Despite ongoing worries over military budget cuts and an uncertain economy, many members of America’s career military feel their personal financial situation has improved over the past year – and they plan to move boldly ahead with a continuing focus on frugal living in 2014, according to a new survey.
The First Command Financial Behaviors Index® reveals that 40 percent middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) feel they are better off than they were a year ago. Another 36 percent say their personal financial situation is about the same. Just one in five (21 percent) say they are worse off.
“Anxious about the effects of defense downsizing and the economy on their household finances, servicemembers and their families have been responding in 2013 with a determined focus on the types of positive behaviors that generate positive results,” said Scott Spiker, CEO of First Command. “They have been spending less and cutting debt, freeing up new dollars to help push their monthly savings rates to record highs. These meaningful results are helping military families feel better about their finances, and they appear to be inspiring them to recommit to frugal living for the new year.”
When military families were asked about their financial aspirations for 2014, 86 percent identified at least one positive strategy or activity they expect to pursue. The top New Year’s resolutions from military families are:
- Cut back on excessive spending (42 percent)
- Get out of debt (38 percent)
- Start saving money for retirement or put more money into retirement savings (36 percent)
- Keep track of financial activities (26 percent)
- Tie: Learn not to live beyond your means and improve credit score (25 percent each)
- Use cash or debit more often instead of credit cards (22 percent)
- Tie: Learn to budget responsibly and be financially independent (20 percent each)
- Make sound investments in the stock market (18 percent)
- Tie: Shop more at discount stores or for discount brands and buy a house (16 percent each)
- Increase charitable giving (14 percent)
These resolutions come at a time of notable optimism about the future. The Index reveals that 85 percent of military families are confident that their financial situation will improve in the new year. Many survey respondents also indicate that they feel confident in their ability to retire comfortably (81 percent).
Financial planners are having a decidedly positive impact on feelings of financial security and confidence in the future. The Index reveals that 51 percent of active-duty families who have a financial planner feel extremely or very confident in their ability to retire comfortably. That compares to just 30 percent who do not have a financial planner.
“As we look back on another year of financial uncertainty for military families, men and women in uniform are confident in the future and are taking positive steps to get squared away in their finances,” Spiker said. “Families who work with a financial coach are more likely to spend less, save more and pay down debt in their pursuit of financial security. We expect to see a growing number of active-duty households put their trust in knowledgeable financial professionals in 2014.”
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.