When you’re in debt, it can feel like you’re never going to climb your way out. Toss in the challenge of transitioning out of the military and into a new chapter of your life, and debt can seem even more insurmountable.
In a recent survey of military and veteran family members by the Military Family Advisory Network, more than 90 percent of respondents reported facing some form of debt. This included credit card, medical, and college loan debt, but the two most common forms were:
- Transportation debt: 44 percent of respondents reported owing money for a vehicle, vehicle insurance, or commuting costs.
- Home expenses debt: 42 percent of respondents’ debt stemmed from mortgages, rent, home repairs, or furniture purchases.
Getting out of debt can be a stressful, overwhelming experience, but keep in mind that many people have done it, and there are resources to help.
Here are a few tips for how service members and veterans can manage their debt and begin charting a course forward.
Get a handle on the issue.
First, to get a clear picture of what you’re dealing with, you’ll want to get a free credit report. You can access your credit report at no cost every year from annualcreditreport.com. NFCC offers free online calculators to assess whether you have too much debt and project how long it will take to pay off your credit card.
Consult a debt counselor.
You don’t have to tackle debt on your own. NFCC’s certified counselors can work with you to review your credit report, offer solutions for eliminating debt, and present tips for managing your finances. And, a confidential session with a debt counselor will not affect your credit rating.
Make a plan.
Here’s where you decide how you’ll wipe out your debt. We recommend addressing the one with the highest interest rate first — this debt’s costing you the most. Your counselor can provide a list of tactics to incorporate into your plan, such as negotiating with creditors or cutting yourself off from your credit card for a while.
Stick to a budget.
It’s hard to climb out of debt while you’re still digging the hole. Start by mapping out both your monthly earnings and your monthly expenses, and do your best to make sure you’re not spending more than you’re earning. If you can, include room to make minimum payments and to begin paying off that debt with the highest interest rate.
Lean on resources.
You’ve earned benefits by serving your country. Don’t hesitate to take advantage of them. The American Red Cross, for example, provides financial assistance to veterans for emergency expenses, including food, travel, and shelter. If you need immediate support, call the Red Cross at 877-272-7337. Individual branches of the U.S. military also have established emergency assistance programs, and the Military Family Advisory Network provides online financial education for military and veteran families through its MilCents program.
NFCC member agencies offer workshops and one-on-one financial counseling to help with all aspects of your finances, including credit and debt, homeownership, and student loans. We also partner with Wells Fargo to bring you Hands on Banking® for Military. Contact a member agency today to get your own personalized financial plan.