Mandatory personal finance classes for service members?

2014-02-03T16:28:25-05:00

Part of my day job is as a wealth manager. I have helped countless soldiers as a volunteer to help get them started and I am surprised by the overall lack of financial literacy. It isn't on them, I think our education system can do a better job of it as well.

Do you think the military should make part of basic and the other courses mandatory personal finance training and encourage soldiers to budget, save, and invest wisely? There are options for this, but it isn't mandatory.

Response by SSG Andrew Dydasco made Feb 3 at 2014 4:43 PM

2014-02-03T16:43:24-05:00

Sir,

At my unit, there was a mandatory financial class (about 90 mins) during in-processing, but after that, I haven't heard a word about it from anyone. I think it should be something that is emphasized more often. We have more opportunities than most people realize, but if those opportunities aren't taken advantage of, well, we all know the stories of the PVT fresh out of AIT with the brand new mustang with a 28% interest rate... Education is everything, and I think there really should be more pressure on Soldiers to get educated on personal finance.

Response by SFC Private RallyPoint Member made Feb 3 at 2014 4:43 PM

2014-02-03T16:43:39-05:00

Sir, I think it's a great idea. I'm with the recruiting command, and I started scheduling a financial briefing for our Future Soldiers preparing to ship to basic training every quarter. Local institutions will do it free of charge and they would usually bring food too. I would tell them that they can't promote their institution because we can't show favoritism towards a particular company, and they were always fine with it. They would usually take a route like "If you decide to bank with us, here's my contact information". I think that's where it should start, because we are enlisting a lot of young adults who have never had their own money to manage. So I would bring someone in to give a class on balancing your account, writing checks, the difference between selecting Debit or Credit with your bank card, how to create a budget spreadsheet, different avenues of investment, etc. It could also be implemented as part of a unit's in-processing schedule for new arrivals, regardless of how long you've been in the service. I'm at 11 years and I know that I still need financial advice any time it's available!

Response by PO3 Private RallyPoint Member made Feb 3 at 2014 5:02 PM

2014-02-03T17:02:20-05:00

YES. YES. YES. I wish the military were more willing and open to requiring Financial Peace University. You may not be able to make it a requirement in the Civilian World, but that's the great thing about the military - you CAN make a class like this mandatory. And they should. So many young (and older) service members find themselves in a world of hurt in debt - payday loans, credit card debt, etc.... because they get wrapped up in the moment and don't learn any better.

I'm sure there are other Financial Classes other than FPU, but I'm happy to admit that I'm biased. FPU changed my whole life. I cannot wait to start our next class at my church in 2 more weeks. I've heard from a few soldiers at Ft Benning who might be attending. Shoot, if Ft Benning would let me come on base and facilitate it, I totally would!

Response by 1LT Private RallyPoint Member made Feb 3 at 2014 5:35 PM

2014-02-03T17:35:00-05:00

I've seen it pop up as SST and during NCOPD. I think it should actually be an official Army curriculum taught by SQI 8 qualified personnel; it should be added to 350-1 as initial and then refresher as needed based on command discretion.
Ad hoc or outside agencies kill the consistency of the message and often bring agendas/POVs that are not organic to the DOD.

Response by LTC David S. Chang, ChFC®, CLU® made Feb 3 at 2014 6:44 PM

2014-02-03T18:44:07-05:00

Here's another follow-up. Back in 2004 First Command got fined and was kicked off some posts since they were aggressively selling whole life insurance that wasn't necessarily in the best interest of the client. I remember at OBC a retired officer coming on post and knocking on doors of new 2LTs and using sale tactics to get clients. he got them but I think the 2LTs didn't know better. how can the military work with those type of companies?

Response by CW2 Private RallyPoint Member made Feb 3 at 2014 7:27 PM

2014-02-03T19:27:18-05:00

Sir, I take every chance I get to talk to young soldiers/officers about the power of living within your means, saving, investing, and giving. I would love to be involved in a program like this in order to educate military members on budgeting, getting debt free, and living life on their terms! I too, like PO3 Hicks, am biased when it comes to FPU. There is even a military version of it that I have seen Chaplains use to educate soldiers. Courses I would recommend are: Budgeting 101, Reducing Debt, How to build credit, Home Buying, Car Buying, Importance of a Rainy Day Fund, Saving 101, Investing 101, and Retirement Planning. Then of course there could be advanced courses as well.

Response by SSgt George Brown made Feb 3 at 2014 9:15 PM

2014-02-03T21:15:46-05:00

Unfortunately this is NOT being taught in High School. I was lucky, in order to work the last half of my Senior school day, I had to go in at 6 am every morning for a class that was done by a retired Col. This is one of the things he taught us, to settle a check book, as well as doing an 1040 EZ. There were many mornings we would listen to Zig Ziglar. The best part was, he cared for us, which even then, was a rare thing.

Response by CW2 Geoff Lachance made Feb 5 at 2014 7:51 AM

2014-02-05T07:51:55-05:00

Great idea!

Response by CPT Mike M. made Feb 5 at 2014 9:08 AM

2014-02-05T09:08:37-05:00

<p>No, sir!  There's already too much overkill in regards to required training, quarterly training, safety or suicide prevention stand down days, etc.  Not to mention, Although MANY could benefit from it, that doesn't mean those of us who can properly manage our finances should be forced to have our time wasted with everyone else.  Maintain a program that allows Soldiers in need of some education on the subject to seek out or be command directed to see the appropriate person or agency.</p>

Response by CPT Private RallyPoint Member made Feb 27 at 2014 10:46 AM

2014-02-27T10:46:19-05:00

<p>MAJ Chang,</p><p>Although I agree that some Soldiers need personal financial training, I DO NOT think it should be mandatory.  Many Service Members handle their personal finances without problems and forcing them to attend training that they do not need is a waste of time and resources.</p><p>I guess, for me, it boils down to one simple fact, our Soldiers are not children.  They are adults who should be expected to handle adult responsibilities; that includes keeping themselves out of financial difficulty.  I have read the other posts here that talk about predatory sales tactics and I admit that I fell for one when I was a young PFC.  But rather than whine about it, I paid off the debt and learned my lesson!  Keep the current voluntary assistance programs through ACS as they are and let our Soldiers learn from the best teacher: Experience!</p>

Response by SFC Private RallyPoint Member made Mar 11 at 2014 1:46 PM

2014-03-11T13:46:41-04:00

I know 13F soldiers have a mandatory financial management class. First saturday of every. So on the Field artillery side of the house they are getting this training as they get to AIT. This is an 8 hour block of instruction.

Response by MAJ Steve Sheridan made Apr 20 at 2014 10:50 PM

2014-04-20T22:50:55-04:00

I believe it should be. I've been a Dave Ramsey Certified Counselor since Jan 2002. Then in Feb 2012, published my first book http://www.WagingWarOnDebt.com to equip our Military to kill debt & create wealth. As I retire from the Army this year, I'm trying to figure out how to get my 10 Step Battle Plan to Lasting Financial Freedom in front of  every new Servicemember.<div class="pta-link-card"><div class="pta-link-card-picture"><img src="http://www.WagingWarOnDebt.com/images/FoodInsurance.jpg"></div><div class="pta-link-card-content"><div class="pta-link-card-title"><a href="http://www.WagingWarOnDebt.com" target="_blank">Waging War on Debt</a></div><div class="pta-link-card-description">Military families have experienced increased OPTEMPO, deployments, injuries, stress and separation. Any of these issues can lead to financial problems, emotional trauma, hopelessness and divorce. Whil...</div></div><div style="clear: both;"></div><div class="pta-box-hide"><i class="icon-remove"></i></div></div>

Response by SFC Randy Purham made Apr 22 at 2014 10:59 PM

2014-04-22T22:59:50-04:00

YES!!!! It should be an exposure mechanism in place to nearly force Soldiers to at least take seminars on financial management/personal finance. I discuss different financial strategies and tips in my book, but the exposure level isn't there yet. It helps young soldiers and civilians navigate the things in life we so often have to learn on our own. I recommended that the inprocessing at the unit level should consist of a financial management seminar for about a week, but it fell on deaf ears and the old adage of we are too busy is always the excuse until we got to run soldiers around to get loans, finance pay advances and etc. Bass-akwards if you ask me.

Response by SFC Benjamin Parsons made Jul 18 at 2014 12:36 PM

2014-07-18T12:36:15-04:00

I think a little education regarding credit, borrowing, and saving is a good idea. More in depth stuff available in small seminars a couple times a year for those interested.
More interested in protecting young SMs from the blood sucking predators that plague military towns. And getting the chain of command out of the business of being their collection agency.
Story: Acting 1Sgt. Had a kid being processed for separation. Not a bad kid, just not military material. ETS PDQ.
He had fallen victim to a film & camera scam (old days - good deal if one takes a thousand pictures a month) and had fallen behind on his monthly contract obligation. Attorney for scammers called me every few days. I gave him one story or another each time - till I got to tell him the kid was on a bus for his home in Chicago (Glee!).
The attorney was flustered and mad. I stayed polite.
Attorney called Post SGM and told on me. My SGM mentioned it to me one time as we passed each other in the Bn area. We both smiled.

Response by Lt Col Private RallyPoint Member made Oct 12 at 2014 7:23 PM

2014-10-12T19:23:11-04:00

I'm on-board with financial education for young troops going through basic or technical school...my fear is that this training would end up being yet another annual requirement with no regard for the member's financial status (so the young 18-year-old one-striper with a Corvette payment would be in the same class as the 12-year Major with six properties he's renting out for income and no car note).

Response by SSG Tim Everett made Dec 19 at 2014 8:37 AM

2014-12-19T08:37:36-05:00

LTC David S. Chang, ChFC®, CLU® I would have loved this as a soldier, especially whilst on deployment with a lump-sum reenlistment bonus and tax-free paycheck. Hell, even today I'd take advantage of this as a civilian.

Response by CPT(P) Private RallyPoint Member made Dec 29 at 2014 6:25 PM

2014-12-29T18:25:48-05:00

As someone who has worked with and continues to work with Veterans who demonstrate difficulities with personal finance for a variety of reasons (i.e. limited education prior to military service, mental illness, substance abuse, homelessness, domestic violence, unemployment, etc) I think that servicemembers should get mandatory personal finance classes during boot camp, during mid-career, at discharge and at (or right before) retirement. I 'm not naive enough to think that mandatory personal finance classes will end poverty for all service members but I think that mandatory personal finance classes especially for the new recruits going through boot camp is essential.

Response by SSG Private RallyPoint Member made Dec 30 at 2014 9:38 AM

2014-12-30T09:38:31-05:00

LTC David S. Chang, ChFC®, CLU® Definitely Yes. Excellent topic.

Response by CMSgt James Nolan made Dec 30 at 2014 10:01 AM

2014-12-30T10:01:00-05:00

LTC David S. Chang, ChFC®, CLU® Abso-frigging-lutely sir. Look at how many of our troops that wind up in financial disarray early on in their careers (both O and E).

Response by SFC Michael Jackson, MBA made Dec 31 at 2014 7:05 PM

2014-12-31T19:05:09-05:00

Our service members (SM)have been getting into serious financial trouble. So much, they passed laws to discourage or keep payday and advance loan places away from SM. The military is starting to mandate some financial classes. I support these efforts. There are numerous effects from personal hardships to security clearance issues professionally. Last I checked SM could be chaptered for financial indebtedness. This being the case, we need to help our men and women in uniform help themselves

Response by MSG Mitch Dowler made Jan 2 at 2015 7:14 PM

2015-01-02T19:14:34-05:00

No, it is not job of the Department of Defense to get into the business of the average soldier's personal finances. I can accept training for soldiers having specific serious financial troubles. Remember the federal government is in far more dire financial straights than is even possible for a soldier to get their self into. We have budgeting policies that encourage commanders to spend like money is going out of style at the end of the fiscal year to avoid losing any budgeted funds the next year. No, Uncle Sam is not capable of even managing his own finances.

Who is to say what investing wisely is? Is it always wise to invest in the paper products offered in the TSP? Is it really wise to pay off a mortgage ahead of schedule when we have the lowest interest rates in history? What investing can be done to offer high performing tax free returns? Who is responsible if the soldier takes the advice and loses his ass?

Response by Sgt Aaron Kennedy, MS made Feb 10 at 2015 4:58 PM

2015-02-10T16:58:39-05:00

Long ago... in a place far away when I was a young PFC I was REQUIRED to do this:

http://survival.noxinonline.info/3%20Survival%20Others/1998%20USMC%20Personal%20Financial%20Management%20%20%20152p.pdf

Personal Financial Management (Marine Corps Institute 34.20e)

It was a "Primer" and PME, and not completing it could be counted against me for promotion to LCpl. It also had a lot of good information in it.

I was also SURROUNDED by other Marines who had varying world experiences. If I wanted to learn how to do something. I asked. I know this sounds silly.. but it was pre-Internet age.

If I wanted to know how to fix a car, I asked a car guy. If I wanted to know about guns, I asked a gun guy. If I wanted to know about money, I asked an "old guy."

Response by SSG Private RallyPoint Member made Feb 10 at 2015 9:04 PM

2015-02-10T21:04:38-05:00

I don't know if I would say that the responsibility would land on the military to provide this. I can say from personal experience that when these young kids join the military at 17 (as I did) and 18 they are fresh out of high school. Financial management, unless you take very specific classes, is not taught in high school. This is something that would take a lot of time and effort, but the country as a whole needs to look at restructuring the curriculum for juniors and seniors in high school. I do agree that the military should provide some sort of training (and they do) but I'm not sure it should be mandatory. It is up to each leader individually to assess there soldiers financial abilities and if those personnel need the assistance, help them sign up for a budgeting or investing class. For the Army ACS provides some decent classes that can go a long way to helping soldiers become more financially responsible and independent.

Response by MAJ Ken Landgren made Nov 4 at 2021 2:42 PM

2021-11-04T14:42:14-04:00

I think that is a great idea. Many people do not understand the components and facets of TSP, other financial definitions, and concepts. I believe we must cover the basics like:

- What is a mutual fund and the historic returns over the long term.
- What are stocks and bonds.
- Time value of money.
- Prepare a fund for retirement.
- Risk/reward.
- What is TSP and the many facets of it.
- How interest rates impact investments and debts.
- Annuities

Response by MAJ Hugh Blanchard made Nov 4 at 2021 4:05 PM

2021-11-04T16:05:33-04:00

Yes, yes, a thousand times YES! I cannot count the number of times that young soldiers in my unit have gotten themselves into financial trouble. Most of these young soldiers fell victim to impulse buying of expensive things that they cannot afford, mostly related to cars and entertainment systems. So they buy something they cannot pay for, the salesman knows they're in the Army and garnishes their money. They end up with no net pay due for however long it takes to pay off the item.
In other cases, these youngsters have the mistaken notion that so long as they have checks in a checkbook, they can get money from their bank. The banks, of course, think otherwise. When I discussed the notion of a bank account and balancing that account, one young soldier told me, "But Sir, if I only can spend what I earn, I can't have any fun!"
So, please, please, get someone to teach these young service members the fundamentals of money management and how to use a bank account. Please don't perpetuate the risky and expensive process of paying bills only with money orders, which cost an arm and a leg, and carrying all their money around in cash, making them very liable to being robbed.