FORT WORTH, Texas--(EON: Enhanced Online News)--Continuing anxiety over sequestration is prompting servicemembers and their families to improve their household finances in preparation for an uncertain financial future.
“In this period of fiscal uncertainty, a high level of preparedness is critical to achieving both near- and long-term goals in the pursuit of financial security.”
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) put away an average of $2,926 per month into savings and retirement accounts during the second quarter, up 12 percent from the previous quarter. And they increased repayment of short-term debt to an average of $1,124 per month, up 4 percent from the previous quarter. These positive changes in financial behaviors helped push the Index ahead 12 points to a quarterly score of 113.
Servicemembers are finding new dollars to commit to savings and debt reduction through various belt-tightening behaviors. The Index reveals that 52 percent of military families increased their efforts to cut back on every day spending during the second quarter, up 10 points from the previous quarter.
This increased focus on spending less, saving more, and cutting debt comes at a time when many military families are expressing concerns over how the sequester cuts might affect their financial futures. In the April Index survey, three out of five military families indicated they were feeling anxious about sequestration.
Notably, these frugal behaviors are strongest among military families working with a financial planner. In the second quarter, those with a financial planner added an average of $3,740 per month in savings. In contrast, those without a planner saved an average of $2,270 per month.
Most servicemembers do not foresee a change in their savings or debt repayment behaviors in coming months regardless of whether or not they have a financial planner. This suggests those with a financial planner will continue to pursue these frugal behaviors more strongly than those without a financial planner.
“These findings underscore the value of working with a trusted financial professional,” said Scott Spiker, CEO of First Command Financial Services, Inc. “In this period of fiscal uncertainty, a high level of preparedness is critical to achieving both near- and long-term goals in the pursuit of financial security.”
About the 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. www.firstcommand.com/research
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.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc., in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Educational Foundation is a 501(c)(3) public charity. It is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.