First Command News & Events
FOR IMMEDIATE RELEASE - February 27, 2014
First Command Identifies Top Financial Strategies Of Servicemembers For Military Saves Week
The First Command Financial Behaviors Index® reveal military families are saving more and feeling better financially than other middle-class Americans.
FORT WORTH, Texas — Following months of anxiety and concerns over sequestration and defense downsizing, America’s career military are participating in this year’s Military Saves Week (Feb. 24 - March 1) with a set of proactive financial strategies that have been helping them to out-save other middle-class Americans and feel more secure and optimistic about the future.
The First Command Financial Behaviors Index® reveals that middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) are putting considerably more dollars towards short-term savings than general population households with similar incomes. For 2013, the average monthly amount military households put into short-term savings exceeded that of the general population by more than $500 – a clear indication that many servicemembers and their families are committed to the Military Saves Week campaign goal to strengthen the monthly savings habits in active-duty households.
“Setting goals and making plans are key themes for Military Saves Week, and we see the value of those behaviors reflected in the savings habits of middle-income servicemembers and their families,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Throughout 2013, both military and general population families felt the impacts of sequestration. But servicemembers were considerably more likely to respond with proactive financial strategies that help them put money away for the future.”
What strategies are military families using to shore up their finances in the face of sequestration? When asked how they are preparing for sequester cuts, survey respondents indicated they are:
- Cutting back on everyday spending (49 percent)
- Increasing the amount they are saving (36 percent)
- Decreasing the aggressiveness of their investments (14 percent)
- Moving investments to cash (11 percent)
- Starting to work with a financial advisor (10 percent)
Notably, military families who work with a financial advisor are putting almost twice as much money into short-term savings as those who don’t work with an advisor. During the fourth quarter, their average monthly rate totaled $1,228. In contrast, those without an advisor averaged just $683.
The impact of working with a financial advisor is particularly evident in long-term savings behaviors. Military families who work with a financial advisor indicated that they put an average of $1,133 per month into long-term savings. That’s about four times the $278 per month socked away by those who don’t work with an advisor. And the average monthly retirement savings rate is $1,657 for those with an advisor versus $1,055 for those without.
“Financial advisors are helping their military clients save an average of $2,000 more per month than other servicemembers,” Spiker said. “One of the fundamental ways a trusted financial professional can help boost savings is by coaching their clients to set goals and make plans that are built on a pay-yourself-first strategy of automatic savings. At a time when so many military families feel anxious about the future, it is worth noting that those who save more feel greater financial security and confidence than their civilian counterparts.”
During the fourth quarter, military families were more likely than other middle-class Americans to report feeling:
- Financially secure (43 percent of military respondents versus 34 percent of civilians)
- Optimistic (45 percent versus 29 percent)
- Confident in their ability to retire comfortably (38 percent versus 33 percent)
“The heightened optimism we see among our men and women in uniform remained consistent throughout 2013, which is particularly noteworthy in a year marked by numerous current and proposed cuts to government spending,” Spiker said. “Even when families feel anxious about military budget cuts and their own career security, they can get an emotional lift from the act of savings. Fears of sequestration and government shutdowns are likely serving to reinforce the value of saving and other proactive money behaviors. By remaining focused on these positive actions, middle-class military families are preparing themselves both financially and emotionally for an uncertain future.”
About First Command Financial Behaviors Index®
Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. Financial Behaviors Index
About Sentient Decision Science, Inc.
Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.
About First Command
First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.