Personal financial non-readiness: how big of a problem is this in military units?

CPT Aaron Kletzing — Sat, 28 Mar 2015 11:35:34 -0400

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Reflecting on my time in the Army, I've come to believe that personal financial readiness is a bigger problem across military units than many people realize. Surely, some personnel have "official" financial issues that the CoC is aware of, and they may be sent to financial counseling or receive unit-level counseling (depending on the severity). However, for every individual service member who the CoC is tracking with personal financial issues, I would not be surprised if there were 5 more who also felt they were facing significant personal financial problems at home.

My question for the RP community is this: how big of a problem (REALLY) is personal financial non-readiness across military units? How pervasive are these issues, beyond what is officially reported? Or, in your opinion, does what's reported account for 100% of issues?

Please share some of your experiences as leaders on this issue, including how you have approached dealing with these challenges.

Response by SGT Private RallyPoint Member made Mar 28 at 2015 4:07 PM

SGT Private RallyPoint Member — Sat, 28 Mar 2015 16:07:28 -0400

I think part of the issue is that Soldiers can be put in a tough place if they are not smart in their relationships. I've seen others, and personally had in one instance, put into situations where they were left on the hook for things they had no control over or knowledge of. Most companies realize that the military is going to force a Soldier to pay it, even if it legitimately isn't theirs to own.

In addition, Soldiers themselves tend to be stupid with their money, and get little education on how to properly budget or manage their affairs until it's too late. I've never understood why so many financial readiness classes spend the majority of time on long term investments. I agree that they're a great thing to utilize, but if a Soldier can't even balance their checkbook, how on earth will they manage to invest wisely?

Response by Sgt Aaron Kennedy, MS made Mar 28 at 2015 5:02 PM

Sgt Aaron Kennedy, MS — Sat, 28 Mar 2015 17:02:19 -0400

Personal Financial Management is one of the first Marine Corps Institute Correspondence Courses a Marine takes as a young Pvt/PFC/LCpl.

We tend to work under the assumption that we cannot hold Marines accountable, if we don't "at least TRY to train them" at it.

That said, we also have folks over at base financial aid office all the time. they had a big bucket of clipped up credit cards they used to highlight how quickly things can get out of control.

Luckily, since "Food & Rent" are generally covered, and we have a pretty good support structure of "Hey SSgt, got a second... I've got a problem" things aren't anywhere near the civilian level, but they aren't a rose garden either. We don't have the bounced check issue, but man predatory lenders on payday loans were common for a long time (not sure how bad now).

The biggest issue I ever saw was during deployments and folks coming back to wives who weren't adequately prepared beforehand or who were going to go a through a divorce when they got back...

Response by SGT Rick Ash made Mar 28 at 2015 5:14 PM

SGT Rick Ash — Sat, 28 Mar 2015 17:14:38 -0400

I still have every L.E.S. I received in 6 years. Looking back it's easy to see why my wife always worked and I had a second part-time job. We lived well, even in the ville in S. Korea and off base housing in and around Frankfurt, Germany. But when I review a LES from the early 70's it does not look even remotely possible to have lived on those monies alone.....

Response by CSM Michael J. Uhlig made Mar 28 at 2015 8:28 PM

CSM Michael J. Uhlig — Sat, 28 Mar 2015 20:28:15 -0400

CPT Aaron Kletzing, many Soldiers I talk to are living in the moment and often make impulse buys without much consideration of what they want versus what they need! The wants often get them into trouble. I've developed a great relationship with our financial advisor in the local ACS and send him 4 to 5 clients per week. In fact, we talk so often, he recognizes my phone number when I call him (our IG knows my number when I call them as well - they are another great leadership resource!).....and I make sure to call him with the Soldier there, he gives an appointment time and then confirms with me that the Soldier makes it.

I went to the barracks today to check the laundry rooms and make sure the CQs had everything they need, I checked the staff duty on the way out and there was a Soldier at the Staff Duty desk that was very excited - he asked me to go with him to look at a truck for sale. Here's the basics of the conversation:

CSM: What kind of truck is it?

PFC: CSM, its a new Ford, the one that has the Mustang GT engine and with all the options it is only $38,000 - "it is a great deal CSM!"

CSM: Do you really need a new truck, I thought you were separated from your spouse and facing a divorce?

PFC: CSM, I can afford it, my promotion is effective at the middle of next month so my pay raise can help with the payment.

CSM: Have you checked with your insurance company and have you check the fuel efficiency of the vehicle? Do you really need a $38K truck, could you get by with a very nice used truck for about $5,000?

PFC: I really want this truck, will you go on a test ride with me?

CSM: you make it make sense to me why you should buy a $38,000 truck and I will go to the dealership with you.....no reply from the Soldier.

So, I went upstairs, made some phone calls and the Soldier came up and thanked me - he looked on a site called bookoo and found a used truck (for $11,000)!

When I was a 1SG at Fort Polk, one of my Soldiers wanted a loan on a Saturn that had more money in the rims than the car was worth & also had more money in the stereo than the car was worth....he was trying to buy a $3,000 car for $10,000! When the finance company called me for employment verification, I immediately asked them a question - how much is the interest....17.9%....so I told the finance company "this Soldier has been in trouble, we do not know how much longer he will be in the unit".....we were already planning on moving him to the HHC so it was not a lie....they denied his loan application! He was furious for about 6 months, when I was about to PCS, he found me and thanked me for "not allowing him to make the worst purchase of his life".

Response by SPC David Shaffer made Mar 29 at 2015 2:15 AM

SPC David Shaffer — Sun, 29 Mar 2015 02:15:32 -0400

CPT Aaron Kletzing this is a problem that most Americans have.

Response by SFC Mark Merino made Mar 29 at 2015 2:52 AM

SFC Mark Merino — Sun, 29 Mar 2015 02:52:33 -0400

In the day, we weren't allowed to buy a vehicle until we were an E-4 (Germany, 1990). We often get service members who have no idea how t take care of themselves. They sometimes come from homes where they never had two dimes to rub together, or had to surrender their pay to help the family. Now, those 2 paychecks a month seem like all the money in the world. Now add a few measures of immaturity and a several horse power of foolish pride, and that brand used Yugo with the spinny rims starts looking like the solution to everything. As leaders, we have to act as pesty parents at times. It's a lot easier to make sure young people get some sound financial advice and knowledge of budget planning before they become problem children for us later.

Response by COL Charles Williams made Mar 29 at 2015 3:09 AM

COL Charles Williams — Sun, 29 Mar 2015 03:09:03 -0400

Major issue... and no one is trained for this.

Response by SGM Mikel Dawson made Mar 29 at 2015 6:10 AM

SGM Mikel Dawson — Sun, 29 Mar 2015 06:10:09 -0400

As a Reservists I had a different prospective on finances. While deployed to Bosnia / Croatia in '95-'96 here's what I heard:
SM: Boy I sure hope my wife understands how to work the check book.
ME: Didn't you show her?
SM: Yea, but she's German and I always do the banking and she never understood it.
ME: Does she know how to read your LES?
SM: No I never showed her one, why?
ME: How is she suppose to know how much money she's got to spend if she can't read it?
SM: I never thought about that.
ME: Is she saving anything for the period when you return and are getting your business going again (he was self employed)?
SM: I never thought about that. I wonder how much I need to plan for?

I found many Reservists (married) who'd always run their finances and now everything was dumped into their wife's lap without much knowledge. Not only is it young service members, but ones who've been in a long time and want to have "control" or so they think. When married, both need to know the finances and how to plan ahead.

Response by SFC Michael Jackson, MBA made Mar 29 at 2015 1:27 PM

SFC Michael Jackson, MBA — Sun, 29 Mar 2015 13:27:37 -0400

Most Soldiers don't want to command knowing they have a financial problem. It creates another problems of being counseled and potentially being chaptered for financial indebtedness. Leaders with financial issues lose credibility with leadership and subordinates.
Financial issues are a huge problem.That being said, the military in recent years have been addressing this with financial readiness training and new laws that protect service members from certain financial loans & tactics. The military and congress is taking appropriate steps to curtail this trend

Response by CW5 Private RallyPoint Member made Jul 5 at 2015 9:35 AM

CW5 Private RallyPoint Member — Sun, 05 Jul 2015 09:35:43 -0400

Most Americans have debt. This isn't something new. What is different is that we provide a steady paycheck, place to live and 3 hot meals a day to 18 year olds. Life seldom provides this. The fallout is that troops acquire more debt than they probably would on the outside. That said, many on this site have got through that part of their lives and I do believe that the best way to learn is trial and error. Let them make their own mistake or they will learn nothing.
Commands should have zero involvement in loans, debt, or otherwise. These are personal decisions and we shouldn't be raising kids as well as training to fight wars.
We should continue to ask ACS (and other agencies) to provide training for all those who need it. We might even decide to add a whole day of it to BCT as I think that would be beneficial in light of the proposed retirement changes.

Overall, I turned out great and have been debt free for fourteen years. I overcame my stupidity when I hit rock bottom and thankfully, my command had no idea. Thank the Lord for ramen and pickle sandwiches.