First Command News & Events
FOR IMMEDIATE RELEASE - December 5, 2013
Servicemembers Ratchet Up Savings Rate In Face Of Uncertain Financial Future, First Command Reports
First Command Financial Behaviors Index® reveals that short-term savings has reached a record high in military families
FORT WORTH, Texas — A savings surge is underway in America’s career military, where ongoing worries over the economy and defense downsizing are bringing positive changes to the ways servicemembers and their families manage their money.
The First Command Financial Behaviors Index® reveals that short-term savings hit a new high point in the third quarter for middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000). Their average monthly savings rate reached $1,535, up 12 percent from the previous high that was set in the third quarter of 2012. Retirement and long-term savings are also near record highs, averaging $1,587 and $1,050, respectively. These and other positive financial behaviors helped push the quarterly Index score ahead 4 points to a year-to-date high of 117.
This savings acceleration is the latest indication of a positive, longer-term trend toward frugal finances in military families. During the past two years, the Index reveals average quarterly growth of 18 percent for long-term savings, 8 percent for short-term savings and 6 percent for retirement investments.
“We are seeing a meaningful change in the financial behaviors of our men and women in uniform,” said Scott Spiker, CEO of First Command Financial Services, Inc. “While military families have spent the past several years responding to economic concerns through a determined focus on savings and debt reduction, they are now intensifying their battle-tested frugality as a rejoinder to sequestration, defense downsizing and the recent government shutdown. They are scrubbing their household budgets, reducing consumer spending and pursuing other belt-tightening behaviors that allow them to put aside additional dollars as a hedge against the uncertain future that is facing those who have made a career of the armed forces.”
The savings surge is strongest among military families working with a financial planner. In the third quarter, those with a financial planner added an average of $3,866 per month in savings. In contrast, those without a planner saved less than half that amount – just $1,703 per month. Servicemembers who are working with a financial planner also put away more money for retirement than those without a planner ($2,069 versus $1,262).
“These findings emphasize the positive results that can be realized when consumers focus on making substantive changes to their family finances,” Spiker said. “Military families continue to encounter significant financial and career challenges, but are resolute in their proactive stance. Working with a trusted financial advisor can be an ideal way to realize new ways to instill discipline in your money habits and pursue long-term financial security. Our research and experience serving those who serve tell us that those who work with a financial professional are in the best position to weather the storm which is reflected in their behaviors as well as their overall feelings of financial security and confidence.”
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.