Veterans face unique financial challenges compared to their peers without military experience. They often deal with major career changes when they leave the military, which can affect their income. They also grapple with moving often, which can make it difficult for spouses to earn money, further challenging the household budget.
To help service members with those struggles, the Consumer Financial Protection Bureau recently launched a Financial Coaching Initiative aimed at the 250,000 service members who leave active duty every year and other vulnerable consumers. Based out of job centers and nonprofits around the country, 60 financial coaches are available to meet with veterans to help them get on top of their finances.
The goal, says Holly Petraeus, CFPB’s assistant director and head of the Office of Servicemember Affairs, is to assist military personnel and their families in getting the financial education they need to make better consumer decisions. “The idea is to help them proactively take control of their finances at crucial moments and end up becoming financially stable and achieving the financial goals they’ve set forth,” she says.
The coaching services are provided free of charge, funded by CFPB’s Civil Penalty Fund. “[The coaches] give one-on-one advice and encouragement, driven by the client,” Petraeus says. “When we can set up our veterans for success, it benefits all of us,” she adds.
Andrew Schrage, co-owner of MoneyCrashers.com who works on the Military Money Might blog, says veterans can also benefit from support offered by other organizations, including the U.S. Soldiers Foundation, which helps veterans secure a home, and USA Cares, which helps them avoid foreclosure. The more programs available for veterans, the better, Schrage adds. “The CFPB’s Financial Coaching Initiative will absolutely be helpful – transitioning from military to civilian life isn’t easy, especially from a financial standpoint,” he says.
While they have unique challenges when it comes to money, veterans have a lot going for them: Surveys suggest that those with military experience tend to do better on some financial measures, including goal-setting and budgeting. A survey of 1,311 people released earlier this year from the Navy Federal Credit Union found that millennial service members are more likely to have established long-term money goals and feel more prepared to achieve them. Compared to their civilian counterparts, those in the military also reported higher levels of financial knowledge and were twice as likely to say they checked their credit score once a year.
The First Command Financial Behaviors Index, which looks at financial trends among the military, reported last month that middle-class military families with incomes of $50,000 or higher are more likely than the nonmilitary population to track their finances, including monitoring pay stubs and investments, and sticking to a budget.
“We know through our research and experience that middle-income military families have a goal-oriented, mission-driven approach to personal finance that is significantly different from what we see in the general population,” says Scott Spiker, CEO of First Command Financial Services. That comes from their military experience, he adds, which often emphasizes discipline and consistency. “People come to the military seeking order, which also carries over to how they handle financial issues,” he says.