Like much of the nation’s overall population, military families are feeling better about their own personal finances and the economy in general.
First Command Financial Services reports that 49 percent of middle-class military families -- senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000 -- list the state of the economy as one of their top financial concerns, the lowest level on record since the Behaviors Index was launched in 2008.
At the same time, the survey found 46 percent of military families are extremely or very confident their financial situation will improve in the next year. That compares to 34 percent of the general population who feel the same way.
However, there are still concerns that weigh on the financial situation of active duty and retired members of the military and their families.
“Federal budget cuts are a particularly important issue in the military population. Half of families report feeling anxious about sequestration, and they have responded by cutting back on everyday spending. With the lessons of the economic downturn still fresh, our men and women in uniform are preparing for more fiscal uncertainty and getting their family finances squared away,” said Scott Spiker, CEO of First Command.
Being prepared is what the military is all about. A hearing by the U.S. Senate Committee on Veterans Affairs last week focused on the issues affecting the readiness of the members of the Armed Forces to do their jobs defending the country at home and abroad.
“The financial readiness of service members and their families is essential to their well-being and their ability to contribute to the mission,” said Col. Paul Kantwill, director of legal policy at the Office of the Undersecretary for Personnel and Readiness at the Department of Defense.
“Over the course of my years as a judge advocate, I have assisted service members and their families in deployed and garrison environments, and know well that a service member distracted from the tactical mission by financial issues cannot be completely mission-focused,” Kantwill said.
In 2003, the DOD coined the term “Financial Readiness” to reduce the stress on military families and enhance overall mission readiness. The campaign involves “eight pillars of financial readiness,” including maintaining good credit, achieving financial stability, establishing routine savings, participation in the Thrift Savings Plan, retention of group life insurance, using low-cost loan products as an alternative to payday loans, using low-cost programs such as the commissary and preservation of security clearances.
The DOD has personal finance managers at every military installation to provide a wide range of counseling, education, training and services. The Financial Regulatory Authority, working with the National Military Family Association, has developed a Military Spouse Fellowship program to train spouses of active duty and retired service members with skills and resources to help military families overcome financial obstacles.
Holly Petraeus, assistant director of Office of Servicemember Affairs at the Consumer Financial Protection Bureau, also testified before the Senate committee about the flow of complaints she has received from military families. Nearly half of the 4,516 complaints received since July 2011 involved mortgages, followed by credit card complaints and bank services.
“We have helped veterans who filed complaints secure hundreds of thousands of dollars in monetary relief. We’ve also assisted many others to obtain nonmonetary relief, for example having errors on a credit report corrected, which helped them resolve problems that may have been affecting them for months or years,” Petraeus told the committee.
Perhaps the biggest challenge for the DOD will come in preparing tens of thousands on members of the military who are transitioning back to civilian life, often sooner than expected.
“As the war in Afghanistan draws to a close, it is important that we revisit the protections afforded our service members and veterans. We need to learn from the past and ensure we are doing all we can to prepare for the future,” committee Chairman Sen. Bernie Sanders, I-Vt., said.