The number of middle-class military families working with a financial advisor has increased by two percentage points in a month because of the sequestration budget cuts, according to a survey by First Command Financial Services Inc., which helps military families with financial issues.
The number of families working with an advisor was 7 percent in February, according to the First Command Financial Behaviors Index. The firm surveyed 530 military families, NCOs and commissioned officers with household incomes of at least $50,000.
Other areas where mandatory federal budget cuts are having an effect on military families is in savings. Thirty-seven percent of respondents have increased their savings, an increase of 7 percentage points over January, according to the survey.
In investing, 15 percent have decreased the aggressiveness of their investments, an increase of 6 points over January, and 10 percent are moving investments to cash, an increase of 2 points.
“Worried about their military careers and economic futures, men and women in uniform are taking positive steps to get squared away in their family finances,” says Scott Spiker, CEO of First Command Financial Services.
“As active-duty families continue to embrace frugal strategies, we expect to see increasing demand for financial coaching from knowledgeable financial professionals."
Military families expect sequestration to affect them in a number of ways, including reductions in retirement benefits, reduced likelihood of promotion, increased responsibility for health-care costs and reduced education benefits, according to the survey.