Military families are more likely than other Americans to feel the adverse effects of sequester cuts and defense downsizing, and they are understandably concerned about the financial and career impacts. Concern about the state of the economy is on the rise in military households – and servicemembers and their families are responding by exercising greater control over their personal finances.
The latest survey findings from the First Command Financial Behaviors Index® reveal 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) list the state of the economy as one of the financial issues concerning them the most. This result represents a significant increase from the first half of the year, when economic worries appeared to be on the decline. Concerns for the state of the economy fell to a record low of 49 percent in May.
Many servicemembers and their families are responding to these concerns through frugal living. Four-in-ten survey respondents indicate that they are cutting back on spending as a result of sequestration, and one-quarter say they are increasing savings. Notably, these behaviors may be helping active-duty households overcome their worries about the state of the economy and feel more optimistic about their own financial futures. The Index reveals that:
- 43 percent are extremely or very confident that their financial situation will improve next year (up seven percentage points from January) ,
- 45 percent feel extremely or very financially secure month to month (up six points) and
- 42 percent are confident in their ability to retire comfortably (up 11 points).