APRIL 17, 2015, FORT WORTH, Texas ? The majority of America?s career military families with a tax refund in their future are planning to spend it on shoring up their household finances.
First Command?s annual survey on tax refunds reveals that 66 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) who have received or expect to receive a tax refund plan to use it to cut debt, save more or pay monthly bills. This continues a long-term trend in which the majority of military families report plans to commit their refunds to these and other frugal behaviors.
?Facing the continuing fiscal uncertainties of sequestration and defense downsizing, members of America?s career military are earmarking tax refund dollars for frugal strategies aimed at fortifying their family finances,? said Scott Spiker, CEO of First Command Financial Services, Inc. ?Three out of four military families report feeling anxiety about sequestration, and they worry about the impact on their family finances. By continuing to focus on careful money management, our men and women in uniform are taking positive steps to feel better about an uncertain future and get their financial lives squared away.?
The latest survey findings from the First Command Financial Behaviors Index? reveal that middle-class military families will be using their tax refunds to:
* Pay down debt (33 percent)
* Bump up general savings (31 percent)
* Pay monthly bills (31 percent)
* Take a vacation (23 percent)
* Build up an emergency fund (22 percent)
* Pay for consumer purchases (20 percent)
* Dine out (20 percent)
* Pre-pay major bills (15 percent)
* Apply to future taxes (15 percent)
* Make home improvements (19 percent)
* Put toward an investment account (14 percent)
* Open or pay into a college savings account (12 percent)
Notably, the Index reveals at least one different area of emphasis between servicemembers who work with a financial advisor and those who take a do-it-yourself approach. Middle-class military families with a financial advisor are more likely to spend their tax refunds on vacations (26 percent versus 3 percent) and dining out (23 percent versus 3 percent).
?Military families who work with a financial advisor may be more likely than others to indulge in a consumer purchase because they already have healthy household budgeting behaviors,? Spiker said. ?The key is the coaching relationship offered by financial advisors. Through these ongoing relationships, military families can improve their behavioral discipline in ways that help them prepare for tomorrow so they can enjoy today.?
