As a Marine veteran of Operation Iraqi Freedom, celebrating Veterans Day has always been important to me. Honoring active and retired vets, Veterans Day honors and pays tribute to the Americans who are willing to do the most anyone can do for his or her country – give their life to protect our nation. Today, I join all Americans in saluting those who have served in the military – both in peace and wartime. Today and yesterday, the willingness of men and women to rise to the call of protecting our country is what keeps our freedoms alive.
After recently reading some troubling financial statistics, I’d like to help these heroes as only a wealth management specialist can. Military vets hold more credit card debt than U.S. civilians, on average, making it difficult for many families in the armed services to save for a more advantageous financial future. According to ConsumerCredit.com, military families are 13% more likely to owe more than $5,000 on credit card bills, and 10% more likely to have at least four credit cards.
On this special day, I’d like to provide some advice for anyone in the military looking to avoid costly debt and save more money. This exercise also reminds me of 30 years ago, when I was on active duty and used to help counsel young Marines who were struggling financially. It can be particularly challenging for members of the armed services, many of whom are young, are in areas with a high cost of living and haven’t been taught the fundamentals of setting budgets and avoiding debt. But, as in other areas of life, these skills can be learned with dedication and patience.
What the armed forces teach – and how it can help finances
Discipline and responsibility – the foundation of any military organization. These two pillars can also be the foundation of a strong battleplan for individual financial strategy. I learned the “basic training” of effective budgeting from my father. One of the first lessons he taught me, when I was just 15 years old, is the power of “thirds.” After one-third of your paycheck goes to deductions (taxes, retirement, savings etc.), set aside one-third for savings and one-third to pay for bills and expenses. If your current situation doesn’t allow for this, at least set a savings goal and stick to it as if it were a bill due every month. But I’d also like to further share what I think are a few of the most important strategies for a sound financial lifetime.
3 financial options for veterans
1| Take advantage of membership opportunity in credit unions
In many cases, one important financial benefit to being in any branch of the United States armed forces, retired or active, is automatic eligibility for credit union memberships. Credit unions can be great places to get loans at significantly reduced rates, consolidate higher interest outstanding debt to lower rates for affordability, and save money at higher rates than are available with most banks. After all these years, I’m still a member of a military credit union and typically find them to be the least expensive way to attain credit.
In addition, many military credit unions offer lower or no minimum balance requirements to open checking and savings accounts, and don’t charge members with monthly service fees or ATM charges. Over time, the advantages of these perks can make a real difference to a veteran’s financial bottom line.
And by the way, you don’t have to be in the military to become a credit union member. There are more than 5,000 credit unions across the United States, with financial institutions spread across all 50 states.
2| Contact armed forces relief societies for help
When I was in the service, I saw the Navy-Marine Corps Relief Society provide help to those in need. Similarly, the Army, Air Force and Coast Guard all have branch-specific charities that work to offer assistance in the form of emergency loans, relief funds and financial counsel.
For example, if someone in the service lost a family member unexpectedly, a relief society might be able to provide a low-interest emergency loan to travel to the funeral. In many cases, the money would be paid back by being debited from the service member’s paycheck, avoiding future debt.
3| Explore VA loan options if looking to purchase a house
VA home loans are worth exploring for active and retired military members. Owning a home is the biggest purchase most Americans will make and can be a significant wealth builder for families and individuals. VA home loans are easier to qualify for than conventional loans, offered by private lenders and backed by the U.S. Department of Veteran Affairs.
There are many advantages of VA loans for veterans, but two of the biggest are no down payment and no private mortgage insurance (PMI). These combined can save a large amount on the purchase of a new house in just the first few years of a loan.
I highly recommend getting your eligibility certificate prior to shopping for a home. If you don’t have it already, it can take a significant amount of time to attain. Getting eligibility early can help to work with a lender and accurately budget a monthly mortgage expense. Then, you’re ready to shop for a home.
Turning the corner – it can work
Many years ago in the service, I knew Marines who seemed like they couldn’t spend their money fast enough. They would blow through their monthly budgets before they would even get to the next paycheck. Over time, I was able to introduce many of them to the value of regular monthly investments. And to their credit, most were eager and ready to learn, igniting investment flames and turning embers into infernos. Investing and saving became a regular way of life for many of them. Their conversions made me feel like I’d been able to help fellow Marines with their personal financial growth and it was extremely gratifying to watch.
You don’t have to be wealthy to have a financial plan, but if you have no financial plan, you’ll never be wealthy. My hope on this holiday, whether you’re a military veteran or not, is that you’ll invest in your own financial plan. Or, if you’ve already mastered the basics of budgeting, perhaps you can find an opportunity to help someone else with their finances. In addition, if you are interested in learning more about creating a strong, individualized financial plan, please contact our advisors at Heritage.
Have a great Veteran’s Day.
Jim Breaux is a senior vice president and national sales director for the company’s funeral and cemetery trust services division at Argent Trust of Argent Financial Group, the parent company of Heritage. Jim is a former Marine and veteran of Operation Iraqi Freedom. He also holds a bachelor’s degree in Finance from the University of New Orleans and has been in the financial services industry for 22 years.