First Command Financial Behavior Survey Results: Long-Term Trend of Financial Readiness Gap Between Military Families & General Population

Written By: Christina Etchberger, Founder, President & CEO of It’s a Military Life

First Command Financial Services, Inc. places a particular emphasis on coaching their clients to practice productive financial behaviors. Every year through First Command’s Financial Behaviors Index?, an online survey measures financial readiness among military families.

Who does the survey target? Middle-class Military families of Commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000.

“Every month we are taking the temperature of issues relevant to the military, what issues are specifically on their mind, where is the perspective relative to different financial topics”,? Executive Vice President and National Director of Advisor Operations, John Osarczuk, stated about the Financial Behaviors Index.

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What does the survey measure? The financial readiness test is designed to measure basic money knowledge with a nine-question online questionnaire.

What were the results of the survey? Results indicated an average 57% for the military and 69% for the general population of basic money knowledge. The results are a consistent trend seen in 10 of the past 12 years. Despite 54% of military families reporting completion of a financial training or educational program, compared to 24% for the general population, there still is a long-term trend of a lesser basic money knowledge than the general population.

The military community continuously provides very informative briefings and programming?dedicated to financial readiness, but it seems like military families don’t know how to successfully apply it to their unique military lifestyle compared to the general population. The gap is surprising considering the many resources out there, which leads to the conclusion that families need more direction from experts in financial readiness.

“Among those who reported completing one of these educational programs, just 7% of military test-takers correctly answered at least seven questions in the quiz. That compares to 56% in the general population,” stated Osarczuk.

“The results of our annual financial readiness test reveal a clear need to enhance the financial training and resources available to service members and their spouses,” said First Command President/CEO Mark Steffe. “We believe financial education and training for the military is part of the solution, but face-to-face coaching is where the financial services industry can do the most good.”?

What does the survey indicate? Surveys of military families consistently indicate that those who work with a financial advisor are more likely to exhibit better financial behaviors, with more confidence about their financial future.?

What are the benefits of financial coaching via First Command?

Face-to-face financial coaching focuses on the unique needs of military families, which include the constant life changes, from deployments to PCS moves, lack of disposable income, and spousal employment challenges. Financial coaching can help improve the financial outlook.?

“Financial advisors are an important source of money knowledge, but coaching is where they bring the greatest value” Steffe said. “Through face-to-face coaching, our advisors help military families leverage their pay and benefits and encourage them to save more, spend less and reduce debt. This is one of the key reasons we waive financial planning fees for active-duty military families. Coaching helps families bridge the gap in their own financial knowledge by focusing on positive financial behaviors. The result is they feel more confident in their efforts to pursue long-term financial security.”

In addition, First Command’s Military Advisory Board, a select group of retired senior flag officers and senior enlisted leaders advise company leadership on how to best serve the interests of career military families.?

Board member Jason Vanderhaden, a retired Master Chief Petty Officer of the U.S. Coast Guard, explained that ”military families face constant life changes, from deployments to PCS moves, making financial planning difficult. In addition, military families don't have much disposable income and many live paycheck to paycheck. Those challenges make financial education, training and coaching all the more important.”

The index found 81% of active-duty families who have a financial advisor feel extremely or very confident their financial situation will improve in the next year (compared to 65% who do not have an advisor).

What can military families do to improve their financial readiness?

Communication is key between the service member and military spouse. A common pattern seen is the service member focusing a lot of their energy on the mission and overall assignment, rightfully so, while the military spouse is left trying to figure out how to juggle the unpredictable, while still managing the everyday life and most likely their professional responsibilities.

Families also need to advocate for themselves. There are long term consequences if military families are unaware of the issue. After addressing the importance of financial readiness, military families must take advantage of the educational resources provided by the military and seek out a financial advisor to guide them.?

“Different financial situations require different financial behaviors, responses, and planning. All of that allows military families to advocate for themselves,” Osarczuk said about the importance of militaries taking control of their own financial future.

“4 out of 5 of First Command’s financial advisors are military spouses or veterans”, Osarczuk proudly stated about First Command’s one of a kind services. The advisors have walked in the shoes of the family members, whether as a spouse or service member, so the guidance given will be one of great experience both financially and regarding the military lifestyle.

If families follow a timeline with an advisor of what to do during certain phases of their life — PCSing, deployment, transition, retirement, etc. with financial planning as a key component within this process, families will be far better off in the long run.

How will It’s a Military Life stand with First Command to help military families with financial planning and support?

At It’s a Military Life we are a 501c3 nonprofit organization that highlights resources for military families to better their overall well-being in the ever-changing military community. Our goal is to lead military families in the right direction when it comes to their personal and professional journey. It’s our responsibility to go through the many resources that are out there, and share which ones we find that will make the most positive impact for our community.?

More About First Command and the Financial Behaviors Index: A Deeper Dive

About the First Command Financial Behaviors Index?

Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index? assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3% with a 95% level of confidence. For more details on our research, please email [email protected]. https://www.firstcommand.com/fbi/

About Sentient Decision Science, Inc.

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index?. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.

About First Command

First Command Financial Services and its subsidiaries, including First Command Brokerage Services, First Command Advisory Services and First Command Bank, coach our Nation’s military families in their pursuit of financial security. Since 1958, First Command Financial Advisors have been shaping positive financial behaviors through face-to-face coaching with hundreds of thousands of client families.

?2023 First Command Financial Services, Inc. parent of First Command Brokerage Services, Inc (Member SIPC, FINRA), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank.? Securities products and brokerage services are provided by First Command Brokerage Services, Inc.,? a broker-dealer.? Financial planning and investment advisory services are provided by First Command Advisory Services, Inc., an investment adviser. Insurance products and services are provided by First Command Insurance Services, Inc.? Banking products and services are provided by First Command Bank (Member FDIC, Equal Housing Lender). Securities are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Financial Services, Inc. and its related entities are not affiliated with, authorized to sell or represent on behalf of or otherwise endorsed by any federal employee benefits programs referenced, by the U.S. government, or the U.S. Armed Forces.