Americans intend to increase savings through end of 2009, First
First Command Financial Behaviors Index™ rises to highest quarterly finish in 1
10.22.2009 – FORT WORTH, Texas – American families intend to bump up their
savings and investing through the rest of the year, suggesting a potential reversal of
the recent drop in the nation’s savings rate.
A third-quarter surge in positive financial intentions among middle-class Americans
helped nudge the First Command Financial Behaviors Index™ to 91, a one-point
gain that nevertheless represents the highest quarterly finish of the past 15 months.
This newfound optimism is surfacing amid increasing signs that the recession is
ending and the economy is poised for a rebound.
“Many Americans are starting to see light at the end of the economic tunnel,” said
Scott Spiker, CEO of First Command Financial Services, Inc. “Forty-one percent of
Americans state that the economy has hit rock bottom and is on its way to recovery,
an increase of 10 points from May.”
This positive view stands in welcome contrast to a recent decline in savings. In
August, the personal savings rate fell for the third month in a row to 3 percent of
disposable income, the Commerce Department reported Oct. 1. The First
Command Financial Behaviors Index™ revealed a marked decrease in the amount
of money Americans were able to put into short-term savings during August and
September as the realities of unemployment and forced furloughs weighed heavily
on family budgets.
The Index reveals that the average amount of money placed in short-term savings
dropped 33 percent from $1,169 in July to $787 in August, and it remained low in
September at $860. The drop was consistent across long-term savings and
retirement accounts, though slightly less severe, with families decreasing long-term
savings and retirement contributions by 20 and 21 percent, respectively.
While Americans reduced their monthly savings and investment contributions in the