First Command News & Media
FOR IMMEDIATE RELEASE — October 20, 2014
Servicemembers Saving More In Face Of Sequestration Concerns, First Command Reports
FORT WORTH, Texas — The First Command Financial Behaviors Index® reveals that military families who work with a financial advisor are saving more than their do-it-yourself counterparts
The First Command Financial Behaviors Index® reveals that middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) intensified their already-strong savings efforts during the second quarter of 2014. Short-term savings averaged $1,185 per month, up 10 percent from the first quarter. Retirement and long-term savings grew 4 percent to a monthly average of $2,460. All told, the average monthly savings rate is up 20 percent from the end of 2013.
This savings surge is being propelled by worries over sequestration and defense downsizing. The Index shows that over six-in-ten military families (65 percent) expressed feelings of anxiety about sequestration during the second quarter. June survey data showed that the top action taken by military families to deal with sequestration was to increase the amount of savings. This action was reported by 44 percent of respondents.
Military families who work with a financial advisor are leading the savings trend. During the second quarter, they added $616 more in short-term savings and $1,961 more in retirement and long-term savings than their do-it-yourself counterparts. Looking ahead to their savings intentions, those with a financial advisor are more likely than those without an advisor to anticipate increasing their savings (38 percent versus 22 percent).
These current and future savings efforts helped to propel the Index’s behaviors sub-index ahead 12 points to 142 and the intentions sub-index ahead 25 points to 122, driving the overall Index score up 10 points to a record-high of 131 for the second quarter. The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.
“Financial advisors are making a real difference in the lives of military families by helping them take proactive actions in response to the current uncertainties of sequestration,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Perhaps the greatest value of working with an advisor is the opportunity it gives military families to move beyond short-term responses and focus on their long-term financial security. By the end of the second quarter, just 14 percent of military families said they were starting to work with a financial advisor as a result of sequestration. We need many more of our military families to start focusing on the long term. Financial planning delivered through face-to-face coaching can help these families bridge the gap between current uncertainties and future realities so they can successfully transition to the military of 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.