Financial peace of mind important for military families
Michael Staples
The Daily Gleaner
14 Jan 2015
If you're a military family in the U.S. making at least $50,000 a year, financial concerns are not likely high on the list of things that keep you awake at night.
A report released last week by the First Command Financial Behaviours Index reveals that monetary confidence is edging up amongst such groups in that country.
The findings say it's happening despite ongoing concerns related to sequestration - a process that automatically cuts federal spending cross most U.S. departments and agencies, including Defence, if Congress fails to agree on a deficit-reducing budget before a specified date.
Even with that in mind, America's career military is growing more confident in their overall finances, declares the report.
The index assesses trends among the American public's financial behaviours, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000
"As military families navigate the uncertainties of sequestration and defence downsizing, they are taking actions that help them feel more optimistic about their financial security," Scott Spiker, CEO of First Command Financial Services Inc., said in a news release
The report, citing third-quarter results, reveals that more than half of middle-class military families (senior NCOs and commissioned officers) believe their financial situation will improve in the next year (up six points to 54 per cent).
Career military families are also growing more confident in their ability to retire comfortably (up 11 points to 50 per cent) and less likely to feel financially stretched month to month (down 17 points to 39 per cent), the report said.
Eighteen months ago, this same index revealed that 68 per cent of middle-class U.S. military families felt they wouldn't be able to retire as comfortably as prior generations.
These new figures represent a dramatic turnaround.
Considering the uncertain times that are plaguing economies worldwide, these findings and the apparent reversal in fortunes are borderline shocking.
But, as the report reveals, this new found confidence is being realized with the assistance of some common sense, based on smart thinking and clever planning. In other words, military families are seeking professional financial help and placing their funds in safe places.
Monthly savings rates are being positively impacted by the support of a financial advisor, the report said.
During the third quarter, military families working with a financial adviser were considerably more likely to save - and put away more dollars - than their do-it-yourself counterparts, findings revealed.
"Saving money gives families a greater sense of control over their finances, which we see reflected in growing feelings of confidence," Spiker said.
Looking ahead, the report found that most military members expect to continue their savings behaviours in the coming months. Half of those surveyed in September said they are increasing the amount they are saving, according to the report.
Service members with a financial advisor are more likely than those without to anticipate increasing their monthly savings amounts (39 per cent versus 28 per cent).
The report also found that while overall financial confidence is growing, sequestration is never far away from the minds of U.S. military families.
Fortunately no such process exists in this country.
Results reveal that 76 per cent of military respondents feel anxious about cuts to defence spending. That's up 14 points from the end of the first quarter.
Roughly four out of five military families expect to be financially impacted by sequestration, and are continuing to take action through a variety of positive behaviours.
In contrast, concern remains muted in the general population with about two out of five civilian respondents expressing anxiety, the report said.
If this U.S. report can be used as an accurate yardstick to measure confidence, then financial stability can make a huge difference when it comes to security and peace of mind.
So, what does all this mean for Canadian military families?
The answer is simple. Start saving.
Seek professional help in putting you financial matters in order.
The proof as to what all this will mean down the road is seemingly in the pudding.
