Financial education is becoming increasingly important to prepare those in the military with long-term financial strategies needed to survive in an economic downturn.
The current recession is especially hard on younger military service members who haven't been through an economic slowdown, and have never juggled tighter finances. Young military service members are making more money, but don't have experience of knowing how to keep it.
Military financial readiness programs are not only popular, but mandatory at first-duty stations and they are often offered free of charge. "Financial Peace University," is one such financial military readiness educational offering. Soldiers at Camp Victory in Iraq got their financial education in December 2008, and commanders say that training goes a long way in promoting battle readiness.
The military recognizes that military servicemembers stressed about money are likely to be distracted during a mission. Military servicemembers can also lose security clearances because of financial mismanagement. More than ever, financial readiness has a direct impact on military readiness.
Financial Peace University is a 13-week course available to military servicemembers and their families free of charge. Created by Dave Ramsey, best-selling author and speaker on personal finances with a specialty in US military service members. Financial Peace University has been completed by approximately 3,000 troops since 2001.
Ramsey's "Financial Peace University" supports military families not only to remove debt, but also to create a plan for a successful financial future. Topics include budgeting, saving for emergencies and retirement, paying off debt, giving to charity, cash flow planning, and school loans.
As they learn, although military service members receive some buffers, they are not recession-proof. While today's military service members receive benefits such as meal allowances, housing, and a community for support, these benefits are not a shelter from the realities of mounting debt that can quickly land the military family in trouble.
Easy access to military credit and a taste for instant-gratification have added to the woes of an entire military generation overwhelmed by debt. A common mistake is not saving enough money to cover unexpected costs. Many military service members are living paycheck to paycheck and counting on a fixed income and fixed expenses - leaving no room for the unexpected.
In a survey conducted by the Military Family Research Institute, 56 percent of enlisted service members are reported to have financial difficulty, and 40 percent feel that their debt is out of their control. A 2006 Seaport Magazine report indicated that financial difficulties are the main reason sailors lose their security clearances. Often, military service members who don't know how to manage their financial situations end up falling prey to high interest loans or quick-fix solutions.
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