Reconciling military service and personal financial considerations can be difficult. While meeting a felt obligation to their country, personnel can find the fiscal realities of service to be difficult. According to the best estimates, thousands of active-duty military may turn to food stamps, and about seven percent of all veterans may be dependent on Supplemental Nutrition Assistance Program, or SNAP.
So, it’s understandable that when Congress agreed on a 1.3 percent military pay raise for 2016, few enlisted personnel or officers were likely all that relieved. This makes the third year that the raise has fallen below civilian wage growth.
Pay raise caps are a tool that help the government keep personnel costs in check. But it is military personnel and their families that ultimately foot the bill. The First Command Financial Services Financial Behaviors Index recently found that military families are concerned over shrinking pay raises.
Seven out of ten middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) expect to be financially affected by anticipated cuts to defense spending.
Military families are dealing with these concerns through financial preparedness, with 87 percent of survey respondents taking some type of action. In the latest monthly survey, the top methods for dealing with defense cuts were increasing savings (48 percent) and cutting back on everyday spending (40 percent).
While the low raises are an immediate issue, they also create long-term problems. Wealth is built over time. Shortcomings early on compound because there are fewer assets that can build, meaning military families have to play catch-up.
If you plan to leave the military at some point, one way to address the issue is advancing your education. According to federal government research, there is a strong correlation between education and wealth as well as an inverse correlation with unemployment.
In 2014, the median weekly earnings for someone with a high school diploma were $668. For someone with a bachelor’s degree, the number jumped to $1,101. With a master’s degree, it hit $1,326.
Similarly, those with more education were more likely to hold a job. The unemployment rate for someone with a high school diploma only was six percent at the time. If a person had a bachelor’s degree, the unemployment rate was 3.5 percent. With a master’s, it was 2.8 percent.
The more education you have, the more money you make, the faster you can build wealth, and the more removed from unemployment you are. If you want to take control of your financial future, you need to take control of your education.
American Sentinel University is proud to have been named as a “Military Friendly School” for the ninth consecutive year. This distinction puts American Sentinel in the top 20 percent of colleges, universities and trade schools nationwide that do the most to embrace America’s military service members and veterans as students, and to dedicate resources to ensure their success both in the classroom and after graduation. Learn more about our military friendly education programs and distance learning courses.