Military Shoppers Making Deep Cuts For The Holidays, First Command Reports

FORT WORTH, Texas -- (BUSINESS WIRE) -- Middle-class military families expect to make deep cuts in holiday spending, with gift shoppers budgeting for about half of what they spent last year.

The latest findings of the First Command Financial Behaviors Index® reveal that 49 percent of middle-class military families (those in pay grades E-6 and above with household incomes of $50,000 or more) expect to spend less on gifts, making it their No. 1 cost-cutting strategy for the holidays. These frugal shoppers expect to spend significantly less than they did during the 2011 holiday season. They plan on average expenditures of $788, almost half the $1,472 they estimate having spent last year on holiday gifts. And 45 percent say they plan to spend under $500.

Military families also expect to intensify their frugal holiday strategies for 2012 by:

• Giving fewer gifts per person (41 percent of survey respondents, up nine points from 2011).
• Staying closer to home or reducing travel (39 percent, up 13 points).
• Spending less on decorations (34 percent, up 13 points).

Other popular belt-tightening financial behaviors in military families include:

• Giving gifts to fewer people.
• Setting a maximum amount for gifts.
• Buying gifts from discount stores.
• Spending less on food.
• Making gifts yourself.

Nearly half of surveyed families indicated they would do at least some of their gift buying on Black Friday, making it an important holiday shopping day for one in every two military families. This was the second consecutive year that military households expected to out-pace the Black Friday plans of the general population. Two-in-ten military households intended to do all or most of their holiday shopping on the day after Thanksgiving. This compares to only one-in-ten general population households.

This holiday season marks the fifth consecutive year that the Index has pointed to leaner spending in military families, continuing a larger trend toward frugal living, said Scott Spiker, CEO of First Command Financial Services, Inc.

“Today’s military families are responding to the challenges of continuing economic turmoil, the uncertainties of sequestration and long-term defense downsizing through a sustained focus on spending less, cutting debt and saving more,” he said. “By relying on cost-cutting behaviors in their holiday spending, they continue to underscore the value of integrating positive, time-tested strategies into all aspects of their financial lives.”

About the First Command Financial Behaviors Index®

Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, 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. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. www.firstcommand.com/research

About Sentient Decision Science, Inc.

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.

About First Command

First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.

First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc. in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met.