As we celebrate Veterans Day this month, the Financial Counseling Association of America (FCAA) recognizes the commitment and sacrifices of our veterans and military service members. Not only do they dedicate their lives to protecting our nation, but they also experience unique financial challenges as a result of their service. Thankfully, credit counseling agencies can be a financial lifeline to veterans, active military personnel and their families.
From frequent relocations and deployments to adjusting to civilian life and healthcare challenges, service members face very different financial strains than the average American. This makes finding military-minded, trustworthy financial advice important.
The Financial Counseling Association of America is comprised of non-profit member agencies that provide financial advice to veterans and active military members. These agencies offer trustworthy counseling and unbiased recommendations to help individuals improve their credit, pay off debt and create a realistic budget.
Many of our FCAA credit counselors have experience helping active military members and veterans. In this article, we talked with a few of them about credit counseling for veterans, including the financial challenges unique to military life and ways a credit counselor can help.
Financial challenges for service members and veterans
Frequent moves and varied costs of living
Receiving orders to relocate is a normal part of military life. The average permanent change of station (PCS) lasts two to four years but can be shorter or longer. Though the military provides a budget for moving, expenses can easily exceed the budget. If you move every two years and lose money each time, that is a problem!
“PCS moves can create unique challenges for active-duty personnel, resulting in unanticipated expenses and big disruptions in your budget,” said Max Fay, managing editor of Military Money, part of InCharge Debt Solutions, an FCAA member.
Lara Ceccarelli, a credit counselor for American Financial Solutions and wife of a first-class petty officer in the Navy, agrees: “Military personnel are faced with the challenge of balancing budgets with expenses that change frequently. A household expense sheet in Washington state might look very different from the costs of living in Georgia!”
In some cases, household needs may remain the same, but a shifting cost of living can significantly impact service members’ budgets. “It’s common to see your total pay decrease if you’re moving from a high-cost to a low-cost area,” added Fay. “This can make budgeting difficult.”
Deployments also impact service members’ budgets, according to Lori Stratford of Navicore Solutions, another FCAA agency that offers credit counseling for veterans. “Deployments can cause a temporary disruption in household income and require military members to manage their finances from a distance, increasing the risk of missed payments or financial mismanagement,” said Stratford.
Unstable employment for military spouses
Frequent moves and deployments often prevent military spouses from maintaining consistent employment. According to Ceccarelli: “Spouses often find it challenging to build stable careers due to constant moving. Households are left relying on a single income as they juggle these changes.”
Consistent, trustworthy and affordable childcare is another consideration. Some locales may not offer acceptable childcare options, limiting the spouse’s ability to work. The active duty service member may be deployed for extended periods of time while the spouse and children remain at the base, far away from the support of family members.
Financial instability
Given these unique challenges for service members and their families, “military personnel must look at all financial decisions through the lens of instability,” said Ceccarelli.
“All the regular choices an average consumer makes – whether to rent or buy a home, whether to lease or purchase a car, whether and when they can afford to start a family, etc. – must be considered in the context of 1) current circumstances, and 2) the certainty that those circumstances will change within five years,” she explains.
Difficult transition to civilian life
Transitioning from military service to civilian life can also be a major challenge.
“Veterans may struggle with finding employment that matches their military skills, leading to underemployment or unemployment,” said Stratford. “The transition may also involve navigating complex benefits systems like VA health care, disability claims, VA loans and pensions. These may pose challenges, particularly for those unfamiliar with government programs.”
Fay agreed. “For those with physical or mental health conditions, treatment and recovery can drain financial resources, even with VA benefits.”
Though veterans receive healthcare benefits, Alex Borge, a counselor at DebtHelper.com, has seen veterans struggle with healthcare appointments delayed for months.
“If they are looking for immediate assistance, they have to go to the ER or urgent care – often out of pocket,” said Borge.
How credit counseling can help
1 – Credit counseling helps military members keep their jobs and pay their debts
“Having debt can derail a military career,” said Fay. “Debt makes it harder to get or maintain a security clearance, which can prevent you from advancing in your career. In some cases, it can even get you kicked out of the military.”
A service member named Amanda was in a similar situation and contacted InCharge Debt Solutions for help. Amanda shares her story:
“Through some immature life choices early on, I really put myself at a disadvantage when I was enlisting in the military. Eventually, I found [InCharge], which seemed too good to be true. … Now, fast forward two years, and I’m 50% down on my debt owed, and I still have my military job.”
2 – Credit counseling helps veterans and service members with budgeting and credit card debt
An Army veteran named Douglas received help from FCAA member Navicore Solutions. He shares his story:
“I thought I could handle [my debt] by taking out ‘just one more’ card and making minimum payments. I was so busy opening up new cards that I didn’t know what was to be transferred from which card to the next,” said Douglas. Then, he was diagnosed with post-traumatic stress disorder (PTSD) and became homeless.
After developing an alcohol dependency, Douglas moved into a VA Hospital and entered the military’s substance abuse treatment program and PTSD program. There, he connected with Navicore Solutions.
“I’m very happy to have found Navicore Solutions. I like that they are a non-profit organization and work hard to represent me. They have reduced the interest I pay on my debts, sometimes to zero,” he said.
“The counselors I talked with made important suggestions for me to consider and made perfect sense to help me eliminate my monstrous debt,” he added. “I may have been just one small client to them, but they made me feel like I was important to them. Since I started the debt management program, creditor calls and letters have been eliminated.”
3 – Credit counseling helps military members with financial education and housing counseling
Borge at DebtHelper.com works with the Palm Beach County Community Action Team on the local Parks to Work Program. One of the veterans helped through the program was a retired homeless Navy veteran named Mark.
DebtHelper.com and other organizations offer classes to homeless veterans. In Mark’s case, these groups helped him find housing and employment.
“They’d come through and teach us how to get financially better,” shared Mark. “PNC Bank came out and worked with DebtHelper.com to get us bank accounts and checking accounts.”
“A lot of the financial stuff is what has kept me still going after the program. That information has helped me to save and not spend as much because I’m not working as much. Now I’m really great at that.”
4 – Credit counseling helps veterans and service members avoid bankruptcy, negotiate with creditors and make a plan to repay debt
When retired Army veteran David was paralyzed in an accident, he was advised to declare bankruptcy due to required back surgery and pre-existing debt.
“It would have been an easy solution, but I didn’t want to do that,” said David. “I acknowledged that the indebtedness had come through my own efforts, so I wanted to repay it.”
He contacted the creditors, but they were not interested in negotiating. Then, he connected with American Financial Solutions, an FCAA member agency.
“They were able to negotiate a $975 a month payment, which was reasonable, and I was joyful,” shared David. “The benefit of the counseling services is that they work with you to make sure you have sufficient money to pay that monthly stipend. The greatest joy is to watch as the creditors are paid off.”
Budgeting and debt management advice for veterans and active service members
One of the FCAA’s goals is to increase the overall financial literacy of consumers across the U.S. We asked our credit counseling experts what advice they would give to to address military financial challenges:
Fay’s advice
“For military members and veterans, planning and flexibility are the keys to financial success. Create a budget that reflects your specific needs, such as medical expenses, savings for retirement, and any gaps between military benefits and civilian income. We recommend building an emergency fund that can cover at least three to six months of expenses. This is crucial, especially for military families facing sudden relocations or deployments.
“In terms of managing debt, seek help early. If debts are overwhelming, programs like a debt management plan can offer reduced interest rates and more manageable payments. Avoid high-interest payday loans, which are sometimes marketed to military members.”
Ceccarelli’s advice
“It’s especially important for military personnel to live below their means and build a cushion – rather than relying on lines of credit – so that they are not left overextended if they find themselves with sudden increases in their cost of living.”
Borge’s advice
“Be aware of the restrictions on VA loans and take advantage of housing counselors if you are facing foreclosure. Also, cut the cord on cable, reduce or eliminate streaming services, use coupons, and buy only essential items. Military members can also check Benefits.gov for additional benefits and ask your community for resources.”
Stratford’s advice
“Military life can be hectic, so regularly tracking income and spending ensures better control over finances. Factor your military benefits into your budget, and use those benefits to ease financial burdens.
“The Servicemembers Civil Relief Act (SCRA) allows military members to cap interest rates at 6% on pre-service debts during active duty. Consider VA home loans, which often require no down payment and offer lower interest rates. Use the GI Bill to cover tuition and other education-related expenses.”
FCAA cares about your financial future
We send a heartfelt thank you to our veterans and active-duty members of the armed forces for their service. And we want you to know that the FCAA and its member agencies are ready to help increase your financial security!
Our non-profit financial counselors provide trustworthy advice about money management, debt management and understanding your credit score. If you need help with budget planning, try our free online Debt Freedom Tool. This easy budget calculator helps you obtain a realistic picture of your financial situation.
Please contact us if you’re ready for credit counseling for veterans and active military personnel. We’ll connect you with a certified credit counselor who can help.
Please visit the websites of the FCAA members quoted in this article for a list of financial services they provide.