5 Painless Ways to Build Your Military Family’s Emergency Savings

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emergency savings jar for military familiesBetween 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.

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