Military Millennials and Their Money Final Report · uncover new insights and trends related to...

Military Millennials and Their Money Final Report Member Research

Survey conducted by:

Property of Navy Federal Credit Union

Background, Objectives, & Methodology Executive Summary Detailed Findings Appendix

Military Millennials and Their Money: Background & Objectives Background The following report outlines findings from a recent financial outlook survey sponsored by NFCU and conducted by Forrester Consulting as part of the ongoing effort to understand Millennials and their financial needs and preferences. The research was conducted to validate similar surveys conducted in 2013 and 2014, and to uncover new insights and trends related to Millennials and their position on specific personal finance issues.

Objectives This survey was designed to explore whether Millennials feel, think, and demonstrate that they are on track to meet their financial goals over the next five years. The survey was split among General Population Millennials and Military Millennials (Active Duty + spouse / partner). Issues explored in the survey:

–  Financial Confidence, Satisfaction, & Literacy –  Financial Readiness & Goals –  Loyalty & Trust in Financial Institutions –  Security & Fraud –  Money Management & Budgeting

Methodology •  10-minute online survey •  Field date: October 2015 •  Sample size: 1,312 Millennials (ages 18-34) •  Respondents:

–  General Population Millennials: n=1,312 (unweighted sample) •  Note: the data is weighted by gender, age and income, weighted sample is 1,009

–  Military Millennials: n=333 (Active Duty + spouse / partners)

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Military Millennials and Their Money Executive Summary

Financial Goals and Preparedness ›  Military Millennials are the most confident, positive, prepared, and educated about their financial situation.

›  However, they are also the most likely to have: missed a payment on their credit card in the last year, used a payday loan in the last year, missed a mortgage payment in the past 2 years.

›  Millennials in general feel that the US economy will afford them the opportunity to meet their financial goals in the next 5 years; however, they are concerned about the future of the economy. ›  Paying down debt and building up savings continue to be major goals for Millennials.

›  Millennials are concerned about having enough money to retire comfortably but also say that they are on track and comfortable with their current financial plan for retirement.

›  While the majority of Millennials feel they don’t know enough about how to manage their finances, they don’t seek out professional or outside guidance as they prefer to do their own research and make their own financial decisions.

–  Military Millennials are more likely to seek out information and advice from multiple sources and are far more likely to trust digital financial advice.

Trust & Switching Behaviors ›  Military Millennials have the highest trust in financial institutions in general; however, they are also the most likely to switch

business away from their primary financial institution regardless of the circumstance.

Security and Fraud Concerns ›  While many Millennials worry about the security of their personal/financial information (51%), just as many indicate feeling

secure when using their financial information on their mobile device. –  Military Millennials show the highest comfort level with conducting a variety of digital financial activities even though

they have experienced ID theft / fraud at a higher rate. ›  Military Millennials have the highest awareness of Smart Chip (EMV) card benefits.

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Military Millennials and Their Money: Detailed Findings

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Satisfaction & Confidence in Financial Situation

5

Satisfied with Current Financial Situation

On Track to Meet 5 Year Goals

Will Save More in 2016 vs. 2015

Prepared for Financial Emergency

Gen Pop Millennials Military Millennials

Q: How satisfied are you with your current financial situation? Q: Thinking about the next five years, how confident are you that...You are currently on track to meet your financial goals in this timeframe? Q: Do you think you’ll save more in 2016 as compared to 2015? Q: If you were confronted with a personal disaster that impacted your finances, how well-prepared do you feel you are to confront it? Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

›  Military Millennials are the most satisfied and confident with their financial situation, their ability to save, and their preparedness for a personal financial emergency.

87%

89%

82%

77%

66%

78%

69%

60%


52%

44%

37%

37%

29%

28%

25%

11%

10%

6%

56%

54%

37%

47%

43%

39%

34%

21%

22%

16%

I have thought about what my financial goals are or what they should be

I have checked my credit score within the last year

I live paycheck to paycheck

I feel like I know enough about how to manage my finances to meet my financial goals

I have a household budget that I review at least annually

I have paid the minimum balance on my credit card(s) more than once in the past year

I have at least 3 months of pay saved up in an emergency fund

I have missed a credit card payment within the last year

I have used a payday loan within the last year

I have missed at least one mortgage payment in the past 2 years

Gen Pop Millennials

Military Millennials

Financial Attitudes & Literacy

Q: Which of the following, if any, describes you? Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

Slip Ups Along the Way ›  While Military Millennials have a positive financial outlook, they are also the most likely to have: missed a

payment on their credit card in the last year, used a payday loan in the last year, missed a mortgage payment in the past 2 years.

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Importance of Financial Goals in Next 5 Years ›  Military Millennials place the highest importance on setting financial goals over the next 5 years. ›  Military Millennials are most focused on paying down debt and building up savings.

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Financial Goals Over the Next 5 Years – Importance

Q: Thinking about your financial goals over the next five years, we'd like to know how important the following are for you. Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

62%

66%

55%

70%

42%

59%

42%

52%

36%

49%

29%

27%

24%

21%

34%

33%

29%

31%

32%

29%

Gen Pop Millennials


Gen Pop Millennials


Gen Pop Millennials


Gen Pop Millennials


Gen Pop Millennials


Very important Somewhat important

Building up a savings/emergency fund

Paying down debt

Saving for retirement

Purchasing a home

Purchasing an automobile

Importance (sum)

91% 93%

79% 91%

76% 92%

71% 83%

68% 78%



State of the Economy ›  While the majority of Millennials feel positive that economy will afford them the opportunity to meet their financial

goals, they also express concerns about the future of the economy.

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Q: Thinking about the next five years, how confident are you that... the U.S. economy will afford you the opportunity to meet your financial goals in this timeframe? Q: Please indicate how strongly you agree or disagree with the following statements. (Agree – 4 or 5 on scale of 1 to 5) Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

The economy will provide me the opportunity to meet my financial

goals in the next 5 years

I am concerned about the future of the economy

78% 68%

62% 64%

Military Millennials Gen Pop Millennials



Planning for Retirement ›  The majority of Millennials place high importance on saving for retirement over the next 5 years and most

believe they are on track to meet their goals in this timeframe.

›  However, they are concerned about having enough money to retire comfortably and are not fully comfortable with their financial plan for retirement.

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Q: Thinking about your financial goals over the next five years, we'd like to know how important the following are for you. Q: You indicated that the following are important to you over the next five years. Do you feel that you are on track financially with your goal to… Q: Please indicate how strongly you agree or disagree with the following statements. (Agree – 4 or 5 on scale of 1 to 5) Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.


Importance of saving for retirement

Concerned about having enough money to retire comfortably

59%

42%

92%

76%

Very Important / Somewhat Important

Comfortable with financial plan for retirement

On track with 5 year retirement savings goal

61%

40%

65%

60%

63%

55%



Financial Education ›  The majority of Millennials feel like they don’t know enough about how to manage their finances to meet their

financial goals. ›  Military Millennials feel more confident in their knowledge.

›  However, they prefer gathering information and doing research on their own to make decisions rather than rely on outside professional help.

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Q: Which of the following, if any, describes you? Q: Please indicate how strongly you agree or disagree with the following statements. (Agree – 4 or 5 on scale of 1 to 5) Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.


47%

37%

Financial Research & Decision Making

I feel like I know enough about how to manage my

finances to meet my financial goals

73%

70%

58%

57%

57%

56%

69%

64%

41%

41%

39%

38%

Like to do my own research before making financial decisions

Gather financial information and make decisions on my own

Rely on financial advice from professionals

Rely on financial education and advice from PFI

Always seek and rely heavily on expert advice before making

financial decisions

Trust digital finance advice



Trust in Financial Institutions ›  The majority of Military Millennials trust financial institutions, both the ones they work with personally and in

general.

›  While there is high trust in financial institutions, Military Millennials are likely to switch institutions regardless of the circumstance.

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Q: Overall, how much do you trust each of the following? (Trust – 4 or 5 on scale of 1 to 5) Q: How likely would you be to switch business from your primary financial institution based on the following? (Likely – 6 or 7 on scale of 1 to 7) Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.


52%

51%

56%

54%

51%

49%

43%

42%

42%

39%

39%

34%

Security breach

Better products and services

Reliability

Accuracy of information

Ease of doing business

Speed of service

Trust in Financial Institutions Will Likely Switch from PFI

Potential Triggers for Switching from PFI

PFI

Other Personal

FI’s

In General

80%

73%

62%

50%

62%

46%

44%

23%



Financial Security & Precautionary Measures ›  While half of Millennials are worried about the security of their personal/financial information, just as many feel

secure using their financial information on their mobile device.

›  Military Millennials show the highest concern and are the most likely to actively take precautions and secure measures to protect themselves.

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Q: Have you ever been a victim of… Q: Please indicate how strongly you agree or disagree with the following statements. (Agree – 4 or 5 on scale of 1 to 5) Q: How safe or unsafe do you feel the following activities are? (Safe – 4 or 5 on scale of 1 to 5) Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

Gen Pop Military Paying online using an online payment service 61% 62%

Making an online purchase using my credit / debit card 57% 59%

Giving an email to an online retailer 52% 56%

Signing up for an account on an online retailer's website 50% 56%

Connecting several smart devices to a home network 49% 63%

Storing a shipping and/or residential address on a website 48% 58%

Making payments using a Mobile Wallet 43% 54%

Applying for a credit card online 43% 56%

Made in-app purchases on a mobile game 42% 50%

Clicking "remember me" when logging into online account 38% 51%

Saving credit / debit card information online 34% 50%

Using a third-party app to track purchasing habits 32% 47%

67%

55%

57%

51%

76%

56%

65%

51%

I feel secure using my financial information on my mobile device

Safety of Digital Financial Activity

Experienced ID Theft / Fraud

Actively taking precautions to protect personal identity and financial information

Worried about the security of personal and financial information



Gen Pop Military

Represents new and innovative payment technology 69% 73%

Reduce the risk of card fraud by making it harder to counterfeit a card

68% 71%

Safe, secure way to prevent unauthorized use of my card 66% 73%

When used with a PIN, it would provide a secure way to verify my identity as the card owner

65% 74%

Easy to use 65% 70%

Would better protect me from identity theft or some other compromise of my card information

65% 75%

Would make me feel more secure in using the card in new places at which I've never used it before

62% 69%

Useful when I am traveling abroad 59% 70%

Reduce the likelihood that my card would be rejected by a store/merchant

51% 65%

Would encourage me to use my card more often 46% 64%

Q: Which of the following best describes your level of agreement with the following statements about smart chip (EMV) cards? (Agree – 4 or 5 on scale of 1 to 5) Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

EMV Card Perceptions ›  Military Millennials have the highest awareness of EMV benefits.

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Attitudes towards Smart Chip / EMV Cards


Military Millennials and Their Money: Appendix

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37%

58%

Parent (child under 18 in household)

49%

59%

Gender (% male)

63%

67%

Lives in one-family house

Military affiliation

Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

44%

65%

Married or living with partner

42%

58%

47%

53%

Under 25

25 to 34

Age

Average annual household income

$69,073 $82,698 Active Duty 2% 77%

Spouse/legal domestic partner is Active Duty 1% 33%

Respondent Demographics

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Military Millennials and Their Money Executive Summary

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TouchPoints GenPopMillennials MilitaryMillennials

KeyTakeaways 2013 2014 2015 2013 2014 2015

Sa8sfac8onwithCurrentFinancialSitua8on 61% 70% 66% 79% 80% 87% MilitaryMillennialscon9nuetobethemostsa9sfied

withtheircurrentfinancialsitua9on.

FiveYearGoals-SavingforRe8rement(Importance)

71% 79% 76% 95% 91% 92% MilitaryMillennialsplaceahigherimportanceonsavingforre9rementthanGenPopMillennials.

FiveYearGoals-PayingDownDebt(Importance) 83% 84% 79% 80% 84% 91% Payingdowndebtcon9nuestobeanimportant

financialgoalforallMillennials.

FiveYearGoals–PurchasingaHome(Importance) 69% 71% 64% 83% MilitaryMillennialsplacehigherimportanceon

purchasingahomeinthenext5years.

FiveYearGoalsOnTrack 74% 78% 78% 88% 89% 89% Millennialsoverallcon9nuetofeelconfidenttheyareontracktomeettheirfinancialgoals.

FinancialLiteracy(KnowEnoughtoMeetGoals) 46% 37% 37% 62% 58% 47%

FewerMilitaryMillennialssaytheyknowenoughtomeettheirfinancialgoalsthanyearsprevious.

However,theyares9llfeelingmoreknowledgeablethantheGenPop.

SavingsGoals(WillSaveMoreYoY) 52% 77% 69% 60% 75% 82%

SavingsgoalsseemlessaNainableforGenPopMillennialsthisyear.Conversely,MilitaryMillennialshaveamoreposi9veviewoftheirabilitytosave

moremoneynextyear.

PreparedforEmergencies 49% 65% 60% 73% 71% 77% MilitaryMillennialscon9nuetofeelthemoststronglythattheyarepreparedforafinancial

emergency.


59% 54%

51% 51%

40% 36%

31% 29%

14%

55% 53%

49%

41%

47%

37%

43%

30%

7%

Economy / fiscal issues

Healthcare Education Social issues War / terrorism Immigration Foreign affairs Race relations I don't plan on voting

Gen Pop Millennials Military

Importance of Issues in the Next Presidential Election

Q: Which of the following issues will be important when deciding your vote for president next year? Base: All respondents: 1,009 Gen Pop Millennials; 333 Military Millennials Source: A commissioned survey conducted by Forrester Consulting on behalf of Navy Federal Credit Union, October 2015.

Important Issues for the Presidential Election ›  The majority of Millennials will consider the economy, healthcare, and education when voting for president.

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Q: How confident are you that your bank or credit union will… (Confident – 4 or 5 on scale of 1 to 5) Base: 1,555 US Online Millennials (online at least weekly or more often, ages 18-34) Source: Forrester Research, North American Consumer Technographics® Financial Services Survey, 2015.

Confident that Credit Union or Bank will…

60%

56%

55%

Enable you to make better financial decisions on your own

Help you plan for your financial future

Guide you towards financial well being Millennials

Note: Data shown is from Forrester’s Consumer Technographics®

Confidence in Financial Institutions ›  In general, most Millennials are confident their bank or credit union will help them make sound financial

decisions.

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59%

57%

48%

When making online purchases, my personal financial information (e.g. credit card number) is very secure

My financial providers are committed to protecting my personal privacy and security

I am comfortable using digital channels to interact with my financial services providers Millennials

Agreement with…

Q: Please indicate how strongly you agree or disagree with the following statements. (Agree – 4 or 5 on scale of 1 to 5) Q: How confident are you that your bank or credit union will… (Confident – 4 or 5 on scale of 1 to 5) Base: 1,555 US Online Millennials (online at least weekly or more often, ages 18-34) Source: Forrester Research, North American Consumer Technographics® Financial Services Survey, 2015.

Confidence in Credit Union or Bank to…

69%

67%

Keep your financial information private

Keep your financial information secure

Millennials

Note: Data shown is from Forrester’s Consumer Technographics®

Confidence & Security with Financial Institutions ›  In general, over half of Millennials agree that their financial providers are committed to protecting them.

Additionally, most Millennials are confident their financial information is kept private and secure.

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