Veteran Financial Stability: The community feedback period for this idea began on 8/8/2018 and ended on 10/6/2018. *STATUS UPDATE*

What is the problem that needs to be addressed? Please describe how it is related to mental health.

Financial instability amongst recently discharged transitioning veterans causes increased stress and risk of loss of basic necessities including housing, utilities, food and transportation. These factors greatly tax the mental health of subject individuals. If we can reduce financial instability, we can reduce financial stress and reduce mental health stressors.

A 2017 study by the University of California, Irvine on homelessness in Orange County revealed that 12% of the homeless interviewed were veterans, which is slightly more than double the percentage of veterans in the county in 2015. The U.S. Department of Veterans Affairs estimates that PTSD afflicts as many as 10 percent of Gulf War (Desert Storm) veterans, 11 percent of veterans of the war in Afghanistan and 20 percent of Iraqi war veterans. PTSD is often accompanied by depression, substance abuse, or other anxiety disorders. People with housing problems are at greater risk of mental health problems.

The causes of the financial instability that can result in loss of basic human needs are multi-fold and include delays in receiving financial resources including final military pay checks, VA Disability and Unemployment Benefits, Post 9/11 GI Bill as well as under-developed Financial Intelligence (FI), the intersection between financial knowledge/skills and financial behavior.

Why is this a concern for Orange County? What can Orange County and other counties learn from this project?

Respondent skipped this question.

What is currently being done to resolve this problem in our county and throughout the United States? If applicable: Is it working; why or why not?

Many programs and institutions teach overall financial education classes to groups of people. Investment firms, banking institutions, mortgage companies and other financial related agencies have requirements and provide various types of financial education. Our experience and research illustrate that these programs can easily miss the mark in several ways.

According to our experience, the biggest factor overlooked is the effect of the consumer culture on young, financially inexperienced service members and veterans. Like other families, they want nice cars, nice furniture, frequent coffee shop visits. Given their removal from their normal support systems, they also want to live in a ‘good’ neighborhood where they feel safe and confuse the price of housing with the value. Soon, these families are living paycheck to paycheck in a state of denial about their tenuous financial state.

Then, there is a death in the family back home, the tires wear out on the car, they get unexpected orders to move across the country, uniforms change, and they must buy all new uniforms or any of many other events come up and the teetering tower begins to fall. They begin to feel the stress of their financial situation as they skip payments or make partial or late payments and the bills and fees continue to grow.

Before they ask for help, many military and veteran families start their research. They learn about things like “snowballing” your debt, “cash diets” and more and they try to apply it to their situation. But with only the Internet for advice, they are making personal decisions based on only a small part of the information. We hear about families who stopped paying all but one credit card because they were “snowballing” their debt. For the same reason, one family paid off four or five small credit cards rather than a loan that had a 224% interest rate. These mistakes can have long-term negative impacts.

At this point, many of these families become overwhelmed and give up on reducing debt, paying bills on time, maintaining a positive balance in their checking accounts, following a positive-cash flow budget or any other small step toward resolving the problem.

For those who are discharged before these situations are resolved, even in the earliest stages, the situation is dramatically worsened. In addition to the lack of financial skills and the long-term ineffective financial behaviors, they are now without a steady, reliable income of any size. Their final paycheck may be held for up to 120 days; they wait an average of 123 days for Veteran Disability Benefits, Unemployment benefits can be delayed, and the GI Bill may take up to 5 months to be applied depending on date of discharge.

When they overcome their pride, when they are in such a difficult state of crisis that they ask for help, military and veterans and their families are not ready to learn about long-term investments toward retirement or the proper amount that should be in an emergency fund. They desperately need to learn how they can take charge of their financial situation through client-directed goal setting and designing an individualized plan for the accomplishment of those goals.

What is new or different about this project idea? Please describe how this differs from what is already being done (Question 6). Please list any research that was done on this topic.

This project treats financial instability as if it were a self-destructive behavior. Social workers act as financial counselors (and are also certified to provide financial counseling) incorporate a Solutions Focused Approach from the Strengths Perspective to achieve the behavioral change that can last a lifetime. Systems Theory tells us that making the behavioral changes to address depressed FI will have a ripple effect throughout the lives of the clients making those changes.

In many anecdotal examples, clients report improved communication in their marriages, reduced stress levels across their lives (not limited only to financial stress), feeling more confident to discuss finances with their children, and other desirable outcomes that we had not anticipated in implementing this program.

This program will also include a cash grant that can be made payable to the subject family’s creditors. This will bridge the family to the next pay cycle if there is no other means.

This social work process will also parallell generally accepted Change Management practices.

What is the project idea? Please describe how this project will operate.

Clients who are in critical situations and on the verge of loosing a basic necessity, food, shelter, utilities, auto, critical baby needs, etc. can enter into the program. Social workers will conduct one on one case work and perform education, counseling, discovery and various empowerment techniques to inspire and empower each family to create a positive budget and full debt reduction plan. A grant will be necessary half of the times to bridge the families, kin to giving them a fish and teaching them to fish.

This project would intentionally expand these services throughout the E1 – E6 veteran and active duty population in Orange County, 6,000 new veterans each year. The project would include:

  • One full-time social worker (provide individual and small-group financial counseling)
  • One full-time outreach worker (find the veterans and service members who most need this support and let them know STEP is there)
  • One full-time administrative support (lead a team of volunteers to ensure the phones are monitored and the office is open throughout the week to welcome those who need the services)
  • One grant-writer (increase sustainability of the project by identifying and securing additional grant funds)
    67% of applicants complete financial counseling process, with 50% of those receiving a grant.

Additional Information

Respondent skipped this question

June 12, 2018


Please elaborate on how this idea is related to Mental Health.

Innovations Team

Thank you for your idea submission. Upon review and discussion, it was determined that the idea does not have a strong enough link to behavioral health and financial counseling is readily available. The Innovation team is unable to continue exploring this idea under the MHSA Innovation component as currently proposed.

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