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Servicemembers Committing Tax Refunds To Household Finances, First Command Reports

First Command Financial Behaviors Index® reveals top tax refund spending plans for 2015

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FORT WORTH, Texas — The majority of America’s career military families with a tax refund in their future are planning to spend it on shoring up their household finances.

First Command’s annual survey on tax refunds reveals that 66 percent of middle-class military families (commissioned officers and senior NCOs 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 cut debt, save more or pay monthly bills. This continues a long-term trend in which the majority of military families report plans to commit their refunds to these and other frugal behaviors.

“Facing the continuing fiscal uncertainties of sequestration and defense downsizing, members of America’s career military are earmarking tax refund dollars for frugal strategies aimed at fortifying their family finances,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Three out of four military families report feeling anxiety about sequestration, and they worry about the impact on their family finances. By continuing to focus on careful money management, our men and women in uniform are taking positive steps to feel better about an uncertain future and get their financial lives squared away.”

The latest survey findings from the First Command Financial Behaviors Index® reveal that middle-class military families will be using their tax refunds to:

  • Pay down debt (33 percent)
  • Bump up general savings (31 percent)
  • Pay monthly bills (31 percent)
  • Take a vacation (23 percent)
  • Build up an emergency fund (22 percent)
  • Pay for consumer purchases (20 percent)
  • Dine out (20 percent)
  • Make home improvements (19 percent)
  • Pre-pay major bills (15 percent)
  • Apply to future taxes (15 percent)
  • Put toward an investment account (14 percent)
  • Open or pay into a college savings account (12 percent)

Notably, the Index reveals at least one different area of emphasis between servicemembers who work with a financial advisor and those who take a do-it-yourself approach. Middle-class military families with a financial advisor are more likely to spend their tax refunds on vacations (26 percent versus 3 percent) and dining out (23 percent versus 3 percent).

“Military families who work with a financial advisor may be more likely than others to indulge in a consumer purchase because they already have healthy household budgeting behaviors,” Spiker said. “The key is the coaching relationship offered by financial advisors. Through these ongoing relationships, military families can improve their behavioral discipline in ways that help them prepare for tomorrow so they can enjoy today.””

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.


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