- - Friday, July 4, 2014


On the Fourth of July, we think of the colors of independence as red, white and blue. But for many of our service members and veterans, the color of their own independence is green.

Having a secure financial outlook is key to finding stable housing, caring for your children, and planning for your future. It’s also a major factor in whether a veteran will face serious problems like bankruptcy or even homelessness.

Yet, all too often, members of our nation’s military struggle with personal financial problems. Being in the military can be tough on your pocketbook, especially when you are just starting out in life.

Recent studies of the military community show that not only do service members face many of the same financial problems as everyday Americans, but they also struggle with unique situations as a result of their service, such as having to move frequently. This makes it even more important that they have good credit and strong financial management skills as they make the transition back into civilian life, go back to school, and buy homes.

Education is the key to good credit and proper money management. Without it, service members and veterans often lack the skills and knowledge to establish good financial behaviors.

Establishing good credit and positive personal finance behaviors early in adulthood helps prevent financial crises in the future. Good credit is vital in providing necessary things for service members, veterans, and their families, such as homes and cars. It is paramount they have good enough credit to secure the crucial loans to obtain these necessities.

Yet a recent study of more than 1,000 veterans of Iraq and Afghanistan
in the American Journal of Public Health found that 30 percent had problems with money management and nearly one-third had gone over their credit limit, written a bad check, or been sent to collections.

And according to a report by the Financial Industry Regulatory Authority, 35 percent of military service members have used at least one alternative borrowing method within the past five years, with pawn shops listed as the most commonly used.

Fixing bad credit after years of poor money management can be a long, costly process, which is why we need to work to prevent these kinds of fiscal hardships throughout the military community by providing financial literacy education and opportunities that help them get out of debt and invest in their future.

This kind of education could even help prevent more serious problems. Poor financial literacy can only compound existing personal problems if it causes service members and veterans to pay high fees on their credit cards and rely on pawn shops and payday lenders.

Interest rates on loans offered by some payday lenders which target military families can exceed 80 percent, according to an analysis by the Consumer Federation of America. And studies have shown that veterans make up about 20 percent of Americans without stable housing, even though they are less than 8 percent of the population. We need to find alternatives to stop these problems before they start.

Groups such as the PenFed Foundation are working to ensure their financial literacy programs make a big impact on our military community. We’ve tied financial education into our programs that help service members and veterans buy their first home, obtain short-term housing while undergoing medical care, and receive emergency short-term loans.

After more than a decade of conflict, it is our duty as a community and a country to support our military as they transition into civilian life and to provide service members, veterans, and their support networks with the skills and resources they need for a sound and secure financial future. It is their right and our responsibility to give them the help they deserve.

Together we can change lives through financial education, credit building, home ownership aid, and access to short-term loans and quality health care, but we can only do this together. Because saying thank you, although welcome and appreciated, is not enough to show our endless gratitude and respect for their service and sacrifice.

This Fourth of July, as we honor those who helped secure our independence, let us work to ensure that our service members and veterans remain independent, too.

Jane Whitfield is president and CEO of the Pentagon Federal Credit Union Foundation (PenFed Foundation), a nationally recognized nonprofit organization working to meet the unmet financial needs of military personnel and their families. PenFed (Pentagon Federal Credit Union) covers all labor expenses for the foundation so nearly every dollar donated goes directly to supporting its programs. For more information, click on www.penfedfoundation.org.

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