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.  


Though the United States is one of the most affluent nations in the world, the financial well-being of individual citizens remains a concern, as significant numbers of Americans live below the poverty line or experience financial distress.  Periods of financial insecurity over the course of an individual’s life are unintended.  Seemingly innocuous choices made every day can result in changes in an individual’s financial wellbeing.  For example, purchasing lottery tickets can result in a financial windfall; but can also act as a slow financial drain.  Personal choices made at pivotal transition points in an individual’s life course are more likely to have lasting financial repercussions than choices made at other times.  One such transition point occurs upon the completion of high school.  At this point, many Americans choose to obtain a college degree and accept that to do so they will assume extensive financial debt.  In addition, individuals frequently accept a lower income level while in college with the expectation that their post-graduation income will compensate for the lost income and incurred college debts.  As an alternative, individuals transitioning out of high school may choose to join the military.  Military recruiting efforts, as well as the popular press, have helped to construct a perception of the military as a “good job.”  Hence, military service is often not associated with either accruing debt or accepting a lower level of financial well-being.  

Reflecting on the effect of military service on an individual’s financial well-being from a life course perspective can facilitate our understanding of this complex issue.  The life course perspective takes into account multiple factors that can affect financial wellbeing, including timing within the life course, implications for embedded relationships, and human agency.  Historically, the military has proven to be a good place to start because of the skills and benefits derived from military service, and military service has acted as a “bridge” for some from a lower socioeconomic status to a higher one, especially for men from racial/ethnic minority groups (Browning, Lopreato, and Poston 1973; Gade, Lakhani, and Kimmel 1991).  However, the historical context in which military service occurs has an impact on its usefulness as a means for attaining a higher socioeconomic status.  Much of the work on the bridging effect of military service was conducted on World War II or Vietnam era service members.  

Expectations regarding the benefits of military service may be exaggerated in the popular conception because of previous research on the economic success of World War II era service members.  More recent work indicates that military service has detrimental effects on the socioeconomic well-being of women who serve (Cooney 1997).  The expansion of higher education has made college a better investment of time than military service.  However, about half of military retirees indicated in a 2003 survey that they were doing better economically as compared with others their age who did not have a military career, although a third thought they were about the same economically (DMDC 2004).  The socioeconomic situation of military members may be affected by the employment status of their wives with whom they have linked lives.  Booth, Falk, Segal, and Segal (2000) found that civilian women, including wives of military members, living near military bases experienced depressed wages and higher unemployment.  About a third of military retirees indicated that their active duty service was a hindrance to their spouse’s career (DMDC 2004).

Individuals transitioning into the military may choose this life course because previous generations have demonstrated that military service can be a successful means for Americans to expand their opportunities and to attain or maintain an acceptable standard of living.  Although the military may still act as a bridge for young adults, historical changes in the United States and in the military may mean that military service is a less successful channel for reaching a higher socioeconomic status.  An example of the disparity between the idea of the military as a means to attain higher financial wellbeing and the current experiences of service members are the financial problems faced by some service members and their families.  Military families are eligible for food stamps, a domestic food and nutrition assistance program administered by the U.S. Department of Agriculture's Food and Nutrition Service (FNS) (Thompson, 2000).  Military pay is intended to be sufficient to meet the basic needs of all service members—this is a fundamental premise of the All Volunteer Force.  Military members who are eligible for the food stamp program challenge the feasibility of the military as a life course bridge.  As military members defend the United States, it is not unreasonable to expect that the government will ensure that the standard of living of military members and their families is equitable compared to the society that members defend.  If a significant portion of the military population is in financial distress, it is imperative to identify that segment of the population in order to develop initiatives directed towards raising their standard of living.