How to Improve the Financial Well-Being of Military Members and their Families: A Data-Driven Approach

Abstract: America's military strength is its all-volunteer force. This volunteer force guarantees the will and commitment of military members to defend the US Constitution. However, the stability and readiness of the US volunteer force are jeopardized by individual and familial financial stressors, such as mounting debt, high interest rates, fees, and penalties. These stressors can lead to divorce, alcohol abuse, and family maltreatment: factors which undermine force readiness and stability. Consequently, Congress should mandate, and the Department of Defense (DoD) must implement, a data-driven longitudinal study using new credit bureau and Thrift Savings Plan (TSP) data to measure and monitor the financial well-being of military members and their families. This study should also evaluate the effectiveness of the DoD Financial Readiness Program to identify improved strategies for enhancing the financial well-being of military personnel and their families, thereby increasing military readiness. A five-factor model, encompassing credit access, income, spending, debts, and assets, may be beneficial for measuring and monitoring financial wellness. Employer-sponsored financial wellness programs are commonplace today and offer employers a positive return on investment. In fact, if comparable financial wellness programs were adopted, the US Government could save over $52 billion annually while simultaneously increasing military readiness and personnel retention.