07.21.2022 By Krystel Spell

6 Steps to Establishing a Spending and Savings Plan for Your Military Lifestyle

The finances of military service members and their families are unique because not only must you account for regular everyday life expenses, but also plan for ever-changing circumstances like PCS moves, deployments, and fluctuating income.

The finances of military service members and their families are unique because not only must you account for regular everyday life expenses, but also plan for ever-changing circumstances like PCS moves, deployments, and fluctuating income. For example, during deployments, the service member’s income often increases, then decreases when they return home. During a PCS, it’s possible that your household income decreases if the military spouse must leave their job. 

That’s why it’s essential to create a Spending and Savings Plan, aka "budget," that helps you see a clear view of your finances at any given time. Your spending and savings plan will also help you to understand where you can save, plan for upcoming life events (this means the fun things, too!), set financial goals, and feel more in control and empowered on your journey to financial stability. 

Here are six steps to help you create a Spending and Savings Plan that you can stick to AND takes military life into account. 
If you’d rather have us walk you through this rather than read it, or want additional support during the process, sign up for our video walk-through here: Establishing A Spending and Savings Plan For Your Military Lifestyle 


Before you begin, you will want to gather all sources of income by getting a month’s worth of earnings statements, like a Leave and Earnings Statement or paycheck stubs for any significant others with whom you share finances. Consider additional income outside of work, too, like child support, alimony, or recurring payments that you receive in third-party payment apps like PayPal due to a second job or income. 
You’ll also need to gather at least 3 months of bank statements, but preferably 6 – 12 months. 
Lastly, you’ll want to have the Military Saves Spending and Savings Plan Tool handy.  
Step 1: Determining Your Monthly Net Income 

Start by reviewing the income documents you gathered and write down ALL your income. Remember to include additional income sources like child support, alimony, etc. As you’re writing down this income, use the amount you receive after taxes.  
Two important things to note here: 

  1. If you or your significant other’s income fluctuates, refer to the last 3-6 months of income documents to get a baseline or minimum income brought in and use that figure. Keep in mind that you do NOT want to use an average here, instead use the minimum income amount.
    2. If you or the person you share finances with has direct payments coming out of your pay for things like retirement pay or savings, then add those back into your income. Don’t worry! You’ll account for them in expenses, as well, to balance everything out. 

Step 2: Determine Your Monthly Expenses  

Now that you’ve determined your income, it’s time to review your bank statements and make note of your recurring expenses. We suggest looking at 3-6 months of expenses to understand what you truly spend.  

Again, be sure to account for expenses like child support and alimony. Also include any other expenses coming directly out of your paycheck, like contributions to a Thrift Savings Plan (TSP) or 401K and allotments. Remember when you added those back into your income? It’s time to balance that by accounting for it in your expenses. 
Be sure to not try to go off what’s in your head, here. Look at those 3 -6 months of bank statements to get a clear view of your expenses. Chances are you might find charges that you’d forgotten about, especially those pesky subscription services! To be especially thorough, review 12 months of statements as you may find annual subscriptions and more. 
For expenses that fluctuate (like your electric or gas bill), we recommend rounding to the highest reasonable bill amount from the past year. 

Step 3: Filling Out Your Spending and Savings Plan 

Ready to get a really clear view of your finances? This is where you do it. You’ve taken note and written down income and expenses, but by transferring that information to your Spending and Savings Plan document, you’ll have a clear idea of what you spend on gas, dining out, groceries, entertainment, etc.  
You can access our Spending and Savings Tool by registering for our complimentary workshop. This tool is already categorized with the primary household categories and additional categories for things we like to call "adulting" (like life insurance) to break your expenses down even further. 

Step 4: Assess Your Financial Landscape 

Let's be honest. Talking or thinking about money can make many of us feel anxious, overwhelmed, or a myriad of other emotions. It's okay to feel all those things, process it, and then let go of any negative emotions.  
Here’s why: at this moment, you are taking steps to create a custom financial plan for yourself and taking control of your finances. That’s something to be celebrated! 

Now, take time to ask yourself questions about your financial landscape. For instance, do your expenses exceed your income? If they do, what are ways you can fill in the gap? Maybe you can slim your grocery budget or still treat yourself to your favorite latte but limit the number of times a week you do so.  
Look at some of the perks of military life that can help save money, like using the base gym for free. Perhaps this means keeping your favorite streaming service but lowering the plan you are on. Remember, reducing does not mean cutting out completely. Even the smaller amounts you save count. 

Step 5: Implement Your Plan 

Now is the fun part: ACTION! What steps will you take to ensure you stick to your plan? It could involve setting up different accounts, or even some lifestyle changes like utilizing a cash envelope system, or choosing one weekend as “free entertainment” only.  
The goal here is to do what you feel comfortable with for you and your family, which allows you to save in a realistic, sustainable way. 

Step 6: Be Consistent 

Military life is busy, and sometimes it can be hard to be consistent with everything this life throws our way. However, setting time to review your Spending and Savings Plan is vital to the financial side of things like PCS moves and some of the other financial commitments military life can bring. Have a 'Money Date" or scheduled financial wellness check-in and invite any significant others with whom you make financial decisions. Yes, this means even if it is over Facetime! 
Do these check-ins monthly at a minimum, but weekly would be ideal — especially as you start out to ensure you’re staying on track, making changes in real-time, and just overall easing into a new way of saving successfully, reducing your debt, and getting on a path to building wealth. 

Let Military Saves Walk You Through 

Do you still need help with your Spending and Savings Plan? Let us walk you through our self-paced but guided workshop, "6 Steps to Establishing a Spending and Savings Plan for Your Military Lifestyle". It's FREE, on-demand, and we will walk you through it step by step with additional explanations that further break down the process. Register here.