Story by Erin Wittkop, Defense Media Activity
For many, the phrase “fit to fight” conjures images of service members at the top of their physical game, ready to endure the demanding tasks that life in the combat zone requires of them. Physical prowess isn’t the only facet of fitness that keeps a warfighter on top of his or her game, however.
Financial fitness is crucial to service members’ success, too. Knowing that personal finances are in order will give them the peace of mind to focus on the task at hand, rather than worrying about their portfolio and putting their safety and mission at risk.
Barbara Thompson, the Defense Department’s Office of Family Policy, Children and Youth director, shared some tips during a recent interview to help service members keep their finances on track.
“It’s really important for our service members and their families to live within their means. In order to do that, you have to have a budget, you have to be disciplined and you really have to want to understand that having a debt load hurts your credit scores, hurts your ability to move forward, hurts so many things,” she said.
While she acknowledges the challenges of managing your money, Thompson wants service members to realize that they don’t have to shoulder this responsibility alone. “We want to make sure people know [their finances] are under their control with support.”
She cited a host of resources available to help service members get a handle on their finances, including:
- On-Installation Financial Counselors – one-on-one appointments are available to help troops and their loved ones understand financial management from budgeting to debt reduction
- Military OneSource – offers up to 12 counseling sessions, in person or over the phone, with a financial counselor per financial issue (e.g. building a budget, paying off credit cards, consolidating and reducing debt)
- On-Installation Banks and Credit Unions – frequently offer financial management workshops, budget assistance and short-term, low-interest loans for emergency situations
- SaveandInvest.org – offers free tools and calculators to help start and maintain a budget
Thompson suggests that service members and their loved ones make sure they’re paying off their credit card balance every month, warning against the perils of paying with a high interest rate on lingering balances. “If we’re living within our means, we’re using the credit limit on that credit card to purchase things that are maybe ‘wants’ but not ‘needs.’ The idea is to become that disciplined person to know what your limits are,” she said.
She noted also that severe credit card debt can lead to the loss of security clearances, relationships ending and the potential for bankruptcy and strongly encourages anyone to reach out to a financial counselor for help if they fear they’re moving down this path.
While reducing or avoiding debt is very important, it’s not the crux of financial fitness. “It’s not all about debt reduction. The idea is that you come up with a spending plan of what’s important to you, and [also put away money] for savings,” Thompson said. She recommends that every service member have a minimum of $500 in savings to cover unexpected expenses like car and home repairs, moving costs or other life events.
“We know our service members and their spouse are saving. That’s a really good indication that they understand the power of saving. [It's our goal] to provide the education and the tools in order for people to build up their financial flexibility and to meet their dreams.”