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Financial advice for a successful military career

Many military families are already aware that financial problems can often have an impact on a service member's ability to carry out his or her duties. Recent reports have highlighted this issue, including one released in 2003 by the Department of Defense and the Rand Corporation. The study revealed that financial difficulties could have significant mission impact, such as requiring an individual to return from a deployment to resolve a financial emergency.

In the military, financial problems are often the first listed by leaders when asked about personnel problems. Often, "immaturity, a lack of spending restraint, and naiveté regarding financial matters [are] the most significant drivers of financial problems." And if a military family does experience financial difficulty, it can be a long path to recovery due to lower than average pay, the near impossibility of service members to get a second job, and difficulties with spouses finding employment due to frequent moves.

But research also shows that this problem can be addressed with comprehensive financial education. The National Council on Economic Education reported that nearly 50 percent of the adult population receives a failing grade on basic economic knowledge. But it also noted that just 10 hours of financial education could improve spending and savings habits.

This booklet is intended to provide a reference guide to the fundamentals of personal financial management. Specifically, it focuses on how to get military families on a solid financial footing. Stressing both discipline and training, this guide was developed from 20 years of experience working with military families, and is aimed at helping them better understand their finances. The topics presented include:

  1. Everyday spending — Knowing where the money is going is the first step.
  2. Emergency savings — How to set aside money for unplanned expenses.
  3. Saving for the future — Thrift Savings Plans and other long-term savings.
  4. Credit bureau — Why scores matter and how to protect against identity theft.
  5. The cost of borrowing — How to discover the true costs and break the debt cycle.
  6. Credit insurance plans — Managing risks and controlling costs.
  7. Saving habits for children — Good financial habits start early.
  8. Reading the fine print — All the fees and costs associated with borrowing.
  9. Deployment issues — How deployment and PCS can affect finances.

The goal is to provide complete, accurate and usable information so every military family can gain essential knowledge, be good stewards of their finances, and help those that serve focus on their primary mission. And by including the tools and resources to equip military families to act, real change can occur. Because information without execution is meaningless.

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