First Command News & Events
FOR IMMEDIATE RELEASE - November 6, 2013
Military Families Feel Nation’s Budget Strain, First Command Reports
FORT WORTH, Texas — As Americans face continuing economic uncertainties, servicemembers and their families are also increasingly feeling the negative effects of sequester cuts and government employee furloughs.
The latest survey results from the First Command Financial Behaviors Index® reveal a growing number 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)are experiencing the impact of defense downsizing in their financial lives.
When September survey respondents were asked to identify ways that sequestration is impacting their households, “a reduction in personal expense benefits (housing, clothing, food)” was selected by 29 percent, up seven points from the previous month. And “less likely to be promoted”was picked by 28 percent, up nine points.
Other impacts of sequestration reported by servicemembers and their families include:
- Decrease in discretionary income for non-essentials (30 percent)
- Reduction in retirement benefits (21 percent)
- Reduction in education benefits (19 percent)
- Increased responsibility for healthcare costs (18 percent)
- More likely to experience early separation / not serve to full retirement (15 percent)
- BRAC (Base Realignment and Closure Commission) will force relocation (8 percent)
Government employee furloughs are also affecting the lives of military families. Survey respondents say they have been impacted by:
- Reduced operating schedules at commissaries and exchanges (41 percent)
- Hiring freezes (28 percent)
- Congestion at access gates to military installations (25 percent)
Faced by these fiscal stresses and uncertainties, military families are increasingly worried about their professional and financial futures.
The September survey results reveal that 35 percent of respondents are concerned about job security in the coming months, up nine points from the previous month. In contrast, just 25 percent of general population families reported the same level of concern.
Active-duty households are growing less optimistic about their own financial futures. September survey results reveal that 37 percent feel extremely or very financially secure month to month, downeight points from August. And 36 percent are confident in their ability to retire comfortably, down six points.
“Military budget cuts and defense downsizing is clearly taking a toll on the lives of our men and women in uniform,” said Scott Spiker, CEO of First Command Financial Services. “Over six-in-ten military families are experiencing anxiety about sequestration, and confidence is waning. One of the consistent bright spots in our monthly surveys has been the finding that financial planners are having a positive impact on feelings of financial security and confidence. They are coaching their clients to spend less, save more and adopt other positive behaviors that can play a key role in the pursuit of financial security in troubled and uncertain times.”
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.