No one wants to be in debt, but financial hardship can have even more far-reaching consequences for veterans. Many have been granted security clearance, a designation that allows them access to classified information and eligibility for certain high-level jobs. However, financial problems can cause your security clearance to be denied or revoked.
“Over half of the security clearances that are lost in the military are due to financial issues,â€ says John E. Pickens III, executive director of VeteransPlus and Yellow Ribbon Registry Network.
Complicating the problem is the nature of military service itself. If you’re on a military base or you’ve been deployed overseas, many of your financial needs are taken care of, such as food, housing, and even physical security, says Mechel Glass, vice president of community outreach for CredAbility, a credit counseling organization that offers a financial literacy program for veterans. Since the basics are covered, the money you spend tends to be on those things that you want rather than those things that you need. But when you leave the military, you’ve got to find a place to live and a job. Even small things like a gym membership to stay in shape or a security alarm for your home can be a new expense. “Veterans have to figure out that they can’t spend like they used to,â€ says Glass, a veteran who developed a financial literacy curriculum for other veterans.
During the six to 12 months it can take to find employment, veterans who don’t have much in savings can easily find themselves in financial straits. “Those that we see that are at the highest risk for homelessness are 12 months away from discharge,â€ says Pickens.
Get help early and often
While financial literacy programs can help you get through a financial jam, it’s better to avoid a financial crisis. If you’re planning to leave the military, start creating a financial plan as far out as two years in advance, says Glass. Ask yourself such questions as ‘What do I want to do?Â Will I need more education? Am I going to use the GI Bill? Will it be enough to pay for the degree that I want?’ Even if you qualify for certain benefits such as disability, it can take six to eight months for the benefits to be set up, Glass says, “so what are you going to do during that transition period?â€
Despite the challenges veterans face, studies show that once they get on their feet, veterans may have a leg up on their civilian counterparts. According to the FINRA study, members of the military are more likely than civilians to keep up with their monthly expenses, and they’re more likely to have engaged in retirement planning. “Military folks are trained to be self-sufficient,â€ says Pickens. “They’re trained to be problem solvers and once they have the financial literacy, we find that they can formulate a plan and meet an objective.â€