Thursday, October 14, 2010
The FINRA Investor Education Foundation released a survey that measures the overall financial capabilities of U.S. military personnel. The Military Survey – one of three linked surveys analyzing the financial capability of American adults – was developed in consultation with the U.S. Department of the Treasury and the President's Advisory Council on Financial Literacy. Some of the findings are predictable; others more surprising. Thus, unfortunately, the study reveals that men and women in uniform face considerable obstacles in maintaining their financial readiness:
- Military families are heavily in debt to credit card issuers, with over one in four respondents reporting more than $10,000 in credit card debt.
- One in four servicemembers with checking accounts reported overdrawing their accounts, which typically incurs significant fees.
- More than one in five (21 percent) servicemembers used high-cost, non-bank borrowing such as payday or auto title loans in the last five years.
- Over half of enlisted personnel and junior non-commissioned officers reported that in some months, they made only the minimum payment on their credit cards.
- Only 50 percent of military respondents have a "rainy day" fund for unanticipated financial emergencies.
However, more surprising perhaps, military families are outpacing their civilian counterparts in:
- keeping up with monthly expenses;
- calculating how much they need to save for retirement;
- shopping around to compare financial products;
- checking their credit score and credit report; and
- demonstrating higher levels of financial literacy.