Financial readiness can be a challenge for soldiers

When Mechel Glass left the Army to return home at age 21, everything was different for her. She was unemployed, her friends had left and she was nearly homeless.

"The Army paid for my food, lodging and nearly everything else," she said. "I should have had a big nest egg, but I had nothing to show for it."

Glass channeled that despair and helplessness to pay it forward. She now works for a national nonprofit financial counseling agency, Clearpoint Credit Counseling Solutions in Atlanta, and has written a book to help soldiers with managing money in and out of the military.

While many members of the military score well on financial literacy tests, the average credit score of an active member of the military is 592, compared with 692 for civilians, Glass said. "They also have a higher likelihood of bankruptcy," she said.

Members of the military are generally paid well, but the lifestyle can present special issues. Frequent moves are a primary concern for many singles and families. A lot of military families have purchased a home and when they move, they may end up with two mortgages or two rent payments.

There's also the stress of combat fatigue. "Soldiers go into credit card debt because they worry about not surviving until tomorrow so they look into having fun and living for the moment," Glass said.

In fact, nearly half of military members who have a credit card reported costly behaviors such as paying the minimum, paying late fees, paying over-the-limit fees or using cash advances from their credit cards, according to a 2012 survey of 1,300 service members by FINRA Foundation.

The military has several options for soldiers and families who have financial concerns. But Glass said that some soldiers avoid military help because admitting to serious debt could result in a security clearance downgrade or worse. "Some search 'military loans' online and find less-than-reputable sources. It's a big issue."

Finances are one of the top five concerns for military members. But it's also one of the easiest to mitigate as it affects security clearance, said Capt. Ron Jarvi, Resilience Risk Reduction and Suicide Prevention program manager in the National Guard in Cottage Grove.

Soldiers can show they're on the right path, even seeing a financial counselor, to avoid a security downgrade or suspension. "I am not aware of any separations recently due to financial issues," he said.

Craig Hovland is a personal financial counselor who works with the National Guard in Minnesota. He's a civilian contractor who builds relationships with Air Guard and Army Guard soldiers to establish trust. "My passion is to help people and build relationships so they feel free to contact me about anything financially related."

Confidentiality is important. Hovland's not going to report a financial issue to a soldier's commanding officer unless the person is in a position to harm others or self. Meeting with a counselor is usually of a soldier's free will. Soldiers may get other mandatory training on life insurance or savings programs, but advice from a personal financial counselor is generally only a suggestion. "They have to own it. There is no hand holding," he said.

Master Sgt. Emmett Klucas, 35, of Little Falls, Minn., isn't convinced that members of the armed forces experience more financial hazards than anyone else. "We have access to personal finance counselors, but people don't reach out for them like they should," he said.

He and his wife went through a financial rough patch before his deployment, early in their marriage. He took out loans for ATVs and other nonnecessities and was soon $13,000 in debt. With financial counseling from the military and radio host Dave Ramsey's Snowball Method (paying off debts in order from smallest to largest), and steadfastly avoiding any new vehicles, they got out of debt.

"We looked for good role models around us and made an agreement pact to get out of debt in two years, and we did it," he said.