Issued by FINRA’s Investor Education Foundation, the “Financial Capability in the United States—2012 Report of Military Findings” survey reveals a military population that is relatively strong with respect to financial capabilities.
“Our survey reveals that most service members are taking control of their finances,” says Gerri Walsh, president of the FINRA Investor Education Foundation. “Three-quarters have a retirement account, nearly 80% are living within their means, and many have participated in financial education offered by the military.”
One interesting finding from the report shows the majority of military respondents (57%) report having no difficulty covering monthly expenses and bills. At the same time, more than half of respondents (54%) also said they have “rainy day” funds set aside for unanticipated financial emergencies. A similar proportion reported saving for predictable life events, such as a child’s college education.
When it comes to managing financial products, the picture for military members is somewhat less positive. Slightly less than half (49%) of surveyed military personnel reported engaging in “costly” investment behaviors. These include such actions as paying the monthly minimum on debt, allowing late fees to accrue or using cash advances from credit cards to meet expenses.
On a test of five basic financial literacy questions, military respondents answered on average three financial literacy questions correctly. While more than four out of five military respondents have positive perceptions of their own financial knowledge and math skills, only 15% were able to answer all five financial literacy questions correctly.
To provide context in which to view the survey results, the report includes a section that compares key military findings to data from FINRA’s 2012 state-by-state financial capabilities survey. Results of the comparison suggest that military respondents do better than national norms on making ends meet, planning ahead and financial knowledge—three of the four main components addressed by the surveys.
However, military respondents appear to be more at risk than the national population when it comes to managing financial products, the forth category examined in the surveys.
Within the military sample, financial capability measured lowest among the entry-level enlisted personnel surveyed.
A full copy of the survey and related analysis is available here.