Millennials—those born between about 1978 and 1994—came of age in an America that is different than it was for previous generations. They grew up in a country characterized by more racial diversity, a narrower gender gap in educational attainment, large increases in the cost of higher education and the defining events of September 11, 2001. They faced the economic challenges of the Great Recession early in their lives and/or careers. They are also the first “digitally native” generation, and the most educated generation in American history.
Millennials are the largest cohort in the U.S. workplace today. While millennials make up about 30 percent of the general population in the U.S., they constitute nearly three quarters of the service men and women in the military. Understanding the financial capability of millennials in the military is an important step toward understanding the financial capability of the military in general.
Toward this end, the FINRA Foundation performed an analysis of the financial capability of millennials in the military using data from the 2012 National Financial Capability Study. The research revealed that military millennials are much more likely to be married than their non-military peers. Thirty-five percent of active duty millennials surveyed have student loan debt, and about a third have mortgages. Fifty-two percent of survey respondents are concerned that they have too much debt.
Three in four military millennial respondents indicated they were offered financial education, and of those, almost half participated in financial education—a financial education rate that is much higher than the national average. In addition, forty-one percent of the military millennial respondents have high levels of financial literacy, again, a rate significantly higher than the national average, which is 24 percent.
Not surprisingly, married military millennials with dependents reported more financial stress than those without. Of the sample, twenty-one percent of active duty married millennials have unpaid medical bills, and over 40 percent engaged in costly credit card behaviors, such as carrying a balance and paying late and over-the-limit fees, over a 12-month period. Twice as many married millennials with dependents reported using costly, alternative forms of borrowing like pawn shops and payday lenders than married millennials without children.
As Ms. Rosemary Williams, DASD for Military Community & Family Policy, briefed at the July 2014 Financial Roundtable meeting, military millennials are also more likely than other millennials to live away from urban areas and, not surprisingly, own cars and carry auto loans.
Millennials also communicate differently. Especially in the United States, they are the first generation that did not have to adapt to the Internet and mobile technologies—instead, they were born with them.
The financial outlook is not all gloomy for Millennials though. Millennial respondents are nine percent more satisfied with their financial situation than the generation Xers that preceded them. That may be about managing their financial expectations.
Can we draw general conclusions about military millennials from this research? Here are some thoughts:
- Military millennials lived through more than a decade of war and deployments—and few have experienced peacetime in their careers.
- They experienced some traumatic events in their formative years: 9/11, the housing bubble and stock market collapse.
- They carry student loan and medical debt burdens that previous generations did not often have to bear.
Different experiences can lead to different behaviors. Millennials behave differently. Those organizations best positioned to meet their needs will understand the different challenges and opportunities Millennials face and adjust to new ways of working with them.