Servicemembers Save Their Way to an Optimistic Finish for 2013, First Command Reports
Year-end results of the First Command Financial Behaviors Index® reveal military families are saving more and feeling better financially than other middle-class Americans
FORT WORTH, Texas--(BUSINESS WIRE)--Anxious over sequestration, a government shutdown and job security, America’s career military took a proactive approach to their finances in 2013 that helped them feel more secure and optimistic than their civilian counterparts.
“Fears of sequestration and government shutdowns are likely serving to reinforce the value of saving more and cutting debt. By remaining focused on these positive behaviors, middle-class military families are preparing themselves both financially and emotionally for an uncertain future.”
The year-end findings of the First Command Financial Behaviors Index® reveal 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 out-saving the general population and feeling more sanguine on a variety of key measures. During the fourth quarter, they were more likely 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,” 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 by putting money away for the future. And it is this proactive approach to personal finance that is the most likely source of the increased confidence in the future. Our research has consistently found that families get an emotional lift from the act of savings. Even families with credit card or other short-term debt can feel optimistic and financially secure as long as they are disciplined in their approach to savings and paying down debt.”
The year-end Index report reveals that military families put considerably more dollars towards short-term savings than general population households with similar incomes. The average monthly amount military households indicated that they put into short-term savings in 2013 exceeded that of the general population by more than $500. Military families also reported putting more money into debt reduction. The average monthly amount they paid on short-term debt exceeded that of the general population by almost $280.
The Index closed out 2013 with a score of 118 for military families. That represents a gain of 17 points from the first quarter; it was the third consecutive increase and the highest quarterly finish in more than a year. For the general population, the Index score fluctuated throughout 2013 to end the year at 95, up nine points from the first quarter. The Index is set to a benchmark of 100.
Looking ahead, military families appear more likely than members of the general population to continue to pursue positive financial behaviors. For military families, the sub-Index for financial intentions jumped 11 points in the fourth quarter. For the general population, the intentions sub-Index slipped 11 points to its lowest level of the year.
“Despite continued political and economic challenges, the optimism and perseverance of our career military is holding strong,” Spiker said. “Fears of sequestration and government shutdowns are likely serving to reinforce the value of saving more and cutting debt. By remaining focused on these positive behaviors, middle-class military families are preparing themselves both financially and emotionally for an uncertain future.”
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.