Military Families Continue to Face Financial Stress

Blue Star Families Survey Shows Positive Financial Behaviors, but challenges remain as financial stress lingers. This recent survey of military families found that nearly two-thirds – 65 percent – of respondents experience stress related to their current financial condition.

The 2013 Military Family Lifestyle Survey was conducted by Blue Star Families, a national nonprofit network of military families dedicated to supporting, connecting and empowering military families. The fourth Blue Star Families survey, sponsored in part by USAA, received input from more than 5,100 respondents, who identified financial security as one of the top concerns faced by military families.

“Our mission is to help facilitate the financial security of the military community and their families,” said retired Army Lt. Col. J.J. Montanaro, a CERTIFIED FINANCIAL PLANNER® at USAA. “This survey provides insight into both the good and bad financial patterns of military families and helps us deliver the advice our members need.”

Additional financial-related survey findings include:

  • Debt and Budgeting. While more than one in five (22 percent) of respondents owed no credit-card debt, more than a third (37 percent) owed more than $5,000. At the same time, most (87 percent) respondents reported using a household budget, but 63 percent reported following it only loosely. Montanaro suggested that “strict budgeting is key to avoiding debt, as it’s one of the best ways to ensure you spend less than you earn.”
  • Saving. Respondents identified the top three obstacles to financial security as: lack of spouse employment (49 percent), uncertainty in military life (45 percent), and frequent moves (40 percent). While half of respondents reported having the equivalent of three months of expenses in an emergency fund to cover unexpected costs, Montanaro noted that “the mobile nature of military life makes it even more important for military families to save an emergency fund that will cover six months of living expenses.”
  • Retirement. Eighty-seven percent of military families report using some type of vehicle to save for retirement; however, only 44 percent of service members used the military’s Thrift Savings Plan, the federal government’s version of a 401(k), which allows money to grow tax-deferred and is available to all service members. Montanaro counseled that “regular saving is the foundation of a retirement plan and an automatic savings option like the Thrift Savings Plan is worth all service members exploring.”
  • Life Insurance. Three out of four (74 percent) respondents participated in the Servicemembers’ Group Life Insurance (SGLI) program, provided by the Department of Defense. The program automatically provides service members up to $400,000 of term life insurance protection. Montanaro said “the number of participants reported was surprising because of the automatic enrollment. Military members must decline or reduce their SGLI coverage, otherwise coverage is active at the maximum amount.” He proposed that “all service members take advantage of this program, and regularly use a life insurance calculator to see if additional coverage is needed.”

“Ninety percent of respondents reported that more preventive financial education is needed,” said Debbie Bradbard, Ph.D., deputy director of research and policy for Blue Star Families. “Blue Star Families’ relationship with USAA is one way we can help military families get the education and financial advice they need, empowering them to maximize their benefits and make informed financial decisions.”

Bradbard said the one-month online survey was open to military members and their families with nearly two-thirds (62 percent) of the 5,125 military family members representing officer and enlisted as well as Guard and Reserve families completing the survey.

For more financial advice, military families can view the 2013 Military Family Lifestyles Survey video series at


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