FORT WORTH, Texas – Anxiety over the economy and sequestration is prodding active-duty families to scale back their summer vacation plans. The First Command Financial Behaviors Index® reveals that 59 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 applying one or more money-saving tactics to their summer getaway plans due to economic or sequestration concerns.
Popular cost-cutting approaches related to economic worries include:
- Driving rather than flying (35 percent).
- Cooking while on vacation rather than eating out (27 percent).
- Staying closer to home (25 percent).
- Tie: Taking shorter vacations / Visiting family members (23 percent).
- Tie: Taking “staycations” / Staying with friends (22 percent).
Similar strategies were reported by respondents who are cutting back to due sequestration concerns. Their No. 1 cost-cutting approach is taking a shorter vacation (27 percent).
Many of these cost cutting measures are not new to military households, which have been responding to economic concerns by cutting back on vacation spending for several years. The Index reveals that among military families who have changed their plans for economic reasons, 33 percent have been “visiting family” and 28 percent have been “driving rather than flying” for more than three years.
These types of long-term frugal behaviors are helping servicemembers feel more optimistic about their long-term financial prospects. The April survey reveals that 54 percent of respondents reported feeling extremely or very confident that their financial situation will improve in the next year, up from a year-to-date low of 45 percent in January. And 54 percent said they feel extremely or very confident in their ability to retire comfortably, up 18 points from a year-to-date low of 36 percent in March.
But while long-term optimism is on the rise, persistent worries over defense downsizing and budget cuts are causing military families to grow increasingly concerned about their near-term household finances. The ranks of April survey respondents who said they did not feel financially stretched month to month dropped 15 points to 43 percent, the lowest level so far this year.
“Our men and women in uniform are beginning to feel how sequestration and military budget cuts may impact their lives,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Three out of five military respondents say they feel anxious about sequestration, and three out of four say they expect to be financially affected by anticipated cuts to defense spending. These families have made spending less and saving more a permanent part of their financial behaviors. Cutting back on vacation spending is a reasonable and frugal response to an uncertain financial 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.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc., in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Educational Foundation is a 501(c)(3) public charity. It is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.