When it comes to money, milspouses know exactly what is going on! We know the paychecks coming in and all the bills we have going out. We (hopefully!) have a budget plan for the month with other activities going on that we need to be able to pay for. And when it comes to the end of the month and money is getting tight, no one knows better how to make a dollar stretch than a milspouse! [Read more…]
Between PCSing, TDYs, deployments, and short tours Military Spouses are often responsible for their military family’s budget. It’s no easy feat making sure there’s money in the bank and the bills get paid. Most of us can attest to the fact that as soon as our service member hits the road, a new house guest comes to visit: Murphy’s Law.
From problems with military pay to unexpected car repairs, we are no stranger to the danger of Mr. Murphy. While there’s no way to predict when Murphy’s Law will strike, there is one guaranteed insurance policy against the unexpected: Emergency Savings.
Did you know? You should set aside 6-9 months of your living expenses (read: essentials) into emergency savings.
Does your military family have an Emergency Savings account? If your answer is “no” you’re not alone. Lucky for you we have 5 tips to help you build your military family’s emergency savings.
5 Tips to Build Your Military Family’s Emergency Savings
1. Use Your Tax Refund
Immediately deposit your tax refund into a savings account and don’t look back! Or, if you have some debt to pay down, split your refund between debt repayment and savings. Something is better than nothing.
Make sure you make the most of your 2012 tax return by checking out our Tax Guide for Military Spouses
2. Set up an Allotment from Your Paycheck
I am a firm believer in out of sight, out of mind. If you can stash away money before you get to see it, you’re less likely to spend it. Are you a serial account transfer addict?? Don’t stash your emergency savings at the same bank as your checking account. By separating the accounts, you’ll be forced to carefully consider your motivations for transferring funds.
3. Set up an Automatic Transfer from Your Checking to Savings
Most financial institutions have online tools to setup transfers between accounts. Put your savings on autopilot and make it easy on yourself!
4. Save a Raise
Military pay typically increases annually and promotions are relatively regular. Rather than increasing spending to match the raise, calculate the difference in pay and stash it away! You were living without it before, right?
5. Don’t Budget With Your Military Spouse Income in Mind
You and I both know how unpredictable our employment situation can be. As military spouses, we don’t always have portable careers with regular salaries. Rather than live in a constant flux of budgeting with and without your salary, just bank your salary altogether.
As a financial counselor, my number one rule is budget using an income you can count on. No more. And always less.
Emergency Savings What Ifs
Even if you are working on your emergency savings goals or have actively saved money for an emergency, it doesn’t mean that you’re 100% protected. Take these examples:
I Don’t Make Enough Money to Save
“I don’t have/earn/make enough money to save.” I can’t tell you how many times I’ve heard this line as a financial counselor. It always stops me in my tracks, no matter who it’s coming from. And any time I hear it, my first thought is, “Yes, you do. You can save. It’s all a matter of choice and perspective.” Learn how you can save money on a tight budget at Military Saves by reading You Can Afford to Save (and Here’s How to Do It).
An Emergency Wiped Out My Emergency Savings
That’s okay! Imagine what would’ve happened had you not saved for an emergency? Emergency savings is there for emergencies, so if you get wiped out, guess what? Start over and keep going. Saving is a constant work in progress. Stay the course and you will rebuild again.
My Emergency is Bigger than My Savings Account
This can be extremely frustrating. If your emergency outpaces your savings, whatever you do, do not seek out a payday loan, title loan, or paycheck advance. As a member of the military community, there are organizations that exist to help you through a situation like this. The Air Force Aid Society, Army Emergency Relief Society, Navy Marine Corps Relief Society, and Coast Guard Mutual Assistance provide emergency assistance to military families through grants and interest free loans.
We posted a Dave Ramsey Daily Tip pic on our Facebook page and the conversation definitely took off! Regardless of where you fall on the spectrum of how you manage love and money, we love that our NextGen MilSpouse community members know how to share their perspectives with respect.
We thank you for that.
Love and money is definitely one of those topics that whips us all into a frenzy…kind of like talking about sex. Personal finances can be a touchy topic for any couple, but it doesn’t mean that they can be ignored. Talking money with your honey may not be your idea of a romantic evening, but not talking money in your relationship is a red flag and can lead to relationship problems in the future. [Read more…]