Military Families Make The Grade On Financial Literacy Test, First Command Reports
FORT WORTH, Texas – Active-duty servicemembers are a financially literate lot, earning an average grade of 77 percent on a test of financial knowledge jointly commissioned by First Command Financial Services, Inc., and First Command Educational Foundation.
The average middle-class military family (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) correctly answered 6.97 out of nine questions in a general financial literacy test administered through the First Command Financial Behaviors Index®. And one in five test takers earned a perfect score, said Scott Spiker, CEO of First Command Financial Services, Inc.
“At a time when we continue to hear troubling reports of ineffective financial behaviors among some junior servicemembers, these test results offer an encouraging counterpoint for the leadership ranks of the armed forces,” Spiker said. “Our more experienced men and women in uniform possess a meaningful knowledge of money matters. We see ample evidence of their financial literacy in our monthly Index surveys, which reveal that middle-class military families are focused on saving more, spending less and cutting debt as part of a more frugal lifestyle.”
The Index reveals that financial education is important to servicemembers and their families. Roughly one-third of test takers have completed a financial literacy or financial education program. And military families are more likely to have completed this type of coursework than the general population (32 percent versus 20 percent).
That’s good news to Vickie Mauldin, chief executive officer of First Command Educational Foundation. The non-profit organization recently announced plans to develop a military-oriented version of Money Matters Online, its popular financial literacy program for high school students. Funded primarily through a $250,000 gift from First Command Financial Services, the program is designed to meet the growing need for financial literacy education in the military services.
“We are committed to delivering meaningful coursework and instructions that will help our servicemembers feel more secure in their financial lives,” Mauldin said. “We see in the Index findings that while military families are more likely than civilians to have completed a financial education program, the overall average number of correct responses to the financial literacy test does not significantly differ between military and general-population respondents. Our goal is to help military families pull ahead to become one of the nation’s most financially literate populations. We are committed to delivering the highest quality instruction to as many active-duty families as we can.”
Financial knowledge is particularly important to the emotional well-being of active-duty families. The Index reveals that financial literacy is strongly associated with feelings of financial confidence and security. Sixty-three percent of military respondents who earned a perfect score on the financial literacy test say they feel financially secure compared to only 28 percent with lower test scores – a 35-point gap. Among general population respondents, 32 percent of those who earned a perfect score say they feel financially secure compared to 24 percent of those with lower financial literacy – an eight-point gap.
“The data suggest that while financial literacy improves feelings of financial confidence and security among middle-class consumers, there is a larger divide in these feelings among servicemembers and their families,” Spiker said. “These findings stress the importance of creating and supporting financial education programs that will help to improve the financial literacy of all of our men and women in uniform, giving them the confidence and sense of security that will help them concentrate on their mission of defending our nation.”
For more information on the financial literacy test, including a list of questions and results, see our report titled Financial Literacy in Military Families.
About First Command Educational Foundation
First Command Educational Foundation (FCEF) has been proudly supporting scholars and their families since 1983. FCEF is a 501(c)(3) public charity, and has worked tirelessly to promote their mission to educate those who serve. To that end, FCEF has awarded almost $4 million in scholarship grants to help offset the costs of higher education, and has educated over 60 thousand individuals on numerous financial literacy topics. www.fcef.com
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 percent with a 95 percent level of confidence. www.firstcommand.com/research
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 Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc. in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products 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 Educational Foundation is a 501(c)(3) public charity. It is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.
Posted: March 7, 2012