"Credit is wealth. The 20 million won you save during military service and a high credit score will become valuable assets in the future."
Kim Eun-kyung, President of the Korea Inclusive Finance Agency (KIFA), visited the 6th Infantry Division's basic training center in Cheorwon, Gangwon Province on the 10th to deliver financial education to 280 soldiers. She taught young servicemen just beginning their military service the fundamentals of building savings from their monthly pay and managing credit. "Military service is a special opportunity to build financial strength," Kim emphasized.
Kim's visit to the military base stems from concerns about soldiers' asset management. As a professor at Hankuk University of Foreign Studies Law School, she has observed young people's investment behavior through her "Financial Life and Law" course and has grown alarmed at the increasing number of cases of reckless high-risk investing. She determined that the situation could no longer be ignored, particularly as private first class monthly pay has risen to 1.5 million won, yet many soldiers fall into debt traps due to lack of proper financial management knowledge.
Taking the podium, Kim addressed debt-fueled investing problems emerging in the military, including cyber gambling, and advised that credit management should begin in the early twenties. She highlighted that interest rates for borrowers with credit scores of 1,000 versus 600 differ by a factor of two, warning that poor choices can become shackles on one's financial life. "You must start managing your credit from your early twenties," she said. "If you protect your credit, prosperity will follow."
Kim also outlined factors affecting credit scores and reviewed daily habits worth maintaining. "Avoiding delinquency even on small amounts and using the same credit card for an extended period benefits your credit score," she said. "If you're thinking about your future, it's best not to take out loans during military service."
She also introduced asset-building support programs to help soldiers accumulate seed money for civilian life. Kim encouraged enrollment in the Military Tomorrow Preparation Savings, which adds up to 550,000 won in government matching funds for monthly deposits of 550,000 won, and the Youth Future Savings launching in June, noting that soldiers could save over 20 million won by discharge.
KIFA plans to expand financial education for military personnel. Since signing a memorandum of understanding with Army Headquarters in 2019, the agency has provided training to 208,000 servicemembers through the end of last year. A trainee surnamed Kwon who attended the session said, "I thought credit management was a distant concern. I will develop sound financial habits during my military service."