First Command News & Media
FOR IMMEDIATE RELEASE — Dec. 13, 2016
First Command Reports: Career military families focus on positive financial habits
The First Command Financial Behaviors Index® reveals that four out of five military families who work with a financial advisor contributed to savings during the third quarter
FORT WORTH, Texas – Career service member families who work with a financial advisor are wrapping up 2016 with a heightened focus on saving more and spending less than their do-it-yourself colleagues – and experiencing greater feelings of financial confidence in the process.
The latest results of the First Command Financial Behaviors Index® reveal that 81 percent of middle-class military families (commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000) who work with a financial advisor contributed to some form of savings during the third quarter. That compares to 66 percent of those who do not use an advisor.
Service members who work with a financial advisor were more likely to contribute to:
- Short-term savings (79 percent versus 58 percent for those without an advisor). Monthly median contributions for the two groups were $436 and $200, respectively.
- Long-term savings (70 percent versus 32 percent). Monthly median contributions for the two groups were $400 and $200.
- Retirement (79 percent versus 60 percent). Monthly median contributions for the two groups were $500 and $300.
Those with a financial advisor reported $14,000 more in accumulated savings and retirement funds than their do-it-yourself colleagues.
Regarding consumer spending, service members who work with a financial advisor paid down short-term debt at about the same rate as those without an advisor (76 percent). But they were more likely to pay down long-term debt (72 percent versus 63 percent), and they carried nearly $65,000 less in debt on average.
The savings and debt reduction efforts of military families who work with a financial advisor helped push the overall Index score for the third quarter to 137 – a year-to-date high. (The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.)
Look for the savings and debt reduction trend to continue in the months ahead. The Index reveals that 43 percent of military families who work with a financial advisor say they plan to increase their savings in the future. Thirty percent expect to increase debt payments. In contrast, roughly one in four of those who do not work with a financial advisor say they intend to take these actions.
“Our research findings continue to reveal that career military families are focused on building positive money habits, and this focus is strongest among people who work with a financial advisor,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Perhaps most notably, positive money habits help families feel better about their finances. Roughly two thirds of families with an advisor feel extremely or very confident that their financial situation will improve in the next year and in their ability to retire comfortably. This high level of confidence underscores the positive influence of financial advisors as they coach service members to improve their money behaviors and prepare for the future.”
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.