Perceived Financial Conditions - Part I

Bottom Line: I'm writing a master's thesis on perceived financial conditions. Research is specific to military service members. However, some results can be generalized to others.

Sample analyzed includes personnel ranging in age between 18 and 50 yrs. Sample restricted to enlisted personnel. On average, 19.64% perceived their condition as being in one of the worst two tiers.

Perceived financial conditions are broken up between: 1) In over head, 2) Tough to make ends meet, 3) Occassional Difficulties, 4) Makes ends meet w/o much difficulty, 5) comfortable and secure

1. Salary does not necessarily matter much once household gross income grows above a range defined by $4,000 to $5,000*. I believe this is due to spending habits being more important as household salary increases.
2. Keeping your total unsecured debt below $5k would reduce your likelihood of being in worst two tiers by 20 percent.
3. Ignorence is bliss? Actually teenagers (18.8 percent less likely) just edge out people forty and over (13.9 percent less likely) as least likely to perceive their financial situation as being in one of the worst two tiers.
4. If your spouse has an Associates Degree: 28.9 percent less likelihood of being in worst two tiers. Effect of higher levels of education had diminishing returns for my sample.
5. Having $5k - $10k* in savings reduced likelihood of being in worst two tiers by 75 percent.
6. IF YOU KNOW SOMEBODY JOINING THE MILITARY: Personnel reporting that they are not satisified with their occupation received at enlistment were 51.2 percent more likely to fall in worst two categories. Personnel happy with occupation received were 20.2 percent less likely to be in worst two tiers. Lesson here, make sure the person enlisting has a mentor or some other person helping him/her understand the occupation they are taking.

* These dollar amounts are based on 1999 data, can be roughly adjusted for inflation by multiplying by 1.13.

More info to follow as thesis chapters get approved. Turned in two chapters, three more to go!