While military members are busy serving their country, their financial situation can spin out of control. Frequent deployments and moves often wreak havoc on the finances of military families — driving them deep in debt. In fact, according to a 2012 Department of Defense study, 27 percent of military families have more than $10,000 in credit card debt, compared to 16 percent of all Americans.
Besides debt, military families are prone to fall victim to scams. Case in point: The Consumer Financial Protection Bureau (CFPB) received more than 14,000 complaints from military members about fraud related to credit cards, mortgages and loans between 2011 and 2014. And sadly, the number of such complaints increased an astonishing 148 percent between 2012 and 2013.
So it’s no real surprise that the National Foundation for Credit Counseling (NFCC) found that 55 percent of the military families it surveyed feel unprepared to deal with a financial emergency. Additionally, they learned that 60 percent have turned to non-traditional lenders — such as payday loans — for temporary help, making them particularly vulnerable to abuse.
Holly Petraeus, assistant director of service-member affairs at CFPB, visited Indianapolis this month to talk about the financial problems military families face, including illegal foreclosures while soldiers are serving overseas and aggressive collection tactics. “You think you have to be strong, so you don’t want to ask for help,” she said.
The NFCC is eager to assist military families struggling with finances too, which is why they’re offering the Sharpen Your Financial Focus program to coincide with Military Consumer Protection Day on July 16.
The program includes a personal financial review for military members, a group workshop on topics such as building wealth, smart spending and buying a home, plus access to an online personal finance tool, MyMoneyCheckUp.
NFCC spokesperson Gail Cunningham said in a press release, “Stressful situations can result in poor choices, with decisions often made out of desperation. To avoid this, servicemembers should take advantage of the opportunity to improve their financial skills, thus putting themselves in a better position to face any unplanned financial circumstance that comes their way.”