FORT WORTH, Texas--(BUSINESS WIRE)--Anxiety over the nation’s budget battles is dampening the holiday spending plans of career servicemembers and their families, according to the First Command Financial Behaviors Index®.
The latest survey results reveal 52 percent of middle-class military families (those in pay grades E-6 and above with household incomes of $50,000 or more) expect to spend less on gifts this year, making it their No. 1 cost-cutting strategy for the holidays. These frugal shoppers plan on average expenditures of $769, almost half the $1,439 they estimate having spent last year on holiday gifts. And 39 percent say they plan to spend under $500.
Military families who are feeling anxious about the possibility of another government shutdown, sequestration and furloughs in 2014 are especially likely to cut back this holiday shopping season. The Index reveals that plans to spend less on gifts are significantly associated with concerns over:
- Another government shutdown (Cited by 59 percent of those who feel anxious versus 36 percent who do not)
- Sequestration in 2014 (63 percent versus 35 percent)
- Additional furloughs of federal workers in 2014 (63 percent versus 32 percent)
“Prospects for a frugal holiday season are emerging at a time when the nation’s budget battles are playing out in the lives of our men and women in uniform,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Servicemembers rightly recognize the looming threat to their careers and families, and they are taking action now to shore up their household finances for the new year.”
Military families plan to pursue a variety of frugal holiday strategies this year. In addition to spending less on gifts, they will be:
- Giving gifts to fewer people. This approach is identified by 46 percent of respondents, up 11 points from 2012 and 18 points from 2011.
- Giving fewer gifts per person (40 percent)
- Setting a maximum amount for gifts (37 percent)
- Staying closer to home / reducing travel (36 percent). Notably, half of this group (51 percent) say they will be staying at home this year – up 12 points from 2012.
- Spending less on decorations (27 percent)
- Buying gifts from discount stores (25 percent)
This holiday season marks the sixth consecutive year that the Index has pointed to leaner spending in military families, continuing a larger trend toward frugal living.
“Today’s military families recognize the potential impact of defense downsizing on their financial futures,” Spiker said. “They are responding with a sustained focus on the frugal strategies they perfected during the continuing economic turmoil of the past several years. By spending less, cutting debt and saving more this holiday season, they give themselves the gift of positive, time-tested strategies in all aspects of their financial lives.”
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.