Just 18 and flush with his first full-time paycheck, Kight said he immediately went shopping for a used car. But he collided with a sobering reality: Dealers right off the base were showing him auto loans with staggering interest rates, as high as 20 percent.

"I knew it wasn't good. To pay off the car in five years, I'd be paying almost double the asking price," Kight recalls.

He walked away, but too often saw many of his fellow soldiers get sucked into bad loans.

"It's the normal pitfalls facing young people today," said Kight. "They don't have enough financial education to know about their credit score or high interest rates or the real amount they're paying on a loan."

Today, the Travis Air Force Base sergeant is an advocate for the U.S. military's recent efforts to better equip its personnel with money-saving skills.

Like many American households, some military families have been squeezed by rapidly rising prices for gas and groceries, as well as plummeting home values that affect mortgages and their ability to borrow.

But they're also more vulnerable to predatory lending. They are three times more likely than civilians to take out so-called payday loans that charge exorbitant interest rates -- as high as 400 percent, according to a 2006 federal Department of Defense report.

These lenders often target military personnel, especially young recruits with their first full-time paycheck. Last year, a state task force report noted that Oceanside, home to the Camp Pendleton Marine Corps Base, has more payday lenders than any other ZIP code in California.

To combat the problem, the DOD two years ago launched "Military Saves," a promotional campaign to "persuade, motivate and encourage" military families to be savers. Both Congress and California have passed bills to cap annual percentage rates at 36 percent for these types of loans to military personnel.

It's part of ramped-up measures to ensure that money concerns aren't a distraction for military men and women.

"We equate financial readiness with mission readiness," said Pentagon spokesman Les' Melnyk in Washington, D.C.

"If our personnel are worried about their credit card debt or making the next mortgage payment, it will affect their military readiness with potentially deadly consequences," Melnyk said.

Most new recruits, Melnyk said, don't have good savings habits. "We want to change the spend-first, borrow-to-buy mentality that so many Americans grow up with."

But it's not just young recruits who are vulnerable. "The subprime market caught a lot of military families in a real lurch, just like any family," said John Revell, spokesman for USA Cares, Inc., a Kentucky-based nonprofit that doles out grants to financially strapped military families and helps them avoid foreclosure or eviction.

National Guard reservists, who temporarily give up their civilian jobs when sent to war zones like Iraq or Afghanistan, are especially hard hit, he said. "When a husband or wife is deployed, there's less income and less financial help available," said Revell, whose company has given more than $5 million in financial aid to military families since 2003.

But there's more at stake than losing the house.

Under military law, service members can be discharged or even jailed for running up excessive amounts of debt. And chronic debt-to-income imbalances can jeopardize their national security clearance.

According to a 2007 California task force report, the number of U.S. Navy discharges due to debt increased a whopping 903 percent, from 194 in 2000 to 1,999 in 2005.

State Assemblyman Ted Lieu (D-Torrance), who has sponsored several bills on military financial protections, saw the effects while serving as an Air Force attorney in California and Guam, where he often counseled young recruits struggling with debt.

"Many enlisted folks are straight out of high school, and there's no financial literacy training," said Lieu. "All of a sudden, they get a paycheck every two weeks. But at the same time, they're underpaid. As a result, they go to payday loan stores to fill the gap and get into deeper and deeper debt."

(A U.S. Army private makes about $21,650 in annual pay, not including sizable enlistment or combat bonuses and free on-base housing.)

National Guard Sgt. Jerry Pera, an Auburn native who ships off to Kosovo in January, said, "Everyone in military service needs to be vigilant on what kind of financial transaction they're getting into." His advice: "Read the fine print."

In addition to the Military Saves program, there are other state and federal efforts:

--Trained financial counselors are available on most major military bases to provide free money-management advice.

--Military families have 24-hour, toll-free access to Military OneSource, which offers certified financial planners and other resources.

--Military personnel are encouraged to participate in thrift savings plans (TSPs), which are automatic payroll-deduction programs that set aside tax-free income for retirement. They are similar to 401(k) plans.

In California, the state Department of Corporations launched TAPS (Troops Against Predatory Scams), an informational program to warn military personnel about financial fraud. In the last year, TAPS handed out 20,000 booklets to military service members and families, and made 77 presentations at military bases and to veterans groups.

Nationally, private organizations have popped up to offer financial assistance to military personnel. USA Cares, for instance, partners with the Homeownership Preservation Foundation to provide financial counseling and help military families avoid foreclosure or eviction.

California ranks fourth on USA Cares help list, behind Georgia, Kentucky and Texas. According to its recent report, it has helped 800 military families in California, saving 19 homes from foreclosure and handing out about $300,000 in grants. Among them: $7,500 in mortgage bills to keep a Southern California family of five in their Murrieta home; $500 in overdue rent for a Point Mugu military member and $1,060 for car repair bills for a Fort Irwin enlistee.

All requests are verified. And in cases where a family is too deep in financial trouble to save the home, for instance, there's no money given.

"We can't help everyone. In some cases, they need to sell the house and face reality," said Revell.

For Kight, a savings mind-set is as basic as socking away a small portion of every paycheck. "I've had guys who put just $10 a week -- $20 a paycheck -- into savings. That's two Burger King meals."

Even that small amount adds up, he says, noting that in 20 years, a $10-a-week investment would yield $10,400. And that's without factoring in compounded interest.

"It's never too late," said Kight. "You can start saving right up until the day you die."

Taking Aim at Debt

Military personnel can be particularly vulnerable to predatory lending, a form of "financial quicksand" with excessive fees, constant rollovers and annual interest rates that can hit 300 percent to 400 percent, according to a 2006 study by the Center for Responsible Lending. Among the findings:

--Predatory lending undermines military readiness and harms morale of troops and their families by trapping them in a cycle of debt.

--Military recruits are especially susceptible because they're younger and less experienced in money management.

--Active-duty military personnel in 2005 were three times more likely than civilians to take out a so-called payday loan.

--Payday lenders often target military bases, clustering offices near the front gates.

--In 2005, the cost of abusive payday lending fees to active-duty military was estimated at more than $80 million a year.

--To reduce that impact, Congress last October capped the annual percentage rate at 36 percent for three types of loans to military members: payday loans, tax-refund anticipation loans and vehicle title loans.

--Bee research

Finding Financial Security

--If returning home from active duty, take advantage of the military's "pre-separation counseling," which offers advice on everything from financial planning to resume writing.

--Understand credit ratings. Anyone can review his or her credit report for free once a year. To request a copy, visit the Web sites of the three major credit reporting agencies (Equifax, Experian and TransUnion), or www.annualcredit report.com. Low credit scores usually result in higher interest rates and can affect employment, housing and security ranking.

--Build a better credit score. Those with poor or no credit history can use a gas card or store card to get started. Pay every monthly bill on time and in full to avoid interest charges.

--Live within your means. When starting in the military or re-entering civilian life, it can be tempting to splurge on luxuries. Resist the urge to take out loans or run up credit card bills for fancy cars, furniture or electronic toys.

--Pay yourself first. Set up direct deposit to put part of every paycheck into a separate savings account; aim to set aside three to six months' worth of expenses in case of an emergency. Then work on long-term savings for education or a home purchase.

--Do not jump into homeownership, which can be costly. In addition to a down payment and monthly mortgage, there's insurance, taxes, furnishings and maintenance costs. If you've got budgeting concerns or are unsure if you'll be staying long in the same location, rent.

--Source: www.bills.com

Military Saves

A Dept. of Defense program encouraging military families to reduce debt and save money for long-term financial security.

Troops Against Predatory Scams

A program run by California's Department of Corporations to raise awareness among military personnel about fraudulent investments and predatory lending. Scroll down the home page for the TAPS link.

Military One Source 

Provides 24-hour, toll-free assistance on financial matters for active-duty military personnel. (800) 342-9647.

USA Cares Inc.

A Kentucky-based nonprofit that provides financial counseling, grants for short-term assistance and help to military families in fighting eviction or home foreclosure.

Operation Debt Storm

A debt-reduction program by San Mateo-based Bills.com offering personal finance tips, tools, calculators and other services.

--Source: Bee research

For more advice on reducing debt or managing your finances, visit Military.com's Finance channel.

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