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.