First Command News & Events
FOR IMMEDIATE RELEASE - October 14, 2013
Military Families Respond to Economic Concerns Through Frugal Living, First Command Reports
FORT WORTH, Texas — Concern about the state of the economy is on the rise in military households – and servicemembers and their families are responding by exercising greater control over their personal finances.
The latest survey findings from the First Command Financial Behaviors Index® reveal that 59 percent of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) list the state of the economy as one of the financial issues concerning them the most. This result represents a significant increase from the first half of the year, when economic worries appeared to be on the decline. Concerns for the state of the economy fell to a record low of 49 percent in May.
“This uptick in economic anxiety among men and women in uniform comes at a time of related apprehension over sequestration and military budget cuts,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Roughly three out of five military families feel at least somewhat anxious about sequestration. About two thirds of military families report that they have been impacted by government employee furloughs and spending cuts. In contrast, the civilian families in our survey do not report the same level of impact or concern. Military families recognize they are more likely than other Americans to be adversely affected by sequester cuts and defense downsizing, and they are understandably concerned about the impact to their careers and financial lives.”
Many servicemembers and their families are responding to these concerns through frugal living. Four-in-ten survey respondents indicate that they are cutting back on spending as a result of sequestration, and one-quarter say they are increasing savings.
Notably, these behaviors may be helping active-duty households overcome their worries about the state of the economy and feel more optimistic about their own financial futures. The Index reveals that:
- 43 percent are extremely or very confident that their financial situation will improve next year (up seven percentage points from January),
- 45 percent feel extremely or very financially secure month to month (up six points) and
- 42 percent are confident in their ability to retire comfortably (up 11 points).
Financial planners are also having a positive impact on feelings of financial security and confidence. Military families who have a financial planner are more likely than others to feel extremely or very confident that their financial situation will improve next year (53 percent versus 36 percent). And those who work with a planner are also more likely to feel extremely or very confident in their ability to retire comfortably (58 percent versus 33 percent).
“Financial planners coach their clients to spend less, save more and adopt other positive behaviors that are critical to achieving both near- and long-term goals in the pursuit of financial security and feeling more confident about the future,” Spiker said. “Looking ahead, we expect a growing number of military families to seek out the assistance of a trusted financial professional as part of their preparations 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.