3 Families, 4 Months, $26,000 Paid
Like the service men and women they are, the participants in my yearlong money-management challenge have hunkered down and are attacking their debts with mighty force.
In less than four months, Kim and George Colón have drastically cut their household expenses and have managed to pay off more than $8,800 in consumer and tax debt. Kim, 43, is a senior master sergeant in the Air Force. She's been in the military for almost 20 years. George is 52 and retired from the Army after serving 22 years.
Tarek and Evibeth Bathiche, both 24-year-old Army personnel stationed at Fort Meade, have paid off more than $16,000 in consumer debt since being put on my debt diet by cutting expenses and using Tarek's re-enlistment bonus. Evibeth is a sergeant, and Tarek was just promoted to staff sergeant.
Amber and Trenton Holmes have paid off more than $1,200 owed in credit card and retail debt. Trenton is an aircraft mechanic and tech sergeant with the Air Force. Amber is a paralegal specialist with the federal government.
In this year's challenge, I wanted to work with military personnel. Throughout the year, these three families in the Color of Money Military Challenge will open up their financial lives and follow debt-reduction plans I've laid out for them.
So why focus on military families?
Several reports by the Defense Department and the Government Accountability Office have found that many military personnel are in financial trouble, and that in turn may be affecting our country's military readiness. Given the current deployment of our troops in the Middle East, it's key to have soldiers who are focused on their duties and not their debts.
Family separations resulting from duty-station changes and deployments often put additional financial stress on military personnel, said Janet Pearson, publisher of Military-Money-Matters.com.
"I think the other part of the problem is a lack of financial education," said Pearson, who spent five years as an attorney in the Navy's Judge Advocate General's Corps. As a Navy attorney, she frequently provided advice to service members and their families on financial issues.
Serious financial problems can have a negative impact on service members' careers. They could lead to loss of security clearance and other adverse personnel actions, including discharge.
Concerned about military personnel in financial trouble, the Financial Industry Regulatory Authority's Investor Education Foundation created SaveAndInvest.org, an excellent online program initially funded by $6 million in fines collected from a financial services company that used misleading practices to sell investment plans to military personnel.
Last fall, the securities regulator teamed with InCharge Institute of America to launch BrightScore, an online credit-management tool. The resource is free to active-duty personnel and their spouses to help them manage their credit wisely. Service members can obtain access by visiting the personal financial manager (PFM) assigned to their installation.