First Command News & Events

FOR IMMEDIATE RELEASE - April 30, 2013

Military Families Deploying Tax Refunds To Cut Debt And Grow Savings, First Command Reports

First Command Financial Behaviors Index® reveals top tax refund spending plans for 2013

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FORT WORTH, Texas — Facing the continuing fiscal uncertainties of defense downsizing, the majority of middle-class military families with a tax refund in their future are planning to spend it on shoring up their family finances.

Recent survey findings from the First Command Financial Behaviors Index® reveal that about two thirds 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) who have received or expect to receive a tax refund plan to use it to save more and cut debt. In contrast, one in four plan to spend their refunds on home improvements, vacationsand other consumer pursuits.

“Again this year, our annual survey on tax refunds reveals that the majority of middle-income military families are focused on frugal living,” said Scott Spiker, CEO of First Command Financial Services, Inc. “They are embracing prudence and self-reliance as a way of life. This is a particularly important trend today when so many of our servicemembers and their families are facing the financial uncertainties of defensedownsizing. Our survey reveals that almost half of respondentshave been preparing for sequestration budget cuts by cutting back on everyday spending.Even the recent increase in the Social Security tax rate has prompted many consumers to cut back. Clearly military families are taking positive steps to get their financial lives squared away.”

The top tax refund spending plans among middle-class military families for 2013 are:

  • Pay down debt (47 percent)
  • Put into general savings (31 percent)
  • Pay monthly bills (16 percent)
  • Build up an emergency fund (16 percent)
  • Home improvements (14 percent)
  • Vacation (13 percent)
  • Put toward an investment account (11 percent)
  • Prepay major bills or expenses (8 percent)
  • Consumer purchases (6 percent)
  • Dining out (3 percent)
  • Apply to future taxes (3 percent)
  • Contribute to or open a college savings fund (2 percent)

Notably, the Index reveals different focuses among servicemembers with and without a financial plan provided by a financial advisor. Middle-class military families with a financial plan are significantly less likely to spend their tax refunds on paying down debtthan those without a financial plan (35 percent versus 56 percent). And they are more likely to commit their refunds to optional expenditures, such as home improvements (23 percent versus 8 percent).

“These results suggest that military families with a financial plan already have sound savings and debt management behaviors, allowing them to more comfortably commit their tax refunds to discretionary goals and aspirations,” Spiker said. “The key to enjoying this level of financial confidence and security is the coaching relationship offered by the financial advisor who provides the plan. Through this ongoing relationship, our men and women in uniformand their families are developing the behavioral discipline to commit to important financial goals and dreams.”

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.

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.

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