Financial Training Military Recruits

Papa John's Texting Lawsuit

Financial training is something members of our armed forces are not as equipped with or skilled at as they are on the battlefield, resulting in the risk for financial failure.

Indeed, service members often are found to have insufficient levels of financial education and are more likely than other adults to use payday loan services and other higher-cost alternatives to traditional banking, according to a February report from the nonprofit National Endowment for Financial Education.

Moreover, military spouses, also are frequent targets for unfair, abusive and deceptive financial practices, also known as financial training.

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Consider these examples documented in 2015 by the federal Consumer Financial Protection Bureau:

A California company lent a service member $2,600 for a payday loan with 219 percent interest.

A military spouse paid 300 percent annual interest on an auto loan from an Illinois company, essentially spending $5,720 to borrow $2,575.

Why are military members such inviting targets? Largely because of their guaranteed government paychecks, regulators said, and because they are often on the move and making hasty decisions without always thinking things through.

The U.S. Department of Defense, along with federal consumer watchdog agencies, is well aware of the need for more basic financial training on money matters for military personnel. In addition, legislation has beefed up protections for military members and their families from foreclosure actions, property repossessions and civil claims.

To boost the financial readiness of the armed forces, the various branches of the military are holding money management boot camps and other events in July in communities around the country as part of Military Consumer Protection Month.

While military life comes with extra challenges such as deployment and frequent moves that can have lasting financial repercussions, young service members are often the most vulnerable. Many new recruits join the military already armed with car loans, student loans and credit card debts, according to the federal Office of Servicemember Affairs, a division of the CFPB.

The consumer agency has fielded more than 74,000 complaints since 2011 from service members, veterans and their family members. More than 40 percent of the complaints dealt with debt collection practices. Other problems involved payday lenders, credit card companies, student loans, credit reporting agencies and mortgages.

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The armed services provide financial education classes during basic training. But as the Servicemember Affairs office noted, the information has not always been “well absorbed due to the rigorous demands” on a recruit’s time.

As a result, many young service members have left basic training not yet ready to make important financial choices, including choosing a financial institution for checking, savings and credit card products.

The Delayed Entry Program was created to fix these problems. It starts financial training when a prospective service member signs a military enlistment agreement and ends at departure for basic training. This program is tailored to provide “just-enough, just-in-time financial education to avoid the financial problems that routinely arise during initial months of active duty,” the Servicemember Affairs division said.

The division also has developed more online resources specifically for young people, including an interactive feature, “Misadventures in Money Management.” Earlier this year, a money course was launched to support ROTC members.

Check out additional financial resources at and USAA, which provides financial services for military families and veterans, also has extensive resources at

But all the resources in the world won’t help unless your young military member or recruit makes it a priority to learn basic money skills. That’s where parents can coach and motivate. After all, is any teenager fresh out of high school well-prepared to deal with banking options and loan agreements with triple-digit interest rates?

Financial regulators urge young military members to be wary of payday lenders and other businesses clustered around military bases that promote special rates and discounts for military members. Make sure lenders explain terms and disclose all costs.

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