Navy to offer personal finance training
The U.S. Navy plans to offer a new personal financial management program to service members to help them protect themselves from predatory lenders, Comptroller of the Navy Charles Nemfakos said this week.
The program, which is still being designed, will incorporate education on personal financial management into the Navy's training sequence. The Navy has conducted a financial counseling and advice program for enlisted personnel and their families since 1990, but this is the first Navy financial skills program to operate with a formal curriculum.
Personal financial management has long been an issue for Navy personnel. A 1997 report by the Military Family Institute found that nearly half of enlisted personnel have difficulty managing their finances. The new program, however, is largely intended to conteract the efforts of predatory lenders that target enlisted personnel, according to Navy officials. Predatory lenders provide high-interest loans to people who believe they have little access to other lending sources. The recipients of these loans often can't make payments on the loans, creating a cycle of debt as they take out additional loans to cover payments on their initial loan.
"It is general knowledge that outside any Navy base, there are any number of lenders who are willing to take advantage of personnel," said Lt. Doug Spencer of the Navy Office of Information. "This program will help sailors make educated decisions about their finances."
Navy officials note that age is a major factor that makes Navy personnel vulnerable to disreputable lenders. "Many of our young sailors are 17 or 18 years old; they've never had a checking account," said Michelle Harrison of the Naval Education and Training Public Affairs office.
The program will provide two days of financial education for Navy personnel who have completed boot camp but not started further training. Cadets at the United States Naval Academy will also be educated in personal financial skills.
Classes will focus on the development of basic financial skills. Topics to be covered include how to read financial statements, basic investment strategies and a primer on ethical financial behavior. While the program will be targeted at personnel just beginning their naval training, officials emphasize that financial education will continue throughout a service person's career.
Recent pay raises for enlisted personnel have not diminished the need for personal financial management skills. "It doesn't matter how much you make; what matters is how you manage what you have," according to Spencer.
The Navy has allocated $6 million this fiscal year to cover start-up costs of the program. While details of the program are still being worked out, the Office of Naval Education and Training hopes to award a contract for the initiative in spring 2001 and possibly begin training by next August.