The USAA Military Financial Wellbeing Index offers a comprehensive look into the financial health of active-duty service members and their families. This data-driven study highlights both the progress and challenges faced by military personnel compared to civilians, revealing key trends in savings, debt management, and spending behaviors over the 2019-2023 period. While military families have shown significant improvements in some areas, they continue to grapple with rising costs and inflationary pressures. The index serves as a valuable tool for understanding how military-specific benefits can be leveraged to foster financial resilience.
Financial Progress and Challenges
Military families have made notable strides in improving their financial well-being. Over the past few years, service members have significantly boosted their checking and savings balances, demonstrating a strong commitment to saving. Additionally, there has been a marked reduction in credit card debt, with fewer service members carrying revolving balances. However, recent trends indicate a potential downturn, as savings and checking balances declined slightly in 2023 due to rising living costs. Despite these challenges, the index underscores the importance of proactive financial planning within the military community.
From 2019 to 2023, military families prioritized saving, with checking and savings balances increasing by 23% and 19%, respectively. Debt management also saw improvements, as monthly credit card balances fell by 23%, and fewer service members carried revolving debt. These positive trends suggest that many military families are effectively managing their finances. However, the latter part of 2023 brought challenges, with both savings and checking balances dropping by 10% and 12%, respectively. Rising housing costs and inflation have put pressure on military budgets, emphasizing the need for continued vigilance in financial planning.
Leveraging Unique Military Benefits
The military offers several financial advantages that can help service members and their families achieve long-term stability. Programs like the Thrift Savings Plan (TSP), military pay increases, and the Servicemembers Civil Relief Act (SCRA) provide valuable tools for building financial security. By maximizing these benefits, military families can better navigate economic challenges and set themselves up for a more prosperous future. Education benefits and military discounts further enhance financial resilience, offering additional support for personal and professional growth.
Among the key benefits available to military families, the Thrift Savings Plan stands out as a powerful retirement savings tool. With low fees and automatic contributions, it provides a solid foundation for long-term financial planning. Military pay raises, including a 4.5% increase in January and an additional boost for lower-ranking service members in April, offer opportunities to allocate extra funds toward financial goals. The SCRA caps interest rates on loans and credit cards during active duty, reducing financial burdens. Housing allowances, education programs like the GI Bill, and various discounts all contribute to a comprehensive support system designed to strengthen military families' financial positions. By leveraging these resources, service members can turn financial challenges into opportunities for growth and stability.