CFPB Bill Calendar tool to list due dates for all household expenses together on one sheet of paper.
  • Determine preferred method(s) to pay bills (cash, checks, debit card, credit card, and/or peer-to-peer apps).
  • Determine money values using several online self-assessment tools. Search “values clarification activity.”
  • Write smart goals with a specific dollar amount and a time deadline using the goal-setting template below.


Smart Goals Template Example 



Graphic by Dr. Barbara O’Neill


  • Compare at least three financial institutions (e.g., brick and mortar banks, online banks, and credit unions).
  • Consider these features: fees, interest rates, minimum deposits, online access, free ATMs, and military perks.
  • Avoid high-cost “foreign ATMs,” especially those located at stadiums, amusement parks, fairs, and casinos.
  • Seek lower-cost alternatives to high-cost alternative financial services (e.g., payday loans and check-cashers).
  • Compare the annual percentage yield (APY) on bank accounts (more frequent compounding = higher APY).
  • Reconcile personal checking account balance with your bank statement’s ending balance at least monthly.
  • Learn to appreciate the awesome power of compound interest using the online calculator.
  • Understand how a sum of money doubles (by time period or interest rate) by learning the Rule of 72.

Compound interest calculator from


  • Learn 5 creditworthiness Cs: Character, Capacity (to repay), Capital, Collateral, and (economic) C
  • Seek credit cards with a low APR and penalty APR (interest), low fees, no annual fee, and good rewards.
  • Compare at least three credit cards by reading the Schumer (disclosure) box and contrasting key features.
  • Pay at least double the minimum payment if a credit card bill cannot be paid in full to avoid “perma-debt.”
  • Check credit reports from each “big three” credit bureau (Experian, Equifax, TransUnion) annually.
  • Check credit scores regularly; many banks and credit card issuers provide free scores to their customers.
  • Avoid a student loan balance greater than the first-year starting income in a post-degree job.
  • Keep the total of monthly consumer debt payments at less than 15% to 20% of monthly net (take-home) pay.


Debt to income ratio guidelines from



  • Think about expensive purchases made in the past and lessons learned during the shopping process.
  • Check sources of independent consumer product shopping research such as Consumer Reports.
  • List “must-have” and “nice to have” features in upcoming “big ticket” purchases (e.g., a car).
  • Compare and contrast the pros and cons of new car buying, used car buying, and auto leasing.
  • Use an online calculator to determine car loan payments for different loan amounts.
  • Avoid being “upside-down” on a car loan with a large down payment and/or a short loan term.
  • Use the “Rule of Three” to compare three features and costs of similar “big ticket” purchases.

Rule of 3 for Comparison Shopping Worksheet

Photo by Liza Summer on Pexels