Military Personal Finance

The NFEC, a social enterprise council, has a stated commitment to serving our country’s active duty military personnel and veterans. As part of its American Dream Movement, the NFEC gives complimentary resources to select organizations that aid the military personnel who serve our country. The objective of the movement is to provide armed forces members with access to materials and education that will support them toward making sound financial decisions toward achieving their life goals.

Demonstrating its dedication to promoting military personal finance capabilities, the U.S. government recently passed legislation requiring financial services training and counseling for all military servicemembers. Since July 2016, USC 992 has mandated that the Department of Defense must provide comprehensive financial literacy training to all members of the armed forces.

The Office of Financial Readiness carries out the requirements of these mandates, by providing the indicated training at each touchpoint and making Personal Financial Counselors/Managers available via the Family Centers set up for armed forces personnel.

Although the mandate does not cover veteran financial education; many nonprofits and other groups are helping supply much needed education to our veteran population.  The NFEC supports the efforts of those serving active duty & veterans.

The military personal finance training must be offered at certain major points in each servicemember’s duty, including initial entry training; arrival at first duty station; at each duty station transfer; during leadership training; when servicemember becomes vested in the Thrift Savings Plan; and upon promotion, pre-deployment, or post-deployment. Training also is provided at the time of each significant life event during the member’s service, including important occurrences such as marriage, divorce, birth of first child, and/or disability.

The requirement sets forth a broad scope of military personal finance topics which must be covered in the training. USC 992 mandates the following subjects to be presented in the financial literacy instruction:

In addition to the milestone-driven military personal finance instruction, the mandate states that personal financial counseling services must be made available – upon request – to all armed forces personnel and their spouses. Financial counselors who provide these services must become well-qualified by attaining education, training, or experience to offer effective financial counseling to servicemembers. They must demonstrate freedom from any conflicts of interest, and dedication to providing helpful information and counseling around financial services and marketing practices related to military personal finance.

Several agencies have collected recent data which underscore the importance of providing military personal finance education and counseling. The National Foundation for Credit Counseling (NFCC) found in 2015 that military personnel have significantly higher debt and lower assets than civilians. In fact, 44% of servicemembers have credit card debt, with 29% carrying $5,000 or more, according to a survey commissioned by Zebit in May 2016. The Zebit survey also discovered that 63% of military respondents were experiencing financial stress, with 17% saying that stress detracted from their ability to focus on the call of duty. Further, if respondents had access to $1,000 worth of interest-free credit, 45% said they would use it for big purchases; even though a 2016 USAA survey indicated that 69% of military personnel cited saving for the future as their top financial obstacle.