VIENNA, Va. -- Navy Federal Credit Union wants to extend financial education and promote financial literacy to a very specific demographic: military millennials – current and former U.S. military service members born roughly between 1981 and 1997.
An estimated 40% of Navy FCU's six million members are millennials and represent the largest segment of the $75 billion-asset credit union's membership base.
An online survey by Forrester Consulting entitled "Military Millennials and Their Money" found that this part of the millennial generation believes they are "on track" to meet their five-year financial goals. At the same time, they also want to become more familiar with financial literacy. (The survey questioned more than 1,300 members of the military between the ages of 18 and 34 in October 2015.)
The survey also found that: 73% of military millennials prefer to do their own research before making financial decisions; 58% depend on financial professionals for advice; and 56% trust digital sources for finance advice.
"Military millennials rely on digital resources and are more trusting of the information they get online, especially from their preferred financial institution," said Meghan Gound, AVP of digital communications at Navy FCU. "That's why we've launched a new website called MakingCents, aimed at helping young borrowers easily learn and make decisions about spending, saving, and of course borrowing smartly."
MakingCents, which is available to both Navy FCU members and non-members, guides users through the steps required to perform various important financial tasks, like purchasing a car, buying a home, or opening a new credit card.
But the survey also uncovered some of the financial missteps of military millennials and the challenges they face: 21% have missed a credit card payment in the past year, and 16% have missed at least one mortgage payment in the last two years.
"The bottom line as it pertains to education is the majority of millennials feel like they don't know enough about how to manage their finances to meet their financial goals," said Marcia Sanford, VP of member research, intelligence and development at Navy FCU. "Their optimism for the future and eagerness for education create an opportunity for Navy Federal to make a really positive impact on the financial lives of millions of young military families."
The survey asked these millennials how they feel about the U.S. economy and their own financial futures. Navy FCU said that, in general, they "feel that the US economy will afford them the opportunity to meet their financial goals in the next five years; however, they are concerned about the future of the economy."
They are also very focused on paying down debt, building up savings, and having enough money to retire comfortably.
In a webinar presentation, Alan MacEachin, corporate economist at Navy FCU, explained what made the millennials – and especially those in the military – so interesting and unusual. MacEachin noted that millennials tend to behave more like their grandparents (otherwise known as the 'greatest generation' who grew up during the Depression and fought World War II), rather than their parents (the Baby Boomers who grew up in the more prosperous 1960s and 1970s).
"During their formative years, both the millennials and the greatest generation lived through a terrible economic catastrophe – the Depression of the 1930s and the Great Recession of the late 2000s," he said. "Plus, their youths were marked by a foreign attack on the U.S. soil – the Pearl Harbor attack by the Japanese, leading to war, for the greatest generation; and the terror attacks at the World Trade Center and Pentagon in 2001 for the Millennials."
MacEachin also noted that these two apparently disparate generations – separated by 70 to 80 years – also witnessed other catastrophic economic events, including the collapse of iconic financial institutions and corporations and extremely high unemployment rates, among other things.
"Having lived through these traumas during their formative years, millennials behave very much like their grandparents and great-grandparents – they are cautious, wish to build up their savings and pay down their debts," he said.
Millennials are also aware they are facing some other painful economic realities that their parents did not– most will not have pensions and many are not confident that Social Security and Medicare will provide for them when they are seniors.
"They know that the idea of a safety net is precarious," MacEachin noted. "They have also seen the value of stocks and the value of homes can decline. This makes financial literacy of paramount importance to them."
Marcia Sanford, VP-member research, intelligence and development at Navy FCU, further pointed out that millennials who serve in the military have more urgent financial needs than those who are outside the armed forces.
"Millennials in the military are primarily male, they tend to marry earlier and have children at a younger age," she said. "They also purchase homes before the general population of millennials – all of this means that they are moving into the financial marketplace earlier and quicker than their peers."
Still, generally speaking, military millennials are more satisfied with their current financial condition than other millennials are and they also put greater emphasis on saving for retirement, reducing their debt and seeking to buy a first home.
Looking ahead, millennials (in the military or otherwise) will continue to dominate this country's society and dictate its economic and social policies. Last summer, the US Census reported that millennials numbered some 83.1 million people, or more than one-fourth of the nation's population. By that point, their total size already exceeded that of the 75.4 million people characterized as baby boomers.
