After several months of financial anxiety while issues like sequestration and the government shutdown remained top of mind, military investors ended 2013 feeling more optimistic, according to the First Command Financial Behaviors Index.
The index measures trends in financial behaviors with a baseline of 100. A higher score on the index indicates more positive financial behaviors. Military families earned a score of 118 on the index, up 17 points from the first quarter of 2013. This is the third consecutive increase and the highest quarterly finish for military families in more than a year. The score for the civilian population increased as well, but to a smaller degree. First Command noted the civilian score fluctuated throughout 2013, finally settling at 95, up nine points from the first quarter.
For the fourth quarter, the index found just over a third of civilian respondents felt financially secure, compared with 43% of military respondents. Military respondents were more optimistic in general (45% versus 29%), and more confident about their retirement prospects (38% versus 33%).
Scott Spiker, CEO of First Command Financial Services Inc., said military respondents’ higher levels of optimism and confidence are the result of better financial habits.
“Throughout 2013, both military and general population families felt the impacts of sequestration,” Spiker said in a statement. “But servicemembers were considerably more likely to respond by putting money away for the future. And it is this proactive approach to personal finance that is the most likely source of the increased confidence in the future. Our research has consistently found that families get an emotional lift from the act of savings. Even families with credit card or other short-term debt can feel optimistic and financially secure as long as they are disciplined in their approach to savings and paying down debt.”