FINRA Survey Finds Military Has Strong Financial Capability, but Still Lack Emergency Planning
Last week the FINRA Investor Education Foundation released the National Financial Capability Study's Military Survey to gauge how the military makes financial decisions.
The survey revealed that the military population has strong financial capability compared with overall U.S. population. Within the military sample however, entry-listed personnel (E1-E4) rated lowest for financial capability. The survey also revealed that servicemen and women:
- Have good control over their finances, with three quarters having a retirement account
- Nearly 80 percent are living within their means
- Many have participated in financial education offered by the military.
The Military Survey is one of two surveys that make up the 2012 National Financial Capability Study. The 2012 Study was developed in consultation with the President’s Advisory Council on Financial Capability, the U.S. Department of the Treasury and other federal agencies. Complete survey findings can be found at www.USFinancialCapability.org.
A significant part of financial capability is the ability to make ends meet through adequate savings. However 19% reported that their household spent more than their income, which can be a direct result of individuals not balancing monthly income and expenses. Unfortunately this means a lack of saving will most likely result in struggling to make ends meet.
The survey also provided insights into how military families manage their financial resources, including how they make ends meet and make financial decisions. Some of those insights include:
- Making Ends Meet: Fifty-seven percent of military respondents report they have no difficulty in covering their monthly expenses.
- Planning Ahead: More than half of the respondents (57 percent) have emergency funds set aside for unexpected financial emergencies.
- Managing Financial Products: Nearly half of credit card holders (49 percent) engage in costly behaviors such as paying the minimum, paying late or over-the-limit credit card fees, or using cash advances from their credit cards.
- Financial Knowledge: On a test of basic financial literacy questions, military respondents answered an average of 60% correctly.
More information about the National Financial Capability Study, can be found at www.USFinancialCapability.org.
- Category: Blog
- Published: 12 December 2013