130730-01Financial Readiness, a Soldier’s responsibility




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Financial Readiness, a Soldier’s responsibility

By USASOC Public Affairs

FORT BRAGG, N.C. (USASOC News Service, July 30, 2013) -Just outside the main gate of most large military installations in the U.S.,  the avenues are lined with businesses displaying signs offering easy credit, no-money-down car purchases and easy to secure payday loans. 

Fort Bragg is no different. This busy installation adjacent to the City of Fayetteville, located in central North Carolina, is home to more than 60,000 Army and Air Force service members and their families. For many of these military members, this is their first duty station after completing basic training and technical schools. They now have a steady paycheck with wants and needs. 

Most installations offer financial readiness training to Soldiers upon request, usually through the Army Community Service or Community Service Center.

The structured training introduces the tools to manage money wisely and make informed purchasing decisions so the Soldiers are better able to concentrate on their military duties.

Financial readiness means ensuring Soldiers and their families are provided for within the limits of their income. Readiness becomes an issue when Soldiers with money problems are unable to focus on their missions, especially when deployed.

Master Sgt. Tony A.  Colon, is a resource manager with the U.S. Army Special Operations Command with more than 23 years of military service. As the saying goes, he has been there and done that. 

“As a young Soldier,  I thought that was the way to go, buy things, use the pawn shops, consolidate bills into one and use loans to pay off other loans,” said Colon. “During my first 10 years in the Army my personal debt was slowly building up to a point that I could not cover the payments.”

In 2001, Colon married Carole. 

“Carole had nine kids from a previous marriage and debt free, I on the other hand, had three children and huge debt,” said Colon.

Together, they began the journey of getting out of debt, accomplishing that goal in less than two years.

When not on duty, Colon is a volunteer and certified financial counselor advising military and civilian members on methods to eliminate debt and build wealth.

“We work on building the individual’s financial IQ,” said Colon.

What the Soldier wants does not always equate to his or hers needs. The steady paycheck gives the Soldier the ability to purchase a new car, a new stereo system and often, getting married and starting a family.

The failure to balance the financial responsibilities can lead to undue pressures. The Department of Defense’s Financial Readiness Campaign called Military Saves, reports that nearly 43 percent of American families spend more than they earn each year, and the average household carries some $8,000 in credit card debt.

Statistics reveal that more than half of the divorces in America cite financial stress as the leading cause of the breakdown of marriage adding that money is the top source of psychological stress for adults.

“The Army has the responsibility to prepare the Soldier for filling his role in the field and at the same being able to handle the mental challenges,” Colon said. “When a Soldier has outside stresses, such as financial problems, the mental stress can directly affect his or her performance.”  

“Financial responsibility is about changing behavior,” said Colon. “We can teach a Soldier how to balance a check book, that’s basic math, but changing the behavior of buying things on credit, that’s mental.”

Shawn M. Anderson, an Internal Review Auditor with the  U.S. Army Special Operations Command, says that the problem with debt is the insidious nature of steady increases during a Soldier’s career.

“It is our 10 to 15-year NCOs who find themselves in an ever increasing debt cycle,” said Anderson. “It is possible that almost 85 percent of NCOs are in financial trouble, and of those, only about one-half of them realize it. Of that number, 25 percent are in serious trouble.”

“There are several factors that account for this, but it comes down to living above their means,” said Anderson. “Early in the Soldier’s enlistment, they have a steady paycheck and purchase items they could not afford before coming into the Army.”

Steady promotions increase the pay and as a result, more money is available for more purchases, often on credit. The Soldier also receives extra income when deployed. The extra income gained by promotions and deployments develops overconfidence in one’s ability to handle more debt. This type of income is not sustainable and leads to an ever increasing debt cycle.

“Soldiers need to look at income and the necessary expenditures to set a budget,” said Colon.  Colon explained that every budget starts with the money required for food, housing, and transportation. Money left over covers debt payments and hopefully, a savings fund.

“Setting money aside in a budget for the unexpected is very important,” said Anderson. “Regular living expenses are first draws out of income, but planning for periodic expenditures is more difficult unless one has a plan in the budget.” Anderson explained that an unexpected car repair or medical expenditure can put a budget in jeopardy, and failing to plan for these types of expenses leads to using credit, further complicating a budget and potentially adding more debt.

“I try to save money by doing many of the things myself instead of paying others,” said Anderson. “I use the Fort Bragg hobby shop for car repairs I can do myself.”

The Military Saves website suggests ways to set up budgets and eliminate debt. The site, PowerPay.org offers suggestions how to plan for debt management and developing a savings plan.

Businesses outside the gate use marketing skills to promote their products geared to attract Soldiers. Information guides and demonstrations of financial responsibility by the Army’s support centers and free financial consulting are tools for Soldiers and their families to understand those marketing pressures, avoid the easy credit choices and develop a better understanding of money management.