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June 23, 2015 at 12:12 PM
Despite anxiety over sequestration, military families are more confident about their financial security than they have been in some time. The First Command Financial Behaviors Index reached 140 for the first quarter of 2015, an increase of 17 points and a record high.
The index, which is reported quarterly, found that as of May, 72% of middle-class military families believe their financial situation will improve in the next year, and 69% are more confident about their ability to retire.
Both of those measures have improved by 23 points since January.
Short-term confidence is moving up, as well. Fifty-three percent of respondents said they feel more comfortable financially from month to month, up 17 points since January and nearly matching the August 2012 high of 54%.
“This upsurge in financial confidence among our men and women in uniform is a remarkable development as it comes at a time of continued anxiety about how cuts to defense spending and military pay and benefits may affect their family finances,” Scott Spiker, CEO of First Command Financial Services, said in a statement. He added that about three-quarters of respondents expect sequestration to affect them financially.
He attributed the rise in confidence to servicemembers’ “frugal living.” He noted, “Almost half say they are increasing the amount they are saving, and two out of five are cutting back on everyday spending. These are the types of positive money behaviors that can boost financial confidence in times both good and bad. They serve as an effective agent for counteracting feelings of financial uncertainty and worries.”
