A budget-cutting proposal to close military commissaries threatens to further complicate the financial lives of active-duty servicemembers as they prepare for the impact of defense downsizing on their family finances.

Recent results of the First Command Financial Behaviors Index® reveal that many military families are concerned that grocery bills will consume a larger portion of their monthly household budget should lawmakers enact a plan to shutter taxpayer-subsidized commissaries and instead give servicemembers a food allowance.

The Index reveals that 72 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) believe grocery prices are better in commissaries than off-installation stores. Roughly two out of five (39 percent) say that eliminating this lower-cost source of groceries would drive up their food costs, and 28 percent expect they would need to allocate a larger portion of their monthly budget to cover the added expense.

“Roughly four out of ten military families consider commissaries to be an important part of their current compensation as well as future retirement benefits,” said Scott Spiker, CEO of First Command Financial Services Inc. “The threat of higher food costs complicates their ongoing efforts to spend less, save more and cut debt in preparation for the coming wave of military budget cuts.”

Despite these concerns, many servicemembers are taking an optimistic view of the cost-cutting proposal. Survey respondents say that replacing the taxpayer-supported stores with a monthly food allowance would give military families the added convenience of shopping anywhere and give the nation another way to cut government spending (44 percent and 43 percent, respectively). Eliminating commissaries would save the federal government about $1.3 billion a year, according to the nonpartisan Congressional Budget Office, which has long recommended this cost-saving move.

“As lawmakers look for ways to cut federal spending, our men and women in uniform are sizing up how those cuts might impact their near- and long-term finances,” Spiker said. “They are committed to pursuing frugal money behaviors, and they are focusing on the positive ways these changes may impact their families and the nation.”

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.



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