Members of the military spend distinguished careers serving our country, but that dedication sometimes comes with a heavy financial price.
According to a 2015 survey conducted by the National Foundation for Credit Counseling (NFCC), military personnel have significantly more debt and fewer assets than civilians.
Think about the discipline learned during basic training. Couldn’t that be applied to other areas of life, specifically debt management? Shouldn’t a military career lead to lifetime financial security? Unfortunately, when it comes to money matters, things don’t always turn out that way.
“This is a serious problem,” NFCC president and CEO Susan Keating told NBC News. “The issue of financial stability for those who serve our country is a real concern.’’
According to the NFCC survey, the average military family had 7 percent higher unsecured debt balances (nearly $500 more than the average), 16 percent fewer tangible assets ($11,000 less than the average) and 15 percent higher monthly debt-related expenses ($200 more than the average).
Military Plagued by Debt Collections
Additionally, a 2016 report by the Consumer Financial Protection Bureau determined that military members and their families are much more at-risk in debt collections than the general population. According to the CFPB report, debt collection represents almost half (46 percent) of all military complaints filed.
By comparison, debt collection represented only 26 percent of the total complaints received by the CFPB.
Members of the military get themselves in financial troubles for a lot of reasons, but the most common one is overspending, especially if they’re supporting a family.
And if there’s a family emergency, the money will have to be stretched even further, perhaps creating a crisis that can’t be reversed. Military members can be young with little financial experience — maybe no experience at setting a budget — so mistakes are made.
Frequent moves can apply more pressure, particularly when a military family needs to sell their home on short notice. The lack of day-to-day continuity also makes things difficult for a spouse to find and hold a good job.
Deployment can add more complications, especially if an unprepared spouse inherits all the financial responsibilities. Bills could be neglected during the transition. Those missed payments could lead to more debt.
Because of the steady paychecks, military members also can get credit more easily and are more likely to be targeted by creditors.
Some military members could be afraid to seek financial help, particularly if they are involved with collection agencies, because they are fearful of jeopardizing their security clearance.