Continuing economic turmoil sent the First Command Financial Behaviors Index® tumbling six points during the second quarter, reflecting a steady erosion in the financial intentions and attitudes of middle-class Americans.

After hitting a two-year high of 101 in December 2010, the Index has been declining over the first half of 2011 – with a substantial drop from 90 in April to 86 in May. This four-point drop was the product of a substantial decline in the behaviors sub-index, which was driven largely by a decrease of nearly $350 in the average amount Americans put into retirement accounts (from $940 to April to $598 in May). The attitudes sub-index has also been on the decline since the beginning of the year, reaching a two-year low of 82 in April.

“Dealing with a downbeat economy is becoming a way of life for middle-class Americans,” said Scott Spiker, CEO of First Command Financial Services, Inc. “June survey results illustrate that nearly two-thirds of consumers believe that the U.S. is currently experiencing a double dip recession, a stark increase from the 50 percent who shared this same sentiment last year. They are working hard to live more frugally and keep their household spending in check. But they are still struggling with savings and debt.”

Consumers are using loans and their savings as a way to pay for amenities during the continuing economic turmoil. Just under half of consumers report taking out at least one loan in the last year, and one third report taking out at least one loan in the last six months.

Furthermore, results indicate that 92 percent of Americans have at least some sort of debt built up – proven further by the record low savings-to-debt ratio (defined as the amount of total savings compared to the amount of total debt a family carries). In May, only 27 percent of families reported having a positive savings-to-debt ratio, the lowest percentage in the history of the Index.

“The decline in the savings-to-debt ratio is a matter of great concern,” Spiker said. “Our research has consistently demonstrated that the savings-to-debt ratio is perhaps the most significant contributor to feelings of financial optimism. As one’s savings-to-debt ratio increases—meaning more savings, less debt—feelings of financial security increase, and feelings of being financially stretched decrease. A positive savings-to-debt ratio makes a person feel better about the present and more optimistic about the future.”

Notably, the growing belief that we are in a double dip recession does not appear to be intensifying consumer concerns about the economy. In fact, the second quarter ended with only 49 percent of respondents reporting being concerned with the state of the economy – the lowest level since the launch of the Index in early 2008. And the Index logged a slight increase from May to June.

“Given the decrease in the attitudes sub-index over the last two quarters, it will be interesting to see if consumers’ apprehension drives them to start changing their financial behaviors so they can build a positive savings-to-debt ratio in the months to come,” Spiker said.