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Tuesday, July 23, 2024

Survey: Unique Challenges of Military Life Call for Tailored Family Financial Readiness Solutions

Survey Calls For Military Family Financial Readiness Solutions
Mike Senecal

Written by: Mike Senecal

Mike Senecal
Mike Senecal

Mike Senecal draws on more than 20 years of editorial experience to update CardRates.com readers on industry trends, business news, and best practices in budgeting and credit use. Mike has worked for decades in academic and trade publishing, including roles as managing editor and technical editor at the University of Florida and as contributor to finance industry publications, including Surety Bond Quarterly and Independent Agent, among others. Mike holds bachelor’s and master’s degrees from the University of South Carolina, and he enjoys bringing his years of academic and industry expertise online to help consumers of diverse financial backgrounds.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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In a Nutshell: Perhaps more than most families, military households value having a place they can call home. But, unlike civilians, they must grapple with frequent relocations and other challenges that can profoundly affect their finances. A May 2024 survey from Armed Forces Bank examines military family financial readiness as a component of military readiness. Financial solutions that consider the unique challenges of military life must address the importance of homeownership and the impact military experience has on financial habits. This new research from Armed Forces Bank highlights how financial products with a military focus help keep the nation strong.

Three-quarters of Armed Forces Bank‘s retail employees have a connection to the military. That tells you something about the bank’s commitment to serving active-duty and veteran military members.

The Armed Forces Bank website states, “We express through our own service our appreciation for the uniqueness that comes with the military way of life.”

Armed Forces Bank welcomes service people, veterans, U.S. defense personnel, families, dependents, and all who wish to further the bank’s mission regardless of military connection.

Founded in 1907 as Army National Bank and headquartered in Fort Leavenworth, Kansas, today’s Armed Forces Bank promotes strength through unity by reaching out to financial consumers with products and services designed to help them succeed.

Armed Forces Bank logo

Part of doing that involves knowing more about the concerns of its constituency. Armed Forces Bank recently commissioned a survey to understand the challenges military families face in keeping households stable and financially strong.

Released in May 2024, the “Military Family Financial Readiness Report” examines financial product usage, the importance of homeownership, challenges faced, provider satisfaction, and preferred resources to assess how military service impacts financial habits.

Tom McLean, SVP and Regional Military Executive, and Jodi Vickery, EVP and Director of Military Consumer Banking, host the bank’s “Militarily Speaking” podcast, which highlights nonprofits serving the military community and the profound social challenges some current and former members face.

McLean and Vickery applauded the new survey as expressing the bank’s continuing commitment to service people.

“There’s a connection between financial readiness and the challenges of frequent relocations during a military career,” McLean said. “This survey ensures we’re hitting the mark and addressing what’s important.”

“It reveals the story of a military life in charts and graphs,” Vickery said. “It formalizes things we have believed and have been acting on. You see that in the evolution of our products.”

Products to Handle Sudden Financial Challenges

The survey’s product usage data suggests that military families can improve their financial planning and wealth-building strategies. Respondents’ intense desire for homeownership points to its status as a crucial aspect of the American Dream.

With an economy buffeted by inflation, consumer uncertainty, and high interest rates, many bank customers grapple with low income, debt, lack of knowledge, and unexpected expenses.

Respondents also highlighted low fees as the most essential aspect of a bank’s services, even ahead of customer service, online banking features, interest rates, and branch accessibility.

USO Northwest's Operation Popsicle
For the third year in a row, the Armed Forces Bank team at Fort Lewis, near Tacoma, Washington, sponsored USO Northwest’s Operation Popsicle at Joint Base Lewis-McChord’s Rainier Elementary School, distributing 648 popsicles to delighted students.

Armed Forces Bank’s Access Freedom Checking Account fits the bill with no monthly fee or minimum balance required. The account includes an early paycheck deposit service, free overdraft protection when linked to a savings account, and no-fee access to 38,000 ATMs.

“Consumers without a lot of discretionary income don’t want that chipped away through bank fees,” Vickery said.

Credit access is a key to financial flexibility. Armed Forces Bank’s Credit Builder Secured Visa Credit Card gives customers an inside track to the wealth-building potential of greater liquidity.

With a credit limit between $300 and $3,000, no application fee, and no over-limit fee, the card automatically reports activity to three main credit bureaus.

“When users charge recurring expenses and pay them off monthly, they start to build some good history on that credit report right out of the gate,” Vickery said. “They’re setting themselves up for success as other financial or borrowing needs arise.”

The bank’s Access Loan provides a source of longer-term credit for families looking to make a big purchase, pay off debt, fund home improvements, or cover unplanned expenses.

The Access Loan looks beyond credit scores to find other reasons to connect families with needed resources.

“We look broadly at financial behavior to get a full picture of a person’s credit risk,” Vickery said. “That allows us to extend credit to more people than a traditional bank or a credit union might.”

Encouraging the American Dream of Homeownership

The Access Loan is more needed than ever, given reports online of the millions of American families living paycheck to paycheck without funds to tide them over in an emergency.

Survey respondents prioritized low income, lack of stability, inflation, and the cost of living as chief challenges.

“If the fridge goes out or you need tires for the car — I mean, life happens,” Vickery said. “We give you a way to get from point a to point b and pay that back over a term that fits your needs.”

Members of the Armed Forces Bank team at U.S. Army Fort Huachuca
Memorial Day 2024: Members of the Armed Forces Bank team at U.S. Army Fort Huachuca, Arizona, provided clients with sweet treats and water.

The survey cited homeownership as being particularly important for military families. More than 51% of respondents classified owning a home as very important, with another 26% classifying homeownership as somewhat important.

Digital channels help Armed Forces Bank reach a nationwide customer base even as customers mesh the challenges of homeownership with the imperative of relocation.

“To help families cope with frequent relocations, we focus on making opening a checking account and applying for credit, a secured card, or a mortgage seamless. This is who we are,” McLean said. “We want our customers to feel good about choosing us among the many great competitors out there.”

It’s difficult not only because families put down new roots often. Some military families — including Vickery’s — have managed dual home locations to help maintain continuity for children.

“You scrape, and you scrap, and you make ends meet because you need to keep the kids in a safe place with extended family around to help support,” Vickery said.

Maintaining job continuity is also challenging for military spouses and partners due to frequent relocations. Armed Forces Bank offers VA and other advantageous mortgage products to help military members and veterans get into housing that furthers family goals.

“You can come to the table with less money,” Vickery said. “If you’re on a fixed income and haven’t had extra cash to put away for a down payment, we’re a great option to get you into a home, building equity, instead of being in this constant renters cycle.”

Meeting the Distinct Needs of Service Members and Families

McLean and Vickery agree that the 2024 Military Family Financial Readiness Report signals Armed Forces Bank’s readiness to help military families tackle financial challenges.

“It just drives home a lot of the reasons we do what we do as an organization,” Vickery said.

McLean cited his podcast work with Vickery as crucial to understanding the breadth of the problem.

Members of the Armed Forces Bank team at Fort Riley, Kansas
Memorial Day 2024: Members of the Armed Forces Bank team at Fort Riley, Kansas, placed flags on graves at a nearby military cemetery to pay tribute to America’s fallen heroes.

“We deal with the everyday issues many face during their service or as they transition to civilian life,” McLean said. “We know some of our vets struggle with PTSD, mental health issues, food insecurity, and even homelessness.”

The bank officially incorporates those realities into its community outreach strategy. Community involvement at Armed Forces Bank includes financial education programs and services for all age cohorts.

The bank also promotes economic self-sufficiency for at-risk groups and provides housing, education, sports, counseling, and nutrition programs for children from low- to moderate-income households.

Career development and transition assistance helps military families transfer specialized military education, experience, and skills to a civilian environment. Programs and services support low- and moderate-income neighborhoods.

A robust social media presence typifies the bank’s community approach to communicating with customers. With most of the bank’s employees facing the same financial challenges as those of their customers, team members are frequently on the same page with customers.

“Having people on our staff who appreciate the challenges of military life is a huge customer benefit,” Vickery said. “Our number one VA mortgage lender is an active-duty spouse who has moved many times and knows exactly what it means to buy and sell a house every couple of years on rotation.”

McLean agreed.

“We’ve got a great mortgage team that has an affinity with the military side, and they’re leaning in to ensure the programs we offer fit our customers’ needs,” McLean said. “We want to find a way to say yes.”