In sequestration’s wake, military families cut spending

Many military families also are increasing the amounts they save (25 percent), decreasing aggressive investments (10 percent), moving investments to cash (7 percent), and starting to work with a financial advisor. The general population, in contrast, is not pursing any of these actions, with the exception of increasing savings (21 percent).

The survey also 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) 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.

First Command Financial Services’ Behavioral Index also reveals the following:

• 43 percent of military families 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).

The research notes also that military families who have a financial planner are more likely than others to feel extremely or very confident that their financial situation will improve next year (53 percent versus 36 percent). And those who work with a planner are also more likely to feel extremely or very confident in their ability to retire comfortably (58 percent versus 33 percent).