Serve Your Country Not Debt

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Serve Your Country Not Debt
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United States military families face unique challenges as it relates to pursuing debt freedom and a firm financial future. I’m a former military brat (my dad served in the Air Force), but have no experience raising a family, fixing finances, or trying to build wealth while serving my country.

For that, we turn to Nichole of the Budget Loving Military Wife. She offers a look at life in the military for this New Year New You 2015 debt dumping profile.

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Nichole and her husband are stationed in the United Kingdom. He’s pursuing a long-term military career. They are also working diligently to dump debt.

As Nichole shared, military personnel face unique financial challenges with seeking a 20 year career in the service. Many positions don’t translate directly to civilian careers and those who haven’t prepared educationally or financially can find themselves in a bind after retirement.

She also noted that a 20 year career is not guaranteed (sounds like civilian jobs these days) and encourages service men and women to:

  • Pay off debt now.
  • Establish an emergency fund.
  • Start saving in retirement accounts.
  • Take advantage of education resources (G.I. Bill) to secure a degree or certification

I loved reading Nichole’s interview because it shines a light on a segment of our population that is working hard, but subject to their own set of obstacles when trying to pay off debt. Plus, she shared awesome photos of her travels – one perk of being stationed overseas.


1. How much debt are you working to dump and when do you expect to reach debt freedom?

We began taking our finances seriously and focusing on paying down our debt four months into our marriage, in December of 2011. We received Dave Ramsey’s book, “The Total Money Makeover,” as a wedding gift and we ended up enrolling in his course, Financial Peace University, in January of 2012.

When we began our journey we had a total debt of $171,500!!! This debt consisted of my husband’s car loan ($4000), my car loan ($6000), my student loans ($38,000), and a mortgage ($123,500). We have been working hard, staying focused, and living as frugally as possible for three years. In that time we have paid off $114,200!!! We have $57,300 left on our mortgage and we should be 100% debt free by December 2016.

2. Are there scenarios that make military families more susceptible to going in debt?

This was not our case. Most of our debt was “normal” American debt. However, there are some special circumstances or challenges military families face that could lead to debt accumulation. Many military spouses have a difficult time building a career or finishing a degree to earn a higher income, because many of us are constantly on the move. Resulting in many military families being single-income families, which could cause finances to be tight and may lead to debt accumulation. Also, anyone who has ever moved can attest to the fact that moving takes a hit to your wallet. The Department of Defense does reimburse for some expenses, but each move costs families $100’s if not $1000’s out of pocket. When a family is not financially prepared (doesn’t have savings) for a PCS (Permanent Change of Station), a military family could potentially accumulate debt.

Military families are also hit hard when the housing market is poor. There are some families who choose to purchase a house with a very low down payment (VA loan has a 0% down payment option) and when they get orders to move to another location in two years, they are very likely to owe more than what the house is worth. So then they are left with undesirable options, renting out the home and stretching their monthly budgets and emergency funds even thinner. If they have the extra funds they could cover the difference, otherwise they incur debt through a personnel loan or short sale with the mortgage company.

Just about any financial expert would tell any family NOT to buy a home if you are going to live there less than 5 years. As a military family, who are “landlords” who live on the other side of the world as our mortgaged rental home, I could not agree more!

3. Debt for military serviceman can impact their career options, right? If so, how?

Yes, you are correct Toni. Poor finances, having excessive debt, not paying your bills, etc. leads to a service member losing his or her security clearance. I have read that poor finances is the leading cause for loss of security clearance. Losing security clearance can ultimately lead to a discharge from service. However, service members who have poor finances, but are doing something about it: sought out help, have a plan, and is doing things to fix the finance problems are a lot less likely to lose security clearance.

4. In addition to finding Dave Ramsey, what resources have you found helpful through the military to learn better money management techniques? Do you find many families take advantage of these resources?

Majority of military installations have a Family Readiness Center (every branch has a slightly different name), which provides free financial counseling and personal finance classes. I have attended a couple of these finance classes in the past year. Although, I haven’t learned anything huge at these classes because I already have the basics down and have done quite a bit of my own research. However, I did learn about a couple of programs and benefits that are offered for service members that I was unaware of before. For the most part, these classes cover the basics with budgeting, savings, and retirement. Participation varies at each location. However, with most things I am sure we could all do a little better about taking advantage of these resources. After all they are FREE!

5. Are there any challenges to managing your finances while living overseas that you might not experience state-side?

There are definitely challenges to our finances while living overseas. The biggest challenge is that we went from a two-income household, down to one-income. So we moved to a higher cost of living in addition to a lower income. Fortunately we had over a year of practice living frugally and had our finances in order before this move. Otherwise it would have been a strain financially and we definitely would not be traveling as much as we do now. The other challenge we have is budgeting. My husband’s income is in the U.S. Dollars however we live in a British home and most of our expenses are in British Pounds. With the ever changing exchange rate, it is difficult to budget and account for every dollar. We also struggle with balancing taking the once in a life-time opportunity to experience and travel Europe with paying off debt. It is a delicate balancing act that we often question. Last year, we paid off over $30,000 in debt and visited 7 countries outside of the U.K. so I think we did well last year. Hoping for the same in 2015! 🙂

6. If you have many friends/colleagues native to the local community, how does the attitude toward personal finances, spending, or debt differ from the typical American in your circle of friends (or those of us in general)?

I don’t have British friends who are close enough to know about their finances. In general, the British are a lot more reserved and courteous so I’m not sure if they even talk finances with their closest friends. LOL. In my general observations, British families are not the big consumers that Americans are known to be. For example, we currently drive a 12 year old Honda Accord and we live in a mid/high income neighborhood for the area and our car doesn’t stick out. Yes, some of our neighbors have much newer cars, but they are not extravagant. Oh, and the embarrassing occasion when the movers oohed and awed over our 50-inch television (quite normal in the U.S.) but apparently not here. LOL. Families seem to live a much more minimalist lifestyle here. I have enjoyed it, because I’m not the crazy frugal lady, like I was in my U.S. neighborhood. LOL.

7. What are some financial obstacles that newly enlisted serviceman & women have to deal with that civilians would be surprised to know?

I think most civilians would be surprised by new service member’s income. If a service member is single, he or she lives in the dorms and gets a basic pay of $1400/month (2015 rates before taxes). Could you imagine trying to buy a car, fueling that car, paying for phone service and whatever other bills, and funding entertainment costs (like any other teenager/young 20-something) with $1100/month? A new military member with a family… probably has a take home pay of around $2000/month to pay for all expenses. I did not know my husband when he was knew to the military, but he saved for over a year just to buy a cheap car to get him to and from work.

Here are the links to Housing and Basic Pay income chart/calculator for military personnel.

8. If you had to do one thing over again regarding managing money as a military family, what would that be.

The one things I would do differently is NOT buy a house! We love our state-side house and would love to go back to it. But those chances are slim and by the time my husband retires from the military (~10 years) there is a good chance that we would have out-grown it. It sucks up a lot of our income and is just an added stress in trying to manage it from thousands of miles away.

9. Here’s a fun question. What countries do you plan to visit this year and how close are you to those destinations!  Of the places you’ve lived in (or visited), which would be the best place for someone to visit?

I LOVE this question! 🙂 Our first vacation of the year, will be in April to Holland (the Netherlands) to experience all the spring bulb fields (I am a flower garden fanatic so I’m excited), visit Amsterdam, and anything else we find interesting in the area. Finance wise, we haven’t booked anything quite yet, but we have the funds in place to cover our first trip. Then in May/June time frame we hope to go on a Mediterranean cruise. We don’t have it booked, but are leaning towards Greece, Croatia, and Turkey for country destinations. We don’t have the last half of 2015 travels thought out yet. But we would love try to make it to Iceland and/or Spain/Portugal this year.

Nichole at Stonehenge

As far as where I would recommend others to go visit… My top two places so far that I would recommend that should be on everybody’s travel bucket list is St. Peter’s Basilica in Vatican City and The Swiss Alps. Neither were even on my radar for must go to places for me. Both are absolutely breath taking and unbelievably amazing.

Switzerland part of the Swiss Alps

I also loved France! We visited the Normandy region and then trekked across country to Germany. The country side is beautiful and out of all our travels we encountered the most welcoming locals in France.

Serve Country Not Debt

My other favorite travels: Scotland, Southern Wales, Cornwall (SW England), Dover’s White Cliffs (England), Dingle Peninsula/Killarney region of Ireland, and of course Hawaii (Maui or Kauai). I could talk about travel forever! 🙂 LOL

Loch Lomond, Scotland
Dover White Cliffs – Dover, England


Find additional New Year New You 2015 for more debt dumping inspiration.

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