Could your family survive a financial emergency?
New findings revealed 27.4% of service members don’t have access to $500 for an emergency, according to recent results of the 2019 Military Family Support Programming Survey. An additional 23.5% of all respondents had no idea where they would go for help in a financial crisis.
The survey was conducted by the Military Family Advisory Network — an organization connecting military families to the resources, people, and information they depend on to successfully navigate all phases of military life. Dr. Shelley Kimball, senior director of research, expanded on some of the challenges named in the comments of the survey.
“Our respondents said that their obstacles to growing their savings are the cost of living, including expenses and bills; moving expenses; costs related to children; as well as employment difficulties,” she said.
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The research supports commonly-heard experiences of service members, like Petty Officer 2nd Class Daniel DiCroce.
“I had no money put away and was living paycheck to paycheck most of the time. I was new to the Navy and had a lot of bills and was just not managing,” he said.
DiCroce’s situation is not unique: it’s hard to learn to manage money. And when faced with an unexpected expense, the lack of management can turn into an emergency.
“I already had no money so when something big and unexpected would come up it would be put on a credit card,” DiCroce said.
During its analysis, MFAN identified two solutions for helping military families improve their financial readiness:
- Inform and educate military and veteran families on the relief assistance available and reduce barriers (perceived and real) to securing emergency assistance.
- After meeting immediate needs, work with the whole family to create a budget that is attainable for the family.
This two-pronged approach is important — addressing immediate needs, and then creating a plan to move forward.
Securing emergency assistance
Military families facing a financial crisis have a variety of options for immediate assistance. Don’t be shy about using them! These resources exist for a reason: to help you.
Usually, the first stop is your branch’s relief society: Navy-Marine Corps Relief Society, Army Emergency Relief, Air Force Aid Society, and Coast Guard Mutual Assistance. Depending on the branch, you may be eligible for loans and/or grants, and financial counseling.
Then, look to your local community. Food banks, utility assistance programs, diaper distributions, and faith-based charities exist everywhere. In areas of military concentration, there may be programs specifically designed for the military, such as San Diego’s STEP program. If you have trouble finding the right program, ask your relief society contact, your installation’s personal financial counselor, or reach out to organizations like 211.com or Aunt Bertha.
Depending on the nature of your emergency, you may also find help from veterans organizations like the Veterans of Foreign Wars or the American Legion.
Creating a financial plan
Once you’ve gotten past the crisis, or if you’re trying to avoid getting there, you’ll need a plan. A solid financial plan involves both education and action.
There are so many places to learn about money and create a financial plan. Daniel, our previously broke service member, told me, “Knowledge is how I made the change, listening to podcasts, Dave Ramsey on the radio, and any financial book I could get my hands on.” This is a great approach. So where should you start? That depends on your personality and how you learn best.
Your installation should have a personal financial educator, usually located in the family support unit. You can set up an individual appointment or attend their group classes. Your command may have someone within the command who helps with financial information, or they may bring someone in to the command for visits.
Military specific programs like MFAN’s MilCents and Navy Federal’s Making Cents can help you understand the basics of personal finance as it applies to military families.
There are also books, podcasts, and blogs devoted to personal finance, and some specifically for military families. For books, I recommend Doug Nordman’s “The Military Guide to Financial Independence and Retirement” or Ramit Sethi’s “I Will Teach You To Be Rich”. For podcasts, I recommend the Military Money Podcast or Stacking Benjamins. Besides my blog, I recommend The Military Guide, Military Dollar, or Rich on Money. Many people have had great success with Dave Ramsey’s plan, which can be found on his radio show, online, in books, or through classes.
While you are learning, be wary of financial education provided by anyone who could potentially make money off decisions you make, such as “financial advisors” who sell expensive investment or insurance products. And also remember that even financially successful friends and family may not have the right information to help with your unique situation.
Along with education comes action. You have to build a plan that works for your family’s unique circumstances, and then you have to work the plan. It can be hard, but the results are absolutely worth it. Building an emergency fund is an important first step, Kimball says.
“For any family, building an emergency fund is key. Finding resources like MFAN’s MilCents to assist in reviewing finances, developing a budget, and saving money for unexpected expenses will go a long way toward financial health,” she said.
Military families have a wealth of resources to take control of their finances, and the income to put their plans into action. If you’re in a financial crisis, reach out for help. If you are just one step away from a crisis, take advantage of these resources to help build and implement your plan so that you’ll be prepared for whatever life throws at you.