Dangers of Debt in the Military
Unmanaged debt can mean trouble for anyone – especially for members of the military. The mental strain of excessive debt can affect your job performance and impact mission readiness.
Military Life Can Lead to More Debt
Some of the characteristics of military life can, unfortunately, make Service members more likely to accumulate debt. For example, members of the military:
- Tend to leave their homes and support systems at an earlier age
- Have less of a financial safety net early on
- Have more financial obligations than their civilian counterparts
- Experience frequent moves and deployments which can negatively impact spouse employment opportunities and earnings
- May be stationed in an area with a high cost of living
Unless carefully managed, many of these military life stressors can contribute to financial instability.
Potential Consequences of Debt in the Military
Poor financial management can hurt your military career. Consequences could include:
- Loss of certain duty assignments overseas
- Loss of your security clearance
- Poor performance evaluations
- Loss of promotion
The severity of the issue may result in disciplinary action.
Whether you’re civilian or military, poor debt management can result in negative information on your credit report or a low credit score. This can then lead to higher borrowing costs or the denial of credit altogether. Unpaid debts can also lead to additional financial consequences like overdraft fees, repossession of purchased items, foreclosure, and bankruptcy.