Financial Advisor for Military Members

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Financial Advisor for Military Members

I am a military brat.

My father served in the Air Force for 22 years. My brother served in the Navy, and I too served in the Navy for 4 years— separated in 2004. For 26 years, I lived a military lifestyle. So much so, that after I got out and saw a civilian doctor for the first time, I had to call my wife to figure out where to pick up my prescription. I personally didn’t understand why they didn’t point me down the hall (You would have to have been in the military or been associated with the military to get that one).

Being in the military is like being in an entirely different world. If you haven’t served, it is tough to understand what it’s like to be in the military. To give an example, the only person who truly understands what it is like to be raised by your parents would be your brother or sister. No one else will truly understand what it’s like to live through the saga that is your parents other than your sibling, and whether you like your sibling or not this commonality binds you forever.

Having a parent in the military is also a unique experience.

Although I love being missed when I leave for a week to attend a conference, my mom had to endure my dad being gone several times for six months to a year. So it’s hard for me to contain the eye roll when my family complains about me leaving for a week. I understand that my experience growing up as a military brat is not their reality.

If you are a financial advisor to a military member or if you are a military member seeking a financial advisor, understand that many don’t understand how military finances differ from civilian’s finances. Financial advisors, do your research. If you have never served or have never been the spouse or child of someone serving, do your best to understand the toll that the military takes on a family and their finances. Military members, communicate your unique situation.

After separating from the Navy, I continue to serve military members as a financial advisor. About 70% of my clients are either active duty or retired military.

So let’s talk about some nuances of managing military family finances:

1. Budgets change during deployment.
2. It’s OK to rent your home.
3. There is a good chance the military spouse is in charge.
4. Their benefits are like none other.

Budgets change during deployments.

You have to have a budgeting system that is clear and concise because budgets change when the service member is on deployment. These men or women are sometimes away from their families from 6 months to a year at a time. They are almost running 2 households at the same time. The service member is off serving his country, but they still need to buy things that will keep them sane.

I remember when I was in the Navy, the very first thing I wanted to do is get off the ship. Imagine being surrounded by your coworkers for months at a time. Imagine running into your boss in the shower and acting like you are happy to see him.

You:  Sir, so nice to see you this morning

Boss:  Good to see you too. Hey, I was wondering when you were going to get those reports to me.

You:  Yessir, that was the first thing I was going to do right after I wash myself.

Needless to say, it is a luxury to get off the ship and take a shower WITHOUT your boss. So, there may be some hotel costs involved with a port visit; these costs may be essential for morale. Not to mention a rental car and entertainment. True enough, service members may make a little more money when they are on deployment; however, they have this thing called a family back home helping to spend it.

Supporting Military families

After all, the spouse is now a “single parent.” What used to be a team effort, is still a team effort except for the person in the military is playing on the court with Kobe Bryant—yes, the spouse is Kobe Bryant. The spouse is making all the shots right now, and the military member just needs to get the rebounds. When the spouse has to step up and lead, he or she and the children may not feel like they have all the support they need.

Financial advisors must understand that with military families, the dynamics can change at the drop of a dime.

It is OK to rent your home.

I have never encouraged military members to purchase a home because they relocate so often. I do understand the desire to feel stable because of the frequent moving. Honestly, looking at it through a military lens, I view homeownership as an anchor—they want some kind of stability. However, when an active-duty person gets orders, they have to move. It doesn’t matter what is going on in their world or if their spouse has a great job, they have to quit. It doesn’t matter if their house is upside down on their equity, they have to try to sell it or rent it out. Often times, they are taking a loss on renting their homes out.

Plus, I see owning the home you live in as an unnecessary evil. There is more than one way to build wealth in this country, and it doesn’t have to be through residing in the home you own. You can purchase a home that will be a dedicated rental property. You can invest in a mutual fund of some sort. The best option is to consistently live below your means so that you can make adjustments to your budget whenever necessary.

So, I do not encourage military members to purchase a home, and I constantly remind them that it is OK to rent until they are ready to put down some roots.

There is a good chance the military spouse is in charge.

The military spouse is likely running the whole operation while the military member is out protecting the country.

When a service member deploys, communication can be hard. Communication is hard with my spouse, and I literally see her every night.

Imagine that you’re a military spouse, and your spouse leaves—again. He or she is not at home to help you with the children—you know, the precious children who don’t want to take a shower, eat or do homework. You have no other choice, but to create systems that work; you will have to make friends who support you or work with teachers and people in the community to get the support you need. When the car breaks down, you have to make decisions to the best of your ability. When Jenny needs a cheerleading dress, you have to make a decision. What used to be taken care of by the service member is left to you.

When I am working with military families.

The service member may be doing all the talking. They may even sound like they are in charge, but when the service member looks at me and says, “yes, we will do that.” I make sure I swing my chair and my eyes over to the spouse to get that affirmative head nod because, before long, I know that he or she is who I will be working with.

Advisors be warned, the spouse is the one that is going to get stuff done. He or she is the one that you need to support. Please understand that military families are busy. They usually don’t have their parents and extended family members to depend on; they have to do it all themselves—they may or may not have time for you. It is up to you to make time for them.

Their benefits are like none other.

Military members, by far, have the best benefits package I have ever seen. Hence, you have to be careful about what you recommend to a military member. There is a good chance that their benefits cover a lot of their needs. These benefits also give them an opportunity to cover other holes in their financial plans. I love the Dave Ramsey’s and Suze Orman’s of the world; however, they’re target market is not military members; they are giving advice to civilians. The F.I.R.E. movement is great and all; however, military members don’t really have to work that hard at achieving that goal because they have military pensions. Their pay is even taxed a bit differently than civilians. Their salary can fluctuate with duty stations or if they’re deployed. They have critical financial decisions to make, and without someone who truly understands their benefits, they can end up making bad decisions.

As a service member, you’ll need to be sure that your advisor understands your situation, your lifestyle, and your benefits. Your finances and your family dynamics are changing all the time. Everyone’s family changes, but military families are unique. Advisors have to understand this and be clear and concise with their advice.

I designed my budgeting system with the military in mind.  

Because in the military, spouses need to be able to communicate even when they don’t have direct access to the service member. My budgeting system really helps the spouse who might be across the world get a gauge on the financial health of their family.

To learn more about how to budget and be more efficient in your financial life, please subscribe to my blog. If you want to learn more about how budgeting will impact your life in a positive way, purchase the book, The Financial Effect.

*Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear the loss, including total loss of principal.

Photo by Jessica Radanavong on Unsplash