Financial stability is a cornerstone of a strong military family. With unique challenges like frequent relocations, deployments, and transitions, military spouses often play a critical role in managing household finances. Here’s a guide to help military spouses navigate financial planning effectively and set their families up for long-term success.
1. Understand Your Military Benefits
Military families have access to a wide range of financial benefits. Understanding these resources is the first step toward effective financial planning:
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Basic Allowance for Housing (BAH): Covers housing costs based on your service member’s rank, duty station, and dependency status.
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Commissary and Exchange Privileges: Save on groceries and goods by shopping at commissaries and exchanges on base.
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Healthcare (TRICARE): Ensure your family’s health needs are met with comprehensive healthcare coverage.
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Tuition Assistance and GI Bill: Take advantage of educational benefits for both service members and dependents.
2. Create a Budget
A clear budget is essential for managing income and expenses, especially with the unpredictability of military life.
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Track Income and Expenses: Include all sources of income, such as military pay, allowances, and any additional earnings.
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Plan for Fixed and Variable Expenses: Account for recurring costs like rent or mortgage, utilities, groceries, and childcare, as well as variable expenses like travel and entertainment.
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Build an Emergency Fund: Aim to save 3-6 months’ worth of expenses to cover unexpected events like car repairs or PCS-related costs.
3. Plan for Relocations (PCS)
Permanent Change of Station (PCS) moves can disrupt finances. Preparation is key:
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Understand PCS Entitlements: Learn about reimbursements for moving costs, Dislocation Allowance (DLA), and temporary lodging expenses.
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Minimize Out-of-Pocket Costs: Stick to the military-approved moving companies and file claims for damages promptly.
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Adjust Your Budget: Account for changes in housing costs, school expenses, and local cost of living.
4. Save for Retirement
While the military’s Blended Retirement System (BRS) provides retirement benefits, military families should actively plan for retirement:
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Contribute to the Thrift Savings Plan (TSP): The TSP is a low-cost retirement savings plan with options for both traditional and Roth accounts.
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Leverage Matching Contributions: Under BRS, the government matches contributions up to 5% of basic pay.
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Plan for Civilian Retirement: If your service member transitions to civilian life, ensure your savings strategy accounts for a post-military career.
5. Manage Debt Wisely
Military families often face unique financial pressures, making it important to keep debt under control:
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Avoid High-Interest Loans: Steer clear of payday loans or other high-interest borrowing options.
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Use the Servicemembers Civil Relief Act (SCRA): This law limits interest rates on certain loans and provides other financial protections.
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Pay Down Credit Card Debt: Prioritize paying off high-interest debt and avoid unnecessary new charges.
6. Take Advantage of Financial Education and Counseling
The military offers numerous resources to help families improve their financial literacy:
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Personal Financial Counselors (PFCs): Available at most installations, these experts provide free financial advice.
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Military OneSource: Access financial tools, calculators, and consultations.
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Workshops and Seminars: Many bases offer classes on budgeting, retirement planning, and more.
7. Protect Your Family with Insurance
Having the right insurance coverage ensures your family is protected against unexpected events:
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Life Insurance: Consider policies like Servicemembers’ Group Life Insurance (SGLI) and Family Servicemembers’ Group Life Insurance (FSGLI).
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Health Insurance: TRICARE offers a range of plans tailored to different needs.
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Renter’s or Homeowner’s Insurance: Protect your belongings, especially during PCS moves.
8. Prepare for Deployments
Deployments can impact family finances, so it’s important to plan ahead:
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Set Up Automatic Payments: Ensure bills are paid on time while your service member is away.
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Update Legal and Financial Documents: Review powers of attorney, wills, and access to bank accounts.
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Save Deployment Pay: Consider setting aside extra pay, such as Hostile Fire Pay or Family Separation Allowance, for future goals.
9. Plan for Education and Career Goals
Military spouses often face career interruptions but can still plan for personal and family growth:
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Use MyCAA: The My Career Advancement Account program provides up to $4,000 in tuition assistance for eligible spouses.
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Build a Portable Career: Consider remote work, freelancing, or fields that accommodate frequent relocations.
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Start an Education Fund: Save for children’s education using a 529 plan or other savings vehicles.
10. Review and Update Your Plan Regularly
Military life is ever-changing, so your financial plan should adapt:
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Schedule Regular Check-Ins: Review your budget and financial goals quarterly or after major life changes.
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Stay Informed: Keep up-to-date on military pay changes, benefits, and resources.
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Seek Professional Advice: Consult financial advisors experienced with military families for tailored guidance.
Final Thoughts
Military spouses are the backbone of their families’ financial stability. By staying informed, planning ahead, and taking advantage of available resources, you can create a solid financial foundation that supports your family’s goals and dreams, no matter where military life takes you.
Written By: HelpVet.net
Photo Credit: Canva
