Military service members and families have enough to worry about let alone money, yet financial issues rank at the top of their concerns about military life, according to the most recent – 2013 – survey of Blue Star Families. These concerns are understandable, because military families face financial challenges that civilian families don’t.
For example, active duty service members have to manage their finances from deployments. For those who are single and on their own, this can be complicated enough, as the ability to log onto US-based accounts can be sporadic and troublesome.Factor in a family and it becomes even more difficult. Managing the finances means figuring out a way to maintain a balanced budget, while communication is limited. Meanwhile, the spouse at home is essentially functioning as a single parent. That person needs, but often doesn’t have, the skills and tools necessary to make serving as the family’s Chief Financial Officer as easy as possible.
That’s why I wrote an eBook on money management for military families called Operation Money, which is both free and available to download on my site. (Non-military folks can benefit from the financial advice too.) Although I will say, knowing that women are my likely readers, I’ve structured it for you – and for women like Valerie Richards.
Richards is a military spouse. Her husband actively serves in the United States Coast Guard. Together, they have two young children and – quite frankly – make managing money (as a military family) look easy. She might argue otherwise. Even though her family has thrived through multiple deployments and moves, they still stress about their finances, particularly whether they’re keeping in line with their budget. “It’s actually the little things that make a big difference,” Richards says. “Every time we move we don’t know if we’re going to be in a three-bedroom house or a four-bedroom house. Or, our last house had built in bookshelves, so we got rid of our bookshelves… and you move and you get bookshelves, because this one doesn’t have bookshelves. That’s what people don’t account for -- all those small money things that add up.”
I’m sure all of us – both military and civilian – can relate to Richards on the budgeting front. Enter Operation Money’s Budgeting Boot Camp, where you’ll learn to…
Live below your means, not within them. We generally hear to live within our means, but the word within implies that you’re spending every dollar, living up to – and likely stretching – the limits of your income. Instead, live below your means. That means you have money left over at the end of every month to save or – if you’ve reached your savings goals – to spend as you wish. So, this means you need to spend less than you make. The Richards do it. She says they’re probably living a few pay grades below what her husband makes. “Every time my husband gets a raise, we don’t even see it,” she says. “It goes straight to savings.” They started living off of one income when they decided to have kids, putting Valerie’s entire salary into savings. She says it was easier to adjust to without children.
Follow the money. If you’re living within your means, and not below them, then track your expenses. Weight loss research says if you write down everything you eat in a food diary, you begin to realize how much you’re consuming. And then—because, perhaps for the first time in years, you’re conscious of what you’re putting in your mouth—you eat less. Tracking your spending works much the same way. If you write down how much you spend (the big occasional expenses, the small expenses and the virtual buys), you become conscious of where your money is going. You watch it add up. More importantly, you see the areas where you’re overspending so that you can make cuts to start saving instead. “I’ve learned that if we save money, then we don’t need to make choices dictated by money,” says Richards.
Be strategic. After you see how much is going out, and compare it to how much you have coming in, you can make adjustments to get your budget in line. I recommend confining your spending to these percentages: 35% for housing, 15% for transportation, 15% for debt, 10% for savings and 25% for any other living expenses. Know that you can borrow from any category but savings — so, say, if you don’t have as much to pay for housing, but you want to spend slightly more on debt, that’s okay. But savings, at 10%, isn’t negotiable.
Operation Money is free and available here. Pass it along to anyone you think it would help!
Jean Chatzky is a member of the DailyWorth Connect program. Read more about the program here.