The Financial Well-being of Military Families

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Entry into the military is a major turning point in the lives of many young adults; however, little is known about the financial well-being of military families compared to their civilian peers or about the differential effects of aspects of service within the military community. Using representative samples of the United States population and of active-duty military members, this study analyzes 1) differences between military and civilian families in financial well-being; and 2) how characteristics of service affect the financial well-being of military families. Results vary based on the measure of financial well-being examined and by age, race/ethnicity, paygrade/organizational seniority, and spouse employment status. The results generally indicate that the military may be a good place to start because young military families have comparable or more positive financial well-being than their civilian peers, but staying in the military negatively impacts financial well-being. Overall, military families experience a lower level of financial well-being than their civilian peers in regard to income and total household savings (controlling for dual income status, age, number of children, race/ethnicity, and education). Of those families experiencing lower financial well-being, civilian and military spouses share many of the same characteristics, such as being young, being race/ethnic minority members, and having less education.

The analysis indicates that the unique aspects of military life do have differential effects on financial well-being. Military families who have experienced longer separations tend to have lower financial well-being, but number of separations and relocations does not have a significant negative impact on financial well-being. Military spouses who are underemployed have less total household income and less positive perceived financial well-being compared to spouses who are not underemployed. Voluntarily exiting the workforce is positively related to perceived financial well-being and saving habits. Suggestions for future research include creating a single measure of wealth, expanding the types of debt analyzed, conducting a longitudinal study of single and married service members to monitor the development of their financial well-being, and conducting more detailed research on the impact of relocations and separations.