The annual campaign to motivate people to take control of their personal finances kicks off next week with America Saves.
“Financial stability cannot exist without a healthy savings account,” said Gail Cunningham of the National Foundation for Credit Counseling, a sponsor for the program that also includes Military Saves, targeting members of the armed services.
“America Saves seeks to motivate, encourage and support low- to moderate-income households to save money, reduce debt and build wealth,” says a news release from the Consumer Federation of America, founder of the annual campaign.
Despite the best intentions of the program, it is failing to get people inspired. The federation uses this time to release its America Saves Personal Savings Index. All three categories — interest in personal savings, saving effort and perceived effectiveness of saving — declined in the past year.
“When money is tight, it’s difficult to think about saving. However, that is when an unplanned expense can be most devastating financially. The America Saves campaign provides consumers with the tools through which they can begin to build a financial safety net,” Cunningham said.
Unfortunately for many households, the most common form of saving is through a tax refund. The Internal Revenue Service reported last Friday that the first round of refunds have been sent to taxpayers based on 2013 tax returns.
More than 16 million refunds, totaling $64.5 billion, have been either mailed or direct-deposited to taxpayers. The average refund was a healthy $3,317, up 4.6 percent from the same time a year ago.
The top priority for the tax refund windfall, according to a survey from Taxsoftware.com, is to pay off credit card bills and other consumer loans, a choice for 32 percent of those surveyed. An additional 27 percent did say they would save or invest the money, followed by purchases, home improvements or a vacation.
Whether it is the result of the Military Saves program or simply a priority by the Department of Defense, military families are doing a much better job of saving and investing for their financial futures than civilians.
A survey conducted at the end of last year by First Command Financial found 43 percent of middle-class military families reported feeling financially secure compared with just 34 percent of civilians. And 45 percent of career military families said they were optimistic about saving and investing, compared with just 29 percent of civilians.
“Despite continued political and economic challenges, the optimism and perseverance of our career military is holding strong. Fears of sequestration and government shutdowns are likely serving to reinforce the value of saving more and cutting debt,” said Scott Spiker,
Ongoing programs at military bases in San Diego County serve as an example of how a stable financial household allows military members to focus on their top priority: preparedness to defend the country.