First Command News & Media


Financial Literacy Slipping in Career Military Families, First Command Reports

The First Command Financial Behaviors Index® reveals that middle-class military families appear less financially knowledgeable than their civilian counterparts

Print-friendly PDF

FORT WORTH, Texas — More than half of America’s career military families were unable to pass a recently-administered financial literacy test, underscoring the importance of new calls for improved financial training for servicemembers.

Results of the fourth annual financial literacy test and survey jointly commissioned by First Command Financial Services, Inc., and First Command Educational Foundation reveal that middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) earned an average grade of 69. It’s the first failing score recorded for military families since the testing program was launched in 2012. More than half (55 percent) of military test takers failed to correctly answer at least seven of the nine questions on the test.

Members of general population families with similar household incomes performed slightly better, eking out a passing score with an average grade of 71. Forty-five percent of civilian test takers failed to correctly answer at least seven of the questions.

These findings align with an independent commission's proposal for a more robust financial education program for active-duty servicemembers. The Military Compensation and Retirement Modernization Commission’s January report calls for the Department of Defense to increase the frequency and strengthen the content of financial literacy training.

“We are deeply concerned to see that military households appear less financially knowledgeable than their civilian counterparts,” said Scott Spiker, CEO of First Command Financial Services. “We agree with the Commission and other government and military leaders who are stressing the importance of strengthening the financial literacy of our men and women in uniform. This issue is particularly important today, when so many servicemembers are worried about how sequestration and defense downsizing may impact their financial futures. These families need information and guidance to develop individual strategies so they can effectively deal with financial challenges today and confidently address their goals for tomorrow.”

Notably, military test takers are significantly more likely than those in the general population to say they have completed a financial literacy program (34 percent versus 25 percent). And almost half of the servicemember group (45 percent) said that the program they completed was administered by the military. But the benefits of these programs are not reflected in military test scores.

Among the subset of military respondents who report completing a financial literacy program, 10 percent earned a perfect score on the test. That’s six points less than the 16 percent of all military test takers who earned a perfect score. In contrast, 13 percent of civilian test takers in both groups earned a perfect score.

These findings lend further support to the Commission’s January report, which states that “existing financial literacy programs do not adequately educate servicemembers and their families on financial matters. According to the 2013 Blue Star Families Annual Lifestyle Survey, only 12 percent of servicemember respondents indicated they were receiving financial education from servicemember training.” The Commission’s report includes a recommendation for the Department of Defense to strengthen partnerships with other federal and non-profit organizations.

Through its Squared Away® program, First Command Financial Services supports financial literacy and education to the military through charitable gifts and hands-on assistance. First Command Educational Foundation, a separate 501(c)(3) charity, provides in-person and online financial literacy tools for servicemembers across the globe as well as increased scholarship opportunities for servicemembers and their families.

“Learning how to manage your personal finances is an important skill for everyone and especially crucial for servicemembers and their families,” said Vickie Coleman, CEO of First Command Educational Foundation. “During my 30 years in the U.S. Air Force, I saw many careers end and marriages fail because the servicemember or family member didn’t understand and practice sound financial behaviors. Our military families are often more susceptible due to frequent relocations, numerous deployments and loss of spousal income. They must be given the financial tools to survive.”

Also, First Command Financial Services supports financial literacy through Project Sanctuary, which provides therapeutic retreats enabling military families to reconnect and reintegrate into their communities. First Command Financial Services, Inc. serves as the organization’s exclusive financial planning partner, providing knowledgeable volunteers who deliver financial education workshops and individual family financial coaching at all retreats.

“It’s never been more important for the public and private sectors to work together on new ways to help servicemembers and their families build a strong foundation of financial knowledge so they may successfully pursue long-term financial security,” Spiker said.

About 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. Financial Behaviors Index

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.


Hiring Our Heroes Project Sanctuary First Command Educational Foundation Army FPA Alliance