Ten Statistics From FINRA’s Military Service Member Money Survey

by Hank

US Army ACU HelmetsRecently, the FINRA Foundation released the results of the first ever Military Financial Capability Survey, and the results were not overly positive about the state of financial readiness of members of the military. The survey painted a somewhat bleak picture of military members’ level of financial knowledge. In 2009, the FINRA Investor Education Foundation conducted a nationwide survey of military members and their spouses. Here are just a few of the highlights that the survey found.

The State Of Military Members’ Money Situations

  1. Approximately 58% of those who indicated in the Military Service Member Money Survey that they were not saving also stated they found it somewhat or very difficult to cover their monthly expenses and pay bills.
  2. 32% of enlisted personnel and junior non-commissioned officers (NCOs) used at least one method of non-bank borrowing in the past five years (payday lenders, pawn shops, tax refund advances, or other non-traditional loans).
  3. 53% of enlisted personnel and NCOs paid only the minimum monthly payment on a credit card compared to 40% of the general military population.
  4. Over one-third of military survey respondents reported facing difficulties in covering monthly expenses and paying bills.
  5. Only half of the respondents have “rainy day” funds set aside for unanticipated financial emergencies.
  6. just slightly more than half plan for expected life events such as their children’s college education or their own retirement.
  7. Over 25% of the members of the military who own a credit card reported owing more than $10,000 in credit card debt on them.
  8. 25% of individuals with checking accounts reported in the Military Service Member Money Survey overdrawing those accounts on occasion.
  9. 9% of the Military Service Member Money Survey’s respondents have taken out a loan from their defined contribution plan (such as TSP) during the past 12 months, and 6% have taken a permanent hardship withdrawal.
  10. 58% of the military reported not comparison shopping for credit cards and to make matters worse, 66% reported not paying their credit cards in full. 39% do not comparison shop for car loans, and 24% didn’t shop around for their mortgage.

This study provides critical information about how military families are making ends meet, planning ahead, and managing different financial products. It also shows how much understanding there is of financial knowledge and money decision making.

The Military Survey is the second of three surveys that make up the National Financial Capability Study, which was conducted to assess the financial behaviors that affect the finances of Americans. You can find the complete survey results on the FINRA website.

Photo Credit: Flickr – soldiersmediacenter

{ 2 comments… read them below or add one }

Pat S. February 17, 2011 at 8:01 pm

Eye opening post, Hank. As a military member myself, I often bring up the topic of personal finance with other military members, and find these statistics, though sobering, most believable. We owe our military better financial education from boot camp onwards.
Pat

Jerry February 19, 2011 at 10:02 am

This goes right along with what I saw as an enlisted corpsman… naive young Marines and Sailors with no information on financial matters would routinely lead themselves into money troubles again and again. There should be detailed training in boot camp and beyond, as Pat mentioned, into savings, insurance, investments, and how to balance a checkbook… etc.
Jerry

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