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Military folks more financially savvy than civilians

The notion that military people are too busy training, fighting or moving between assignments to pay close attention to personal finances is challenged by results of a new survey.

The first-ever Military Financial Capability Study finds that service members are more likely than civilians to keep up with monthly expenses, save for their kids' education, avoid payday lenders, invest in stocks and bonds, and even check their own credit scores.

Where military members need more financial counseling is credit card balances. Twenty-seven percent carry more than $10,000 in credit card debt versus only 16 percent of civilians surveyed.

But overall "we can definitely say that (military personnel) are more savvy than the general population" regarding personal finances, said John Gannon, president of the FINRA Investor Education Foundation.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator of securities firms doing business in the United States. Its Investor Education Foundation, which sponsored the survey, operates on the fines collected from security firms that violate laws to protect investors.

Since 2006, the foundation has partnered with the Department of Defense to improve military financial readiness. It holds financial forums for service members, provides continuing education to on-base financial counselors and offers fellowships for military spouses to become Accredited Financial Counselors.

The foundation's campaign to educate military people received its initial funding from $6 million paid by First Command Financial Planning of Fort Worth, Texas, in 2005 to settle charges brought by the Securities and Exchange Commission that the company had mislead military investors.

The new survey of 700 service members and 100 spouses was conducted online in June and July of 2009. The results were linked to a national civilian survey on financial capabilities FINRA conducted earlier.

The report cautions that some disparities in answers from military and civilian respondents reflect demographic differences. Military respondents were more likely to be younger, male, employed full time and high school graduates. Also, the military sample didn't precisely reflect the current force. There was a higher proportion of officers surveyed (31 percent) and a smaller proportion of young enlisted (10 percent in pay grades E-1 to E-4).

Still, Gannon said, the results capture financial challenges for military families and serve as a good baseline for future surveys. Feedback from officials who track financial matters, Gannon said, is that "our data is very spot on" in identifying issues that the troops face.

It's no mystery why the survey shows military people more financially literate than the civilian population, Gannon said.

"If you look at the level of effort that the Department of Defense has put into financial readiness compared to private sector employers, it's really tremendous," he said. He noted that a personal financial manager can be found on every base and the services have mandatory financial education requirements, starting from boot camp. "There aren't too many private sector employers that have such substantial programs."

Military respondents, Gannon said, already are "much more likely to comparison shop for financial products and they're much more willing to check their credit report and credit scores. That is something that the Department of Defense, through its financial readiness program, has always stressed and the numbers are really outstanding."