First Command Reports: Military families using tax refunds to shore up finances
May 22, 2018
FORT WORTH, Texas – Career military families are taking a careful approach to tax refunds again this year by committing their dollars to cutting debt, bumping up savings and paying bills.
First Command's seventh annual survey on tax refunds reveals that the majority of middle-class military families (commissioned officers and NCOs in pay grades E-5 and above with household incomes of at least $50,000) who have received or expect to receive a tax refund plan to spend it on shoring up their household finances. Key strategies include:
- Paying down debt (39 percent)
- Bumping up general savings (32 percent)
- Paying monthly bills (24 percent)
- Building an emergency fund (24 percent). This particular strategy is growing in popularity, up seven points from last year to reach the highest level in the seven-year history of the survey.
This focus on frugality continues a long-term trend in which the majority of military families report plans to commit their refunds to fortifying household finances.
“Career service member families are spending their tax refund dollars on strategies that help them deal with the near-term uncertainties of military life,” said Scott Spiker, chairman/CEO of First Command Financial Services, Inc. “Even with the end of sequestration earlier this year, career worries continue to be an issue. Almost half of military families still feel concerned about their job security in the months ahead. Cutting debt and growing savings are obvious lines of attack for dealing with feelings of uncertainty and pursuing financial security.”
Notably, monthly financial concerns are less pronounced among military families who work with a financial advisor. They are significantly more likely than their do-it-yourself counterparts to dedicate tax refund dollars to:
- Investments (25 percent versus 6 percent)
- Vacations (23 percent versus 9 percent)
- Home improvements (23 percent versus 3 percent)
“Military families who work with a financial coach are already focused on careful money management, so they are moving beyond monthly concerns to address long-term needs and perhaps celebrate with a few discretionary purchases,” Spiker said. “Through ongoing relationships with knowledgeable financial advisors, military families develop sound money behaviors that help them feel better about today and financially squared away for tomorrow.”
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.
Contact: Mark Leach
Media Relations
817‐569‐2419
msleach@firstcommand.com
www.firstcommand.com