Comments on: Debt in the Military a Security Concern! http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: Fedup http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-58340 Fedup Thu, 28 Dec 2006 18:19:12 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-58340 The problem goes deeper than much of the speculation here. As I see it, given the military's defined benefit pension, military personnel now receive salaries equal or above the private sector. They also receive a 100% accurate allowance for local housing. So military debtors should not be more prevalent than irresponsible civilians. If they are - other questions need to be asked. All of this is not coming from a vacuum. This week a military family member will commit to a house which is 7.8 times his annual income. Despite the warnings, despite free legal aid, despite free financial training. It is a great bafflement, and it makes me understand some of those ancient muslim prohibitions against interest. They may have been more savy than we give them credit...understanding that if you allow lenders to enslave - they will. And the people will line up to become their slaves. The problem goes deeper than much of the speculation here.

As I see it, given the military’s defined benefit pension, military personnel now receive salaries equal or above the private sector. They also receive a 100% accurate allowance for local housing.

So military debtors should not be more prevalent than irresponsible civilians. If they are – other questions need to be asked.

All of this is not coming from a vacuum. This week a military family member will commit to a house which is 7.8 times his annual income. Despite the warnings, despite free legal aid, despite free financial training.

It is a great bafflement, and it makes me understand some of those ancient muslim prohibitions against interest. They may have been more savy than we give them credit…understanding that if you allow lenders to enslave – they will. And the people will line up to become their slaves.

]]> By: AllFinancialMatters » Blog Archive » Blog of the Week - No. 63 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-54940 AllFinancialMatters » Blog Archive » Blog of the Week - No. 63 Sun, 17 Dec 2006 20:38:03 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-54940 [...] This week’s Blog of the Week honors go to Dimes to Dollars, a blog written by a twenty-something Navy wife stationed somewhere in the U. S. This is the first blog I have run across that specifically deals with finances for those in the military so her blog definitely has a nice niche to fill. She wrote an interesting post on how deployments affect the finances of those in the military, that I found enlightening. She also has a two-part series on predatory lending and the military (Part 1 and Part 2) something I blogged about a month or so ago. [...] [...] This week’s Blog of the Week honors go to Dimes to Dollars, a blog written by a twenty-something Navy wife stationed somewhere in the U. S. This is the first blog I have run across that specifically deals with finances for those in the military so her blog definitely has a nice niche to fill. She wrote an interesting post on how deployments affect the finances of those in the military, that I found enlightening. She also has a two-part series on predatory lending and the military (Part 1 and Part 2) something I blogged about a month or so ago. [...]

]]> By: Lazy Man and Money http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50557 Lazy Man and Money Sat, 02 Dec 2006 00:43:09 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50557 I think Rob's point with McDonalds is that it might not be harmful to you financially, but many of the items that it serves are harmful to your health. Why not make all businesses that can be harmful to consumers illegal? I think the thing with McDonalds is that it does provide many healthy foods, which makes it not a preditory business (for lack of a better phrase). There are enough positive aspects of the company to the public. I don't think the Payday loan companies offer enough positive aspects for me to say that about them. However, by this logic cigarettes manufactures should be banned. They probably would be too if they didn't bring in a lot of tax dollars and have people addicted to the product. I don't know what to say, there are a lot of inconsistancies here. I think Rob’s point with McDonalds is that it might not be harmful to you financially, but many of the items that it serves are harmful to your health. Why not make all businesses that can be harmful to consumers illegal?

I think the thing with McDonalds is that it does provide many healthy foods, which makes it not a preditory business (for lack of a better phrase). There are enough positive aspects of the company to the public. I don’t think the Payday loan companies offer enough positive aspects for me to say that about them.

However, by this logic cigarettes manufactures should be banned. They probably would be too if they didn’t bring in a lot of tax dollars and have people addicted to the product. I don’t know what to say, there are a lot of inconsistancies here.

]]> By: Generation X Finance » December 1st Friday Five http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50542 Generation X Finance » December 1st Friday Five Fri, 01 Dec 2006 23:21:08 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50542 [...] Five by Jeremy @ 5:29 pm | del.icio.us | Digg it | Furl | Netscape | reddit | StumbleUpon | Yahoo MyWeb| [...] [...] Five by Jeremy @ 5:29 pm | del.icio.us | Digg it | Furl | Netscape | reddit | StumbleUpon | Yahoo MyWeb| [...]

]]> By: dimes http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50541 dimes Fri, 01 Dec 2006 23:10:14 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50541 Golly gee, don't make me pry the lid off this can of worms. I spend one day per week dealing with folks who get themselves in these sorts of situations. Honestly, there is no magic bullet. Apparently there is a personal finance brief during basic training, and recently most (maybe all) of the commands in Hampton Roads had payday lending awareness briefs, but the trap is so easy to fall into. Military pay fluctuates greatly from month to month (for example, since my husband left on deployment, his base pay has increased almost $1000 per month) which can make it hard for people to budget, and a lot of military personnel can experience life changed which affect their finances. There's also a lot of pressure to keep up with the Joneses (ESPECIALLY among junior enlisted wives, who can usually ill-afford not to work), and that can submarine the finances, especially if the wives aren't mindful of their husband's fluctuations. Another problem is that the military encourages you to use debit cards instead of credit cards, which is TOTALLY moronic in my opinion, so kids never bother to keep a register. My own husband, who had to pass rigorous background checks because he works with his ship's finances, never has much of an idea what's in our bank account at any given time, to the point that I could probably slowly fund a secret account with him never noticing. He sent his sister a check that she didn't cash for four months and he never noticed it was still outstanding. As for payday lenders, they're cracking down on them in this area, but other types of lenders exist that are just as bad. I've heard that a few of the local payday schemes are actually funded by former admirals. What do you think of that? Golly gee, don’t make me pry the lid off this can of worms. I spend one day per week dealing with folks who get themselves in these sorts of situations. Honestly, there is no magic bullet. Apparently there is a personal finance brief during basic training, and recently most (maybe all) of the commands in Hampton Roads had payday lending awareness briefs, but the trap is so easy to fall into. Military pay fluctuates greatly from month to month (for example, since my husband left on deployment, his base pay has increased almost $1000 per month) which can make it hard for people to budget, and a lot of military personnel can experience life changed which affect their finances. There’s also a lot of pressure to keep up with the Joneses (ESPECIALLY among junior enlisted wives, who can usually ill-afford not to work), and that can submarine the finances, especially if the wives aren’t mindful of their husband’s fluctuations.
Another problem is that the military encourages you to use debit cards instead of credit cards, which is TOTALLY moronic in my opinion, so kids never bother to keep a register. My own husband, who had to pass rigorous background checks because he works with his ship’s finances, never has much of an idea what’s in our bank account at any given time, to the point that I could probably slowly fund a secret account with him never noticing. He sent his sister a check that she didn’t cash for four months and he never noticed it was still outstanding.
As for payday lenders, they’re cracking down on them in this area, but other types of lenders exist that are just as bad. I’ve heard that a few of the local payday schemes are actually funded by former admirals. What do you think of that?

]]> By: JLP http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50535 JLP Fri, 01 Dec 2006 22:04:21 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50535 Lazy Man makes a good point: Where do we draw the line? Rob, I don't think we can compare McDonalds with loan sharks. You go to McDonalds to eat. You don't have to come back later to pay for your meal and if you don't have the money they'll charge you interest. People keep wondering why the rich get richer and the poor get poorer. This kind of stuff is why. It has very little to do with our tax structure and EVERYTHING to do with poor decision-making. Lazy Man makes a good point:

Where do we draw the line?

Rob,

I don’t think we can compare McDonalds with loan sharks. You go to McDonalds to eat. You don’t have to come back later to pay for your meal and if you don’t have the money they’ll charge you interest.

People keep wondering why the rich get richer and the poor get poorer. This kind of stuff is why. It has very little to do with our tax structure and EVERYTHING to do with poor decision-making.

]]> By: Rob http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50534 Rob Fri, 01 Dec 2006 21:59:16 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50534 "I really don’t know where they draw the line, but how different is it than being a drug dealer? Is it the drug dealer’s fault that people buy drugs? One could say that should be legal and people should have the skills to take care of their health and decide what good for them. What if I replace it with cigarette dealer or prosititute?" Admittedly, I think all these things should be legal, too. “I really don’t know where they draw the line, but how different is it than being a drug dealer? Is it the drug dealer’s fault that people buy drugs? One could say that should be legal and people should have the skills to take care of their health and decide what good for them. What if I replace it with cigarette dealer or prosititute?”

Admittedly, I think all these things should be legal, too.

]]> By: Rob http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50533 Rob Fri, 01 Dec 2006 21:57:57 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50533 I was really responding to ciwood, sorry that wasn't clear. I disagree with you, though, about the payday loan business. Sure, it's a product people should probably avoid, but people should avoid McDonald's and cigarettes, too. It's their choice. And there are plenty of businesses that take advantage of the financially unsophisticated. The ones I personally hate the most are car dealers who charge rediculous lease rates because people don't understand how leasing works. But just becaue you think they charge too much doesn't make them illegitimate. If they are charging more than a market rate then anybody is free to open a competing store right next to them that charges less. And since it is a multi-billion dollar, established business model, people would. I was really responding to ciwood, sorry that wasn’t clear.

I disagree with you, though, about the payday loan business. Sure, it’s a product people should probably avoid, but people should avoid McDonald’s and cigarettes, too. It’s their choice. And there are plenty of businesses that take advantage of the financially unsophisticated. The ones I personally hate the most are car dealers who charge rediculous lease rates because people don’t understand how leasing works. But just becaue you think they charge too much doesn’t make them illegitimate. If they are charging more than a market rate then anybody is free to open a competing store right next to them that charges less. And since it is a multi-billion dollar, established business model, people would.

]]> By: Lazy Man and Money http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50532 Lazy Man and Money Fri, 01 Dec 2006 21:53:56 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50532 The whole payday loan thing is like anything else that the US government would make illegal to protect the public and/or consumers in general. I really don't know where they draw the line, but how different is it than being a drug dealer? Is it the drug dealer's fault that people buy drugs? One could say that should be legal and people should have the skills to take care of their health and decide what good for them. What if I replace it with cigarette dealer or prosititute? My take is that at some point, the services do far more harm to people than they do good. That's where I feel that regulation should step in. The whole payday loan thing is like anything else that the US government would make illegal to protect the public and/or consumers in general.

I really don’t know where they draw the line, but how different is it than being a drug dealer? Is it the drug dealer’s fault that people buy drugs? One could say that should be legal and people should have the skills to take care of their health and decide what good for them. What if I replace it with cigarette dealer or prosititute?

My take is that at some point, the services do far more harm to people than they do good. That’s where I feel that regulation should step in.

]]> By: MOMM http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/comment-page-1/#comment-50531 MOMM Fri, 01 Dec 2006 21:50:08 +0000 http://allfinancialmatters.com/2006/12/01/debt-in-the-military-a-security-concern/#comment-50531 My DH is in the military and to my knowledge (because money and income is something that is always talked about among the military, we all know what the other makes because it's published for the world to know!) we owe the least amount compared to all of our friends. They all have huge credit card debt (ours is $5K, one friends was $55K), new cars every two years, bonus' spent on toys, new tvs, etc. My DH and I talked about the payday loan stuff recently - something is going on w/ them and our state (SC) or maybe it's the military that is here and the company, etc. Anyway, lots are using it and it's getting them into trouble. Other then being a security risk and not being sent overseas, in extreme cases you can get kicked out. My DH is in the military and to my knowledge (because money and income is something that is always talked about among the military, we all know what the other makes because it’s published for the world to know!) we owe the least amount compared to all of our friends. They all have huge credit card debt (ours is $5K, one friends was $55K), new cars every two years, bonus’ spent on toys, new tvs, etc.

My DH and I talked about the payday loan stuff recently – something is going on w/ them and our state (SC) or maybe it’s the military that is here and the company, etc. Anyway, lots are using it and it’s getting them into trouble. Other then being a security risk and not being sent overseas, in extreme cases you can get kicked out.

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