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Servicemembers Using Tax Refunds To Fortify Family Finances, First Command Reports

First Command Financial Behaviors Index® reveals top tax refund spending plans for 2014

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FORT WORTH, Texas — Facing another year of fiscal uncertainties, middle-class military families are again committing tax refunds to shore up their household finances.

Recent survey findings from the First Command Financial Behaviors Index® reveal that 72 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) who have received or expect to receive a tax refund plan to use it to save more or cut debt. This marks the third consecutive year that the majority of military families reported plans to commit their refunds to these and other frugal strategies.

“While this year’s survey on tax refunds reveals a continuing focus on frugality in military families, the more significant news may be that the reasons for frugal living are changing,” said Scott Spiker, CEO of First Command Financial Services, Inc. “As the economic concerns of the past several years dissipate, sequestration is becoming the new recession. Over three out of five military families report feeling anxiety about sequestration. They worry about how military budget cuts and defense downsizing will impact their family finances. By continuing to focus on saving more and spending less, our men and women in uniform are taking positive steps to get their financial lives squared away.”

The top tax refund spending plans among middle-class military families for 2014 are:

  • Pay down debt (44 percent)
  • Put into general savings (43 percent)
  • Pay monthly bills (19 percent)
  • Put toward an investment account (17 percent)
  • Vacation (16 percent)
  • Build up an emergency fund (14 percent)
  • Home improvements (11 percent)
  • Consumer purchases (10 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 significantly less likely to spend their tax refunds on paying monthly bills than those without an advisor (10 percent versus 24 percent).

“This difference suggests that military families with a financial advisor already have healthy household budgeting behaviors, so their monthly bills are less of a concern,” Spiker said. “We believe the key is the coaching relationship offered by financial advisors. Through these ongoing relationships, military families can improve their behavioral discipline in ways that will help them navigate an uncertain future of sequestration and defense downsizing.”

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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