Creating a budget for your military family

When living the military lifestyle, you just accept that there will be many things you can’t control. One thing you can control? How you spend and how you save. While that may look different every time you PCS to a new duty station, having a spending and savings plan (aka a budget)  in place is so important.

We’ve created an easy to use, but thorough, Spending and Saving Plan tool to use. Before you get started, here are some tips to help you #ThinkLikeASaver, ensuring that your money is working smarter and harder for you.

Step 1. Determine your income.

To create an effective budget, you need to know exactly how much money you’re bringing in each month. Calculate your monthly income by adding your pay and any other sources of income that you receive regularly. Be sure to use your net pay rather than your gross pay. Your net pay is the amount you receive after taxes, allotments, and other allocations, like TSP savings, are deducted.

Step 2. Track both your expenses and your spending.

This step is essential. It’s not enough to write down your actual expenses like your rent, auto loan payments, and cell phone bills, you must track what you are spending.

If you’ve ever felt like your money “just disappears,” you’re not the only one. Tracking your spending is a great way to find out exactly where your money goes. Spending $10 a day at the Shoppette, or $5 every morning for breakfast doesn’t sound like much until you calculate the total cost per month.

Tracking your spending for a month will help you pinpoint the areas where you may be overspending and help you quickly identify where you can make cost-efficient cuts. Gather your receipts in an envelope, or take a highlighter to your bank statement.

Once you’ve written out your expenses and tracked your spending habits, you’re ready for the next step.

Step 3. Set your financial goals.

Now you get to look at your present financial situation and habits and decide what you want your future to look like. Ask yourself what’s most important to you right now? What financial goals do you want to achieve?

Some common goals include building an emergency fund, paying down debt, having a ‘transition fund’ for your eventual re-entry into civilian life, or saving for retirement and investments.

Step 4. Decrease your spending or increase your income.

What if you set your financial goals and realize there’s not enough money left at the end to save for the things you want?

You essentially have two choices. You can either change the way you manage your current income or add a new source of income. While in today’s gig economy, it’s considered easier than ever to add a stream of income, we know there are additional challenges for military families like childcare, deployments, and a high rate of military spouse unemployment.

Even if you can add income, you may have identified some spending habits you’d like to change by decreasing how much you spend.

Take a look back at your expense tracking. For the nonessential items, consider reducing your spending. For example, if you find that you are spending quite a bit on entertainment, like movies or dining out, reduce the number of times you go per month.

Then apply the money that’s been freed up to your savings goals.

For more ideas on decreasing your expenses, check out these 54 Savings Tips.

Step 5. Stick to your plan.

Make sure you stick to your spending and savings plan. To make saving more efficient, set up automatic savings so that you can set it and forget it! Saving automatically is the easiest way to save.

Reassess and adjust your plan whenever you have life changes such as marriage, a new baby, a move, or a promotion.

Following your plan ensures that you’re financially stable, are ‘thinking like a saver,’ and better prepared for those unexpected emergencies.

Want a savings accountability partner? Take the Military Saves Pledge or re-pledge and commit to saving successfully. Military Saves will support you by being your “Savings Accountability Partner” with tips, resources, nudges, and email and text communications to help you stay on track with your savings goals.

Tip of the Day

  • Written by Guest Blogger | September 30, 2014

    The Thrift Savings Plan (TSP) offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans. Sign up or get more info at tsp.gov

Saver Stories View all »

Setting a Goal Leads to Success

Written by Super User | May 24, 2019

Growing up, Marisa’s dad had always talked about saving first, but she said she didn’t really internalize it until much later. “I was drifting along with no plan, carrying a little bit of revolving debt, saving some money here and there, but without a real plan for it.”

Read more...

Making Saving Automatic Leads to Personal Success

Written by Lila Quintiliani | May 27, 2020

Ryan’s savings journey started when he was an active duty airman. Frequent deployments and temporary duty assignments gave him the opportunity to save. By the time he transitioned out of active duty, he had built up a healthy rainy-day fund and had started to aggressively save for retirement.

Read more...

When You Start Small, Saving is Easy

Written by Lila Quintiliani | August 12, 2019

When Attiyya first got married, she and her Marine husband had just graduated from college and were focused on paying off student loan debt. They had both attended private schools and had sizeable loans. Then three months after the wedding, the couple found out they were pregnant with their first child.

The first year of their marriage, says Attiyya, was a balancing act between paying down debt and saving for the future.

Read more...