How can we influence/educate Soldiers to stop making impulse buys?

CPT Private RallyPoint Member — Tue, 01 Apr 2014 14:56:17 -0400

It is common for E-4 and below to waste their money on things they don't need. Most haven't learned to save their money or determine how much money should be allocated to things such as diet pills and medieval sword collections. Has anyone experienced any effective classes or resources to teach these important life skills?

Response by 1SG Private RallyPoint Member made Apr 1 at 2014 2:58 PM

1SG Private RallyPoint Member — Tue, 01 Apr 2014 14:58:27 -0400

ACS (Army Community Service) offers a finance class as well as financial management.

Response by 1SG Private RallyPoint Member made Apr 1 at 2014 2:59 PM

1SG Private RallyPoint Member — Tue, 01 Apr 2014 14:59:35 -0400

Sir,

If you insist your new JR enlisted soldiers to take a Finance Class (ACS gives them still) on base. It might help.

V/r

1SG Haro

Response by MAJ Private RallyPoint Member made Apr 1 at 2014 3:15 PM

MAJ Private RallyPoint Member — Tue, 01 Apr 2014 15:15:23 -0400

I gave my platoon a class on finance before returning from Afghanistan. Human beings in general (not just junior Soldiers) are not hardwired for long-term future projections. Retirement planning is not something that comes naturally, but a simple thought exercise drives the point home. I call it the 16 for one rule.

A dollar invested by a 20 year old Soldier now will be worth $16 when the Soldier is ready for retirement. The 16 for one rule is a simple question Soldiers can ask themselves before making a purchase. Would I pay $16 for this $1 cheeseburger?

When Soldiers realize what they are giving up in real dollars long-term for short-term gain they "get it." Help them visualize in real terms what they lose then for profit now and they will change their behavior and the behavior of others around them.

Response by SFC Michael Hasbun made Apr 1 at 2014 3:38 PM

SFC Michael Hasbun — Tue, 01 Apr 2014 15:38:42 -0400

It's just part of growing up...

Response by SGT Private RallyPoint Member made Apr 1 at 2014 6:01 PM

SGT Private RallyPoint Member — Tue, 01 Apr 2014 18:01:19 -0400

If the service member has their bills paid and isn't putting themselves in debt then I don't see the problem. Sure, they could be building up a roth IRA, a savings account, or something, but I don't see it being any business of the Army to force that upon a soldier. They'll pay for it later, figuratively and literally, but again I don't see this being a problem leaders need to confront.

Response by CSM Michael J. Uhlig made Apr 1 at 2014 6:40 PM

CSM Michael J. Uhlig — Tue, 01 Apr 2014 18:40:04 -0400

1LT Despard, I think we all buy things we don't "need" (e.g. a television - do we really need a TV?)....not trying to get into a theoretical debate, I understand your point and can share a story from my experience, which was wrong but turned out right for one of my Soldiers.

I was new in position as a 1SG (at Fort Polk) and had been told about one of the Soldiers that was very impressionable and a follower, and that he was one to watch (to help protect him from himself). It was at about a week in the seat when I got a call form a car lot wanting to finance a car, the salesman was looking for employment verification.....I told him the Soldier was in the unit and facing a Field Grade Article 15 and would be separated from service within the next 30 days....he was not approved for the overpriced Saturn ($16,000 for a 6-year old Saturn!). I called the Platoon Sergeant and told him to get the Soldier into the CP ASAP! The Soldier was very upset to learn he was facing UCMJ and a chapter (he heard that from the car salesman). The Soldier brought the contract (from an on-the-lot financing, E-1 & up instant financing joint) and we reviewed it to find 21.9% financing with multiple punishment fines built into the contract as well. The Soldier was upset for a couple weeks, but when I sat with him in the DFAC he confessed that he would not have been able to afford that car, it was a case of a snap decision and an aggressive car salesman.

To your thread, we can talk with our Soldiers, NOT AT THEM, so they understand the way interest works, show them an amortization schedule which shows how they pay for things over time and how it compounds itself. I suggested to my daughter and sons (my youngest is in the military) that they all establish credit with the local credit union by getting a $500 signature loan while understanding they will pay some interest. Then move up to a revolving credit card (e.g. gas card or something small) so they establish credit while they are young and then when they need a vehicle or larger purchase they will have some established credit so they pay a smaller rate. This is a very important topic for the financial health of our force.

Response by SFC Private RallyPoint Member made Apr 1 at 2014 8:34 PM

SFC Private RallyPoint Member — Tue, 01 Apr 2014 20:34:05 -0400

Sir, short answer "no".

You can offer every class under the sun and Joe will still blow his paycheck. The real issue at hand is that for the majority of Soldiers this is the first "real" paycheck / job. They don't have the life experience to know what to do with "real" money. I'll give you two examples:

No "life" experience - I had a Soldier (single, 20 y/o male) buy a truck with over 20% interest (after I told him to not go back to the dealership without me - he later said to me that he and his barracks friend felt that I was trying to control him).

Some "life" experience - On the other hand, I talked one of my Soldiers (married, 2 preschool kids, 1 kindergartener, 24 y/o male) into not putting a 25K tax free deployment bonus into a new vehicle. He invested 50%, used 40% as a down payment on his wife's new van (they really wanted the new vehicle), and blow the last 10% on a vacation without kids upon his return. When I PCSed two years later that Soldier told me that I had given him the best advise ever.

You can lead a horse to water, but you can't make him drink.

Response by CPT Private RallyPoint Member made Apr 2 at 2014 12:51 PM

CPT Private RallyPoint Member — Wed, 02 Apr 2014 12:51:47 -0400

A fincance class from ACS is definately a good place to start. I've also seen in initial counselings where if the Soldier wanted to purchase something that was over X amount of dollars then they had to get approval from their first line supervisor.