First Command News & Media
FOR IMMEDIATE RELEASE — Nov. 20, 2014
Sequestration Driving Servicemembers to Save More and Spend Less, First Command Reports
FORT WORTH, Texas — Members of America’s career military are increasingly responding to defense budget cuts by intensifying their frugal financial habits, with almost half now focused on saving more and spending less.
The latest results of the First Command Financial Behaviors Index® reveal that 49 percent 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 dealing with the cuts to defense spending by increasing the amount they are saving. This is the highest level recorded since the question was added to the survey in November 2012.
The Index reveals that 47 percent of survey respondents are cutting back on everyday spending, and holiday celebrations are becoming an even bigger target for spending cuts. First Command’s annual Thanksgiving spending survey reveals that 82 percent of families plan to cut back this year, up 20 points from the previous year. A similarly frugal trend is expected to emerge from the company’s upcoming holiday gift spending survey.
Other ways military families are responding to sequestration cuts include:
- Decreasing the aggressiveness of investments (21 percent)
- Moving investments to cash (13 percent)
- Starting work with a financial planner (15 percent)
This growing focus on frugal living comes at a time when many servicemembers and their families are experiencing financial insecurity and worry related to defense downsizing and sequestration. September survey results reveal that three out of four career military families are anxious about cuts to defense spending and four out of five expect to be financially affected. Career concerns are at a record high, with more than half of survey respondents reporting that they are worried about their job security in the coming months.
“Deep worries about sequestration and defense cuts are prompting servicemembers and their families to intensify their frugal financial behaviors,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Today just 15 percent of military families indicate that they are not doing anything to prepare for sequestration, down from a record high of 42 percent in July 2013. Saving more and spending less is a reasonable and logical response to growing feelings of anxiety and concern.”
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.