Veterans at Risk Due to Lack of Financial Literacy

Lack of financial literacy is causing homelessness among vets, a new study finds

Two hundred thousand of our veterans are homeless. And, a new study conducted by the American Journal of Public Health found that a lack of financial literacy and money mismanagement coupled with military stressors caused their homelessness.

The University of North Carolina and Duke surveyed 1,000 vets who served in Iraq and Afghanistan and found that “nearly one-third had gone over their credit limit, written a bad check or been contacted by a collection agency.” And, at least 5 percent of them have been homeless at one point or another.

“Money mismanagement was reported by a substantial number of veterans and urgently needs to be addressed,” the report said. “Financial education even on simple issues could readily and inexpensively be added into pre- and post-separation work with veterans.”

In an effort to end veteran homelessness in the next two years, VA leaders have expanded their housing assistance and job training programs. According to VA.gov, “No one who has served our country should ever go without a safe, stable place to call home.” Consolidated Credit says veterans should be taught how to not only put a roof over their heads but how to also keep a roof over their heads. Veterans should therefore learn how to:

  1. Budget: The road to financial stability often starts with a budget. When you try to keep up with a house loan, a couple of car loans, six credit cards, and a few floating medical bills it gets tough if you don’t have an actual plan in place. That is one of the main reasons why so many people fall into financial turmoil. Once you start spending more than you are making, it’s only a matter of time before your finances capsize. But with the right tools budgeting can be as easy as 123.
  2. Avoid falling victim to financial scams. A study released by the American Journal of Public Health found that military members are more likely to be targets for predatory lenders. Veterans should therefore use Housing and Urban Development (HUD) certified housing counselors when having problems with mortgages or lending for making a purchase. Consolidated Credit offers ways to help protect you against mortgage fraud.
  3. Find ways to lower mortgage payments. If you sense that financial distress is imminent and meeting your mortgage is a struggle, refinancing when rates are low is a viable option. That way your old higher mortgage payments will be replaced by the newer more affordable one. You may also visit VA.gov to find out the help available to servicemen who are having difficulty meeting their mortgage payments.

Financial education is key to obtaining financial success. And sometimes financial distress has no bounds. If you are going through financial hardship and perhaps are a few mortgages or rent payments away from losing your home or becoming homeless, call Consolidated Credit to speak with a HUD certified housing counselor.