Top financial tips for military families
Life in the military creates unique financial challenges for families. Whether you are a recruit or about to leave, you will face unexpected circumstances. But that does not mean you cannot enjoy a peaceful and financially stable civilian family life.
Take these proactive steps to help protect your finances and reduce your stress.
Create a financial plan
Having a financial plan is more than knowing how much of your income should be spent on necessities and creature comfort. The plan should cover everything that involves money in the household.
First, take note of all the income generated. This should include your salary, your spouse’s income, and other passive sources.
The next step is to highlight all the regular expenses such as utilities, groceries, etc. Then, you should note all your loans or debt and how much you need to allocate to them every month.
Your insurance policies are an important part of financial planning as well. It would be good to get different types to cover huge, unexpected expenses.
For example, car insurance would be helpful if it gets damaged. Shop around different providers such as USAA car insurance to find the best deal for your situation.
Now that you have everything listed down, you can budget the income versus the expenses.
You could establish specific goals in your financial plan. An example would be to pay off your debt by a definite date. You can do this by calculating how much of your regular income would be used for the debt.
Once you establish your plan, stick to it. Do not make sudden and unnecessary changes that would affect everything. Your goal is to be stable, and being disciplined in your finances plays a vital role in that goal.
Save your money
An effective plan is created for the future. But do not just have one savings fund. It is better to have several.
You can take a certain amount from your monthly income for an emergency fund. Take a bit more for your child’s college fund. Have one to use for your retirement.
The exact amount for each savings would depend on your financial situation. You can save 20% of your income then divide that for an emergency, college, retirement, etc.
The idea is to get your money out of sight and forget about it. What you can do now is to set up different savings accounts for these and have an auto transfer in place for each one.
You can opt out of an ATM card for the college and retirement funds so you do not accidentally spend them, but spare one for the emergency fund.
Separation of income
If there are multiple sources of income in your household, it makes sense to separate their purpose. You can use your salary for utilities, insurance payments, and general savings. You can then allocate your spouse’s income for groceries, emergency funds, and loans.
By doing this, you do not get overwhelmed with everything you need to do. All the money transfers and admin work can take a lot of time and effort.
Work for military-friendly companies
The spouses of military personnel may find it difficult to land or retain a job from having to move every few years. While that may seem detrimental to building a career, they will soon find that there exist some companies that take into account their unique situations.
Hence, your spouse may very well establish a career with these military-friendly companies. This sets up your household for multiple sources of income, augmenting your own income and allowing for more leeway in managing your finances.
Hire a professional
If you feel overwhelmed with everything and cannot find the best way to manage your finances, it may be time to get a professional to help you. There are financial coaches all over the country who specialize in working with military personnel.
They can look at your financial situation and create a plan for you. On top of that, they can encourage positive behavior when spending money. The job of a financial coach is to show you how to manage your money better.
Financial stability can be challenging to achieve, especially for military families. But that does not mean it is impossible. By using these tips and sticking to a good financial plan, you should be able to achieve your goals.