Americans Don’t Expect Economic Bailout to Improve Their Finances

First Command Financial Behaviors Index Indicates That Nearly Two-Thirds of American Families Are Not Confident in the $700 Billion Plan

As the government begins rolling out the $700 billion economic bailout package, nearly two-thirds of American families do not expect the far-reaching plan will improve their personal finances, according to the First Command Financial Behaviors Index.

Results of the Index’s October survey indicate that 63 percent of American families do not feel confident that the government rescue plan will have a positive effect on their personal financial situation. And one-third (32 percent) think that it will be at least two years before their household’s financial situation stabilizes.

“The majority of Americans do not believe the $700 billion plan will bail them out of their personal economic crisis,” said Scott Spiker, CEO of First Command. “They don’t expect a rapid turnaround, and they are beginning to manage their finances accordingly. In fact, our third quarter Index findings reveal that consumers are already taking matters into their own hands. They are buttoning-down for the downturn by saving more and cutting debt. Short-term savings for the typical family totaled $901 in September, up 29 percent from $696 in June.”

Financial confidence is considerably higher among those who are planning for the future. Consumers with a financial plan consistently register a higher Index score than respondents without a financial plan, and the point spread has been steadily widening (eight points in June versus 17 points in September). The Index among those with a financial plan actually increased four points to 97 in the third quarter while the Index score among those without a financial plan decreased five points to 80.

“Our research also consistently shows that consumers who have a financial plan through a relationship with a trusted advisor are more likely to stay the course during times of market volatility than those without a plan,” Spiker said. “The average American family may be more likely to receive a jolt of confidence from a personal financial plan than the government’s rescue plan.”

Regarding the U.S. economy, only half of Americans believe that the government plan will help to stabilize the national situation. Nearly two-thirds (64 percent) of Americans think that it will be at least two years before the economy is stable again.

The October survey also reveals that women are not as confident as men regarding the potential of the bailout plan to improve their personal finances. Seventy percent of women are not confident that the plan will have a positive impact on their personal financial situation, while only 54 percent of men reported the same sentiment. However, men and women report relatively similar thoughts on the length of time it will be before their household’s financial situation is stable. Thirty-five percent of women and 30 percent of men think it will be at least two years before their situation stabilizes.

“Americans are realizing that a long-term view is necessary,” Spiker said. “They don’t expect the $700 billion plan will lead to a recovery anytime soon.”

About the First Command Financial Behaviors Index

Compiled by Sentient Decision Science, LLC, the First Command Financial Behaviors Index assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 1,000 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 +/- 3.1 percent with a 95 percent level of confidence.

About Sentient Decision Science, LLC

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index. Sentient is a full-service market research firm with special vertical expertise within the financial services industry. Sentient specializes in advanced research design 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 personalized financial plans that emphasize accumulating wealth while reducing risk, First Command Financial Advisors have established lasting relationships with hundreds of thousands of client families since 1958.

First Command Financial Services, Inc. is the parent company of First Command Financial Planning, Inc. (Member SIPC, FINRA) and First Command Bank (Member FDIC). Insurance products and services are offered by First Command Financial Services, Inc. Financial planning services and securities products are offered by First Command Financial Planning, Inc. Banking products and services are offered by First Command Bank. Securities products are not FDIC insured, have no bank guarantee and may lose value. In certain states, First Command Financial Services, Inc. is a separately registered domestic corporation and does business in California as “First Command Insurance Services.”

Contacts

First Command Financial Services
Media Relations:
Mark Leach, 817-569-2419
msleach {at} firstcommand(.)com