The Financially Fierce Blog
The Financial Intelligence Factor: Are Your Finances Ready for Your Security Clearance Review?
Having a career that is dependent upon maintaining a security clearance adds an additional layer of stress to your job. You can be the hardest working employee with the greatest skills and still be fired because you lost your security clearance. Financial problems are the number one reason security clearances are revoked.
I’ve worked with clients who have received “that letter” from the Office of Personnel Management (OPM). It’s the letter that says your security clearance is being reviewed and there are various financial matters that are a concern. You’re told your clearance could be revoked if a sufficient response regarding your financial problems isn’t received by the OPM. Ouch!
One of my clients, who was smart enough to seek out help right away, had a list of 12 debts included in her letter that were either past due or in collections. She was in a panic. How was she going to take care of her family if she lost her security clearance? She didn’t understand why her personal finances mattered for her employment. In her mind, the two were very separate matters.
The reason OPM cares about your personal finances is because it believes that “failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified information.” In other words, someone who has too much debt may engage in illegal activities or take bribes, making it reckless for the government or a government contracting company to employ such a person.
My client with the 12 “bad” debts had all the red flags for revoking her security clearance. She was behind on her mortgage. She had maxed out her credit cards. She took out payday loans. And she owed on her taxes. On her income, there wasn’t a realistic payment plan. It appeared a loss of her clearance was close at hand.
My client assumed that OPM wanted her to pay off the debts or bring them current by the deadline to respond to the letter which is often no more than two weeks. Lucky for her, she didn’t try to handle the situation on her own and sought out help. The letter regarding the possible revocation of a clearance is very confusing and unclear on what type of response is needed. Most assume that they have to pay off the past due debts. Clearly if their finances are a mess they have no way of achieving that goal.
I was able to walk my client thru the review/response process and help her keep her clearance. I knew that OPM wasn’t looking for the debts to be paid off but instead looking for a plan on how my client was going to deal with the debts. I made sure my client’s response included information on the payment plan that was worked out regarding each debt. We also provided information on why my client got into debt and how she was going to avoid getting into this level of debt again. It turned out that my client’s financial problems began when her husband lost his job. He was unemployed for 6 months. We put together a budget to show that we decreased her family expenses to less than the income coming into the house. The family may have had to give up premium cable (and be happy with Netflix) but it’s a fair tradeoff to keep her clearance and her career.
It was clear that my client and her husband didn’t have a good grasp on how to handle their family finances. Their lack of an emergency fund placed their family in jeopardy. Their overspending caused them to carry large debt balances. And they had taken no steps towards educating themselves on personal finance. Your level (or lack thereof) of financial intelligence could place you in the same situation. If your personal finances are placing your security clearance at risk, it’s time for you to get educated. You can’t afford not to.
If you and your security cleared teams want to place yourselves in better financial standing to maintain your security clearances, contact me about financial training that I can bring to your company.