Written Lynn Goya,

 

There is a reason there are so many pay day loan operations around bases, as active duty military try to balance the financial pressures of a home life, children and deployment. Many new recruits are straight out of high school and have never had a job before. Others had part-time jobs, but had little training about how to budget for long-term financial well being. A 2009 survey by the Investor Education Foundation’s Military Financial Education Project (FINRA) released last fall revealed that it wasn’t just young soldiers who were struggling with financial issues.

 

The study revealed that almost 82 percent of service members self reported that they owed at least $10,000 in credit card debt or had taken out a home or auto loan. One in four responders reported credit card debt above $10,000; half said they made only minimum payment on their credit card balances; one in four reported significant income lost because of overdraft fees; 21 percent admitted to using high-cost non-bank loans including payday or auto title loans within the last five years; and only half had set aside money for a “rainy day” fund to be used for unexpected expenses. Although many in the military are doing better in some areas with their money than their civilian counterparts, the study revealed that military personnel are deeper in debt than the general population.

 

Of special concern are companies sprang up around military bases that often mislead young recruits about the high fees and long-term financial impact of short term loans or about other key criteria that borrowers need to be aware of when taking out those short term loans.

 

Thanks to FINRA, the need for short term loans may be decreasing for those who have taken advantage of their program. FINRA offers free, unbiased tools and training on base to help make military personnel and their family members more financially savvy. The 2006 program, that partners with the U.S. Department of Defense Financial Readiness Campaign, is paid for through fines levied against the firms that take advantage of many in the military with little track record of developing and maintaining a healthy financial life.

 

The program provides instruction on wide ranging financial topics including credit management, buying a home, planning for retirement, teens and money, saving for college, how to buy financial products, how to prepare for deployment and car buying tips. There are specialized programs that help those over 55 with fraud prevention by less-than-scrupulous “advisors” targeting investment portfolios. The program also offers many online tools at http://www.saveandinvest.org/.

 

The program also reached out to military spouses with fellowships to train a cadre of financial experts. In conjunction with the Association for Financial Counseling and Planning Education (AFCPE) and the National Military Family Association (NMFA) nearly 1,000 spouses become Accredited Financial Counselors, helping them to obtain marketable jobs as well as help fellow military personnel. Biographies of many of the newly trained financial counselors from the five year program can be found here.