Servicemembers Focus On Financial Literacy For Children

Editor's note: The following analysis comes from a Financial Behaviors Index release.

As uncertainty over the economy and future military benefits affects feelings of financial security and hope, middle-class military families are focusing on improving the financial literacy of their children.

Roughly nine out of 10 middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) with children living at home believe it is important to educate them about financial matters, according to a survey jointly commissioned by First Command Financial Services, Inc., and First Command Educational Foundation.

Results of the First Command Financial Behaviors Index reveal that survey respondents overwhelming believe in the importance of teaching financial information at school as well as in the home (91 percent and 97 percent, respectively).

“These survey results reveal that servicemembers and their spouses clearly recognize the value of preparing their children now for the financial challenges they will face as adults,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Almost half of our survey respondents with children living at home say they often use their own personal financial mistakes to educate their children. These military families are moving beyond factual information to convey their unique experiences with money, thereby reinforcing the importance of taking personal responsibility today and instilling a sense of security and hope for tomorrow.”

Notably, this is the same approach many financial professionals take to foster financial literacy and responsibility in their own children. In a previous survey, seven out of ten First Command Financial Advisors said they use real-life financial mistakes – those made by others as well as their own – to educate their children about money.

Financial Advisors said the best pieces of financial advice they would give to children regardless of age include:

• Learning not to live beyond your means (34 percent)
• Paying yourself first (31 percent)
• Learning to budget responsibly (9 percent)

“When talking to children about money it is important to have an honest and open dialogue,” Spiker said. “Sharing your own financial experiences is an ideal way to help your children deal with some of the anxiety they may be feeling in today’s uncertain economy and prepare them for a financially responsible tomorrow.”

This focus on educating children comes at an appropriate time for First Command Educational Foundation, which is pursuing a national expansion of its popular financial literacy program for high school students. Called Money Matters Online, the new resource is an online version of the Foundation's financial literacy curriculum approved by the Texas State Board of Education. The program is funded primarily through a $250,000 gift from First Command Financial Services, Inc.

“Money Matters Online represents an important step toward making our dream of financial literacy a reality for all of our nation's youth," said Vickie Mauldin, CEO of First Command Educational Foundation. "This new educational resource is  

particularly important in light of the nation's ongoing economic turmoil, which is affecting high school students and their families across the country. Our expansion efforts include developing a military-oriented version of the program as part of our larger goal to help servicemembers and their families feel more secure in their financial lives so they can concentrate on their mission of defending our nation.”

Notably, participation in a financial education program appears to have a positive effect on financial literacy. In a recent test of financial knowledge jointly commissioned by the Foundation and First Command Financial Services, one in four test takers who had completed a financial literacy program answered all questions correctly. In contrast, just 17 percent of test takers who did not complete a financial literacy program earned a perfect score.