Financial planning does not come as second nature to the average American. In fact we as a people are now labeled more often then not as consumers instead of citizens, and the world of retail is designed for impulse buying. The military family faces a somewhat different set of financial challenges when compared to their non-military counterparts and while generic financial advice is a must, it is necessary to develop a more military specific plan as well.
While multiple programs and benefits offered by the U.S. armed services can guarantee all service members and their family will always have a roof over their heads and food on the table the effects of poor financial planning do not disappear, they simply take on a different form. A military member who falls behind on their credit card bill or loan payments runs the risk of being reported to their chain of command. In addition to receiving some very uncomfortable lecturing being reported also leads to wage garnishment, non-recommendation for promotions and in severe cases can lose that service man or woman their chance at a good conduct discharge. Simply put, falling behind financially can not only ruin their credit, but also their career.
The consequences of poor financial planning in the military may seem harsh, but thankfully they are also completely avoidable. There are several very simple steps that any member of the United States military can take to ease their financial burden and make it easier to pay down debt faster.
Attend a finance class
Financial management classes are offered in the civilian sector, but they often cost money to attend somewhat defeating the purpose. Almost all military bases offer free financial planning classes at several points throughout the year and many individual units have them as well. Most of these classes welcome the service members spouse to attend as well so they can both receive the information first hand. In addition to classes many bases also have personnel whose job is to have one on one consultations with service members who want or need help managing their money more efficiently.
Create a budget
One of the first lessons in any financial management class is to create a budget and stick to it. For military personnel this include not only the usual monthly expenses (utility bills, gas, food, rent, etc.) but job specific expenses as well such as uniform upkeep or extra savings for deployment. If military expenses are not accounted for in a families budget it can be very easy to get caught unawares.
Reduce existing interest rates
For service members who had any form of debt before becoming active duty the Service Member Civil Relief Act allows them to lower their interest rates to a 6% maximum. This can help service members pay down high interest loans or credit card bills much faster. This benefit does not happen automatically and companies are not required to lower the interest rate until requested to do so by the service member. In most cases proof of military status is required.
A service member should never feel shy about asking for a military discount. While not all businesses openly advertise that they offer these discount they will be granted to any military member who inquires about them. Ten percent off a ten dollar sale may not seem like much by itself, but in a months time service members can save well over a hundred dollars just by asking for it. The biggest money savers are cell phone and utility bills. These discounts often run anywhere from 10 to 25 percent off every month.
Even with good financial planning unexpected expense can often occur that put a huge strain on a families collective wallet. When these events happen service members should never fell ashamed to ask their immediate chain of command for help. The are many programs, an example being the Navy/Marine Corp. Relief Society, that can help service members with interest free or low interest loans to help them get through financial rough spots. Keeping this in mind, along with a well thought out financial plan, will let military families sleep soundly at night knowing that they are covered for the future.