Financial Planning and Literacy for Military Families

With the potential for deployment, the lingering effects of the recent recession, and predatory lending practices targeted at military personnel, the number and types of financial stressors and challenges facing military families are significant.  These stressors are compounded when considered with the potential disciplinary actions possible under the Uniform Code of Military Justice for failure to pay financial obligations in a timely manner.  In an effort to alleviate these stressors, the Department of Defense initiated the Financial Readiness Campaign in 2003.

The campaign is a partnership between public and private sectors to give service men and women and their families a chance to learn about personal finance and better manage their money.  As a result of the campaign, Personal Finance Management Program offices are available on all DoD military installations.  Locations and contact information for these offices can be found on the Military Installations website ( under “Personal Financial Management Services”.  Information and resources are also available through Military OneSource (1-800-342-9647,

In addition to the military sponsored programs and resources, financial planning experts such as Dave Ramsey and Clark Howard have specifically designed financial advice available for military personnel and their families.  In fact, Dave Ramsey’s popular Financial Peace University has a military edition created to address the needs and concerns of military members and their families.  There is also a Military Financial Education Center at the University of Maryland University College (UMUC, as well as the Financial Industry Regulatory Authority (FINRA) sponsored Military Financial Education Project (

Establish and Live on a Budget

Learning about personal finance and improving your financial literacy is the first step towards financial planning.  The heart, however, of financial planning is the budget.  Establishing and living in accordance with a monthly budget will go a long way towards eliminating impulse purchases, paying down debt, and increasing your savings.  Be patient with yourself and your family as you set-up your budget.  It may take 3-6 months to get a good handle on your spending habits.  The Military Financial Education Center at UMUC provides a solid five step process to aid in establishing a budget.

Create an Emergency Fund

A 2009 survey of 700 military personnel and 100 spouses found that only 50% of the respondents had set aside funds to cover up to 3 months expenses in case of an emergency.  The Military Financial Capability Survey conducted by FINRA goes on to report that only 39% of enlisted personnel and junior non-commissioned officers have set aside funds.  An emergency fund is like a safety net or shock absorber.  It will allow you to absorb a financial set back without dipping into long term savings or taking on more debt.  The goal for the emergency fund should be to cover 3-6 months expenses assuming you have limited or no regular income.

Eliminate Debt

Limiting or eliminating debt will free cash that is being tied up in interest payments.  Doing so will also help eliminate one of the biggest stressors in your financial life.  Even if you cannot eliminate all of your debt, make sure that your interest rate is capped at the legal limit of 6% if you are on active duty (reference Service Members Civil Relief Act).

Avoid payday lenders at all cost.  These lenders see the military as a prime target for their predatory lending practices.  The effective interest on payday loans is excessive and financially debilitating.  These loans are a quick path to financial problems and must be avoided. 

Review Your Insurance

Part of ensuring that your financial house is in order is making sure your insurance coverage is adequate and complete.  Insufficient medical, home, rental or car insurance can seriously damage even the best financial plan.  Take the time to meet with your insurance agent and review your insurance at least once a year to make sure the coverage is appropriate.  This is also a good opportunity to make sure you are getting the best rates and all available discounts.

Turn to Relief Societies if Needed

Sometimes even the best plan cannot cover the unexpected.  Each branch of the military has a private, non-profit organization available to assist its members and their families in a time of need.  These relief societies can provide grants and interest free loans to members of the military and their families who have a valid need for financial assistance.  The following societies can help if you need assistance with rent, utilities, child care expenses, vehicle repair, or other family emergency:  Army Emergency Relief (AER,, Navy-Marine Corps Relief Society (NMCRS,, Air Force Aid Society (AFAS,, and Coast Guard Mutual Assistance (CGMA,

A solid financial plan will help ensure your financial readiness and your family’s financial success.  There are numerous military and civilian programs aimed at helping alleviate the financial stresses on military families.  Make use of these resources to help establish and maintain a budget, create an emergency plan, eliminate debt, and improve your overall financial life.