Knowledge is power—in money matters as with anything else. And military families need knowledge just as much as civilians with regard to money matters: those who know more face financial challenges with more confidence than those less fiscally aware. So say the results of a new survey from First Command Financial Services and First Command Educational Foundation.
A financial literacy test and survey commissioned by the two entities found that, perhaps not surprisingly, a high level of financial knowledge is associated with feelings of emotional well-being among middle-class military families, defined as senior noncommissioned and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000.
The survey showed that military families who have completed a financial literacy program are more likely to feel extremely or very confident about their finances than those who did not (51% versus 43%). About a third of military families say they have completed such a program.
In an interview, Scott Spiker (left), CEO of First Command Financial Services, said that the predominant area in which military test takers failed to get a passing grade involved the selection of appropriate financial tools or products, like stocks, bonds, CDs or savings accounts, to meet certain needs. The three questions on that topic were answered correctly less than 70% of the time.
"These results suggest that some consumers might benefit from a better understanding of how various financial tools can be used to manage their family finances,” Spiker said.
High scorers on the test were more likely to feel financially secure. Test takers with perfect scores were more likely than those with less-than-perfect scores to say they were not financially stretched (70% vs. 47%), were confident of their ability to retire comfortably (55% vs. 28%), or were comfortable with debt (43% vs. 20%).
“These findings underscore the importance of delivering meaningful financial education to our men and women in uniform," Army Gen. (Ret.) Dan K. McNeill of the First Command Military Advisory Board said in a statement. "Financial literacy programs do far more than impart knowledge. They serve to boost feelings of financial confidence and security, helping service members take control of their family finances so they can more effectively focus on their military mission.”
Service members also believe it is important to educate their children about money matters, with about 40% saying they use their own financial mistakes as examples to their kids about what not to do. Spiker said that, among test takers, about 28% of both military personnel and civilians said the best piece of advice they would give to children regardless of age was not to live beyond their means.