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What You Can Learn From a Military Mom Budget

Life as a military family can be tough financially—and hearing the rumors of budget cuts and government shutdowns doesn’t help matters much. Even though there are reimbursements and special benefits of military moving (free movers and transportation of your goods is a big one), moving every two to three years can be costly for a young family.

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In our moves we budget to spend between $2,000 and $4,000 on transportation, meals, travel costs and the little things that the new house will need—or which the old house needs fixed before leaving. Setting that money aside is difficult, especially if you are saving for other big ticket items like homes, cars or vacations. Depending on rank and station, some families are comfortable saving a large chunk of each paycheck, but the majority are living paycheck to paycheck, without setting aside any funds for emergencies. If at all possible, building a financial safety net is an important step for your daily life and long-term goals.

1. Track your spending. If you don’t know where your money is going each month—and how much is going to necessary expenses vs. momentary wants—you could keep a spreadsheet by hand, or use a Web site like Mint that tracks your accounts automatically.

2. Look at your spending patterns and then make a budget based on your income and necessary expenses. It sounds obvious, but it is important to set aside the money to pay for rent, food, utilities and your monthly debt payments before adding budget items for travel, nights on the town and shopping sprees.

3. As you create your monthly budgets, build in your debt payments and pay off any extra you can each month. If you are able to buckle down for a few years and keep expenses in check, the interest on your debt will not keep adding up and you’ll ultimately have more money to spend on fun things down the line.

Getting to the point where you aren’t anxiously waiting for the paycheck to arrive is important for managing your financial stress

4. Having a savings account is step one to building an emergency fund and creating that safety net for your family. Start by setting aside 5 percent or $50 a month, or whatever income you can spare. Experts recommend setting aside three to six months of expenses in case of emergencies (like unexpected pay delays or accidents). It can be overwhelming, but slowly adding to your savings is doable—and those $50 payments will add up to $1,000, then $5,000 and so on.

5. As you develop your emergency savings, also start setting money aside that equals your last paycheck. It will take time to build up the reserves, but getting to the point where you aren’t anxiously waiting for the paycheck to arrive is important for managing your financial stress and ensuring that you aren’t living paycheck to paycheck.

6. Just like civilians are encouraged to contribute to 401(k) or IRA programs, the military offers service members a Thrift Savings Plan along similar lines. Even if you are in your 20s and cannot imagine the day that retirement will come, contributing now will give you a long series of compounded interest that boosts the savings you collect upon retirement. Especially in recent years, people are concerned about investing in retirement when the market is so volatile, but the TSP is based on the index funds and not actively traded on the market, making it much less risky and more beneficial in the long-term.

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7. Most importantly? Talk about finances as a family and make sure that both you and your spouse (and even age-appropriate children) understand the importance of budgeting and planning for financial success. Setting up the financial systems that work for you would be a waste of time if your family didn’t help follow and manage the structure so you can work together toward financial security. Having everyone on board is an important step toward paying off debt, building savings and planning for things like homes, vacations and even college savings.

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