Servicemembers Benefit from Financial Management Programs, Official Says
By Gerry J. Gilmore
American Forces Press Service
WASHINGTON, Jul. 20, 2007 The Defense Department is committed to helping servicemembers and their families become good personal finance managers, a senior official said yJuly 18 in Hawaii. (Video)
Most young people leave high school without any financial management education, David S.C. Chu, undersecretary of defense for personnel and readiness, said at a National Association of Federal Credit Unions’ meeting in Honolulu.
“As a result, our people tend to possess little experience in making the financial decisions that will impact their financial well-being and their financial future,” Chu pointed out, noting that about 46 percent of military members are age 25 or younger.
As part of President Bush’s February 2001 call to improve military quality of life, he said, the department developed a social compact designed to focus its commitment in caring for servicemember and family needs.
“This social compact includes personal finances as an integral part of the quality of life in the military, and seeks to support the families’ needs by providing financial awareness, education, skill-building and counseling programs,” he said.
Having good money management skills is especially important for young military families, he said, noting that 38 percent of servicemembers age 25 or younger are married. About 21 percent of these couples have children.
“We equate financial readiness with mission readiness,” Chu said, pointing to the findings of a 2005 servicemember survey that rated finances to be more stress inducing than deployments, health concerns, life events and personal relationships. Only work and career concerns, he said, were rated as higher stressors in the survey.
The department established a financial readiness campaign in May 2003.
“Our simple goal is to establish a financial culture that instills and promotes good credit, regular savings, including savings for emergencies, retirement savings and participation in the Servicemembers Group Life Insurance program,” Chu said.
The department promotes good money management practices through ongoing education programs delivered by the service branches to military members and their families, he said.
Each year the defense department provides more than 12,000 financial education classes to more than 340,000 servicemembers and their spouses.
To enhance its financial awareness efforts, the department has partnered with more than 25 federal agencies and non-profit organizations, Chu said. For example, by working with the American Savings Education Council, he said, the department maintains a flow of public service announcements that extol the benefits of saving for the future through its American Forces Radio and Television Service.
The department also sponsors a series of worldwide financial-management seminars for servicemembers and their families as part of the “Moneywise in the Military” campaign, he said.
Last year the department kicked off its “Military Saves” campaign that urges servicemembers and families “to build wealth and not debt,” Chu said.
More than 80,000 military families took some type of positive action regarding their personal finances as the result of the first “Military Saves” campaign week that was held February 25 to March 4 last year, he said.
The next Military Saves week will be held February 24 to March 2, 2008.
“We look forward to increasing the numbers of military savers through our continued cooperation with our financial readiness partners, including our defense credit unions,” Chu said.