Sunday, March 4, 2012

Military Monday-How to Make Ends Meet on Military Pay (Part 1)

Most military families that I meet are either temporarily (because of a recent PCS) or permanently a single income household.  Which a lot of the time means living from paycheck to paycheck, especially if you have debt and children.  My family just recently became a two-income household as well as facing a promotion soon, so we are much looking forward to an increase of cash in our bank account.  But before I got a job we managed very well to keep cash in our accounts for the past year and a half all the while stashing money in our savings account.  I am proud at how well we have managed and I thought I would share a couple of tips on helping keep your account balances up.

Since there is so much to cover I will break it down in a couple of posts so that you don't get overwhelmed in reading and I don't get overwhelmed in writing.

1.  Look at where your money is going.
             I'm not sure what other banks have to offer on their websites but if you bank with USAA they have a plethora of information on where you're spending your money and budgeting.  Some of the things that you should pay special attention to when evaluating your spending includes:
  • Insurance Policies (auto, renters, personal property, etc. etc.):  Every year or so you should make a couple of phone calls and see if there are policies that are cheaper and make sure that if you want to keep your insurance company that there isn't anything that needs to be adjusted or any additional discounts that could be added.
  • Eating Out (fast food, restaurants, 7-11 or other convenient stores):  Eating out is a big problem that always deflates cash in your wallet.  Subway is a common weakness of ours that we indulge in often, I haven't recently looked at how much we spend monthly on eating out but about a year ago I went through all my monthly bank statements to look at our spending and realized we were spending anywhere from $50-120 PER MONTH on this!  How much are you spending?
  • Entertainment (movies, date nights, etc.): Having a date night is essential in keeping a happy marriage.  It allows you to reconnect with the one you love and keeps the flame alive.  That being said, if you find yourself crunching numbers to try to pay the bills every month you might want to re-evaluate how much you spend on dates.  Rather than going to a movie where you spend $10 per person to get in (not to mention the obscene costs at the concession stand), why not rent a movie and have a romantic night snuggling on the couch?  Dates can still be fun and or romantic without dishing out a ton of cash.
  • Bills/Utilities: Utilities can be a tough place to cut down.  If you are living on-post then you wont have to worry about this, if not, check how much you are spending in power and water.  Maybe you need to cut your 40 minute showers down.  Or during the summer, it might be a good option to turn up the thermostat a few degrees.  If you need your long showers and cool home, just look for another area to trim the fat.  Another bill that might be overlooked is cell phone service.  My husband and I had to make a decision when shopping for cell phone providers and ended up settling with second rate phones on a prepaid plan.  But going this route easily saved us 100 euro a month.  Look at your plans and the amount your spending and adjust accordingly. 
  • Impulse Shopping (ahem, Target and Walmart addicts):  How much money do you think you spend on those impulse buys while shopping?  If you're like most people I know, you can probably walk into Target and come out with $40-100 of things you really didn't need.  I am guilty as charged with this one.  If you want to get serious about saving money, be sure to control how quickly you swipe that credit card for junk that isn't going to get much use anyway.  If it takes discussing with your spouse about every little purchase to justify the importance of it, so be it.
  • Travel: For the military, especially when living apart from your loved one, travel can take up a large chunk of your pay check.  When I was living in California and my husband was in Georgia, we would spend on average $400 a month on travel.  Now that we live in Europe and are trying to see everything humanly possible before we leave, that number doesn't move much.  If you need to prioritize your spending this is a good place to start.  Start looking for airfare deals that can cut your spending drastically, start packing meals for on the road versus stopping for fast food, limit the number of trips that you take, if in Europe plan 3 months in advance so you can get AWESOME deals on train fare.  
Looking at where you spend your money and where your priorities lie is the first step to creating and sticking to a reasonable budget.

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