A 2019 study conducted by Debt.org found that more than one-third of enlisted military members struggled to pay their bills on time, and about half said they had to get a second job to supplement their income. In addition, more than 84% of enlisted members and their spouses/partners expressed concerns about personal finances – and put buying a house, going back to school, and other major expenses on hold.
The study further found that 11% of enlisted families had debts in collection.
Last fall, the National Military Family Association (NMFA) called upon lawmakers to help address the fact that pay for junior enlisted personnel wasn’t even keeping pace with inflation. Fortunately, some relief is on the way. The Air Education and Training Command announced that beginning in April, all Department of Defense (DoD) junior enlisted service members will receive a pay boost following the U.S. Senate’s approval of a $895 billion defense policy.
President Joe Biden signed the Service Member Quality of Life and National Defense Authorization Act (NDDA) into law, and all service members will receive a 4.5% pay bump, which begins this month. In addition, in April, an additional 10% pay increase will go into effect specifically for those holding the rank of E-1 through E-4. The increase was meant to help provide additional opportunities for junior service members to prepare for their financial futures.
The pay increase does fall short of the NMFA’s call for a 19.5% request for junior enlisted members, but in addition to the 10% increase, the Fiscal Year 2025 (FY25) NDAA will also provide full funding for child care fee assistance programs, and an incase in Pentagon child care center pay to make it competitive with private industry. The NDAA will also extend the DoD’s authority to fill open civilian positions with qualified military spouses and extend eligibility for the Basic Needs Allowance (BNA) –increasing from 150% to 200% of federal poverty guidelines.
“Service shouldn’t cost more. Military families come to us every day looking for help solving problems they shouldn’t have in the first place,” said Besa Pinchotti, NMFA CEO in December when the bill passed both houses of Congress. “We are pleased that Congress is taking much-needed action to show our service members that America has their back — just as they have ours.”
Financial Guidance
The Air Force Military and Family Readiness Center (M&FRC) also has stepped up to offer professional financial planning services for service members and their families at no cost.
“The first step for any service member should be to go see their financial advisor on their installation to help determine exactly where they are in their financial lives,” said Ben Paulding, Air Force M&FRC financial counselor. “Having professional guidance can help analyze the top priority on what to do with the extra money.”
Pauling said that step two is having a budget, and the center helps service members set one up.
“How can you be in control of your finances if you don’t know where your money is going?” Paulding added. “The best quality of life you can have starts with achieving financial security.”
Higher Pay Needed to Address Recruiting Challenges
Even as the country has faced high inflation, it has seen a hot jobs market – which has been a factor in the services meeting their recruiting goals, warned the Congressional Research Service last month.
The government watchdog group explained that “Basic pay is just one component of servicemember compensation, and noted that “regular military compensation (RMC), defined in law as the total of ‘basic pay, basic allowance for housing (BAH), basic allowance for subsistence (BAS), and Federal tax advantage accruing to the aforementioned allowances'” only exceeds the Pentagon’s “benchmark of the 70th percentile for civilians with comparable education and experience.”
It warned that the 70th percentile benchmark may be too low, given the difficult recruiting environment, and recommended that the DoD “raise these pay benchmarks to the 80th percentile and the 75th percentile for enlisted and officers, respectively.”
It does appear that the Pentagon is starting to address the issue of pay.
