5 Money Mistakes Military Families Make
One of the biggest benefits to a deployment is the extra money. I am not going to lie. If you are going to send my husband away, I am glad you are giving us extra money for it. With extra money comes choices. You have to decide how you are going to spend that extra money.
Some people spend all of it. Others save or pay off debt. Some use part of it for an after deployment trip. We have done all of thee above and during our third deployment we even saved for buying a house.
As I look back over the years, I know we have made quite a few money mistakes. Big ones. Small ones. I think it is easy to do when living the Military lifestyle. But the reality is you have to be smart about every penny that comes into your house. You can’t take anything for granted. You can’t assume that you will always make as much as you do or get too comfortable with any type of temporary pay. COLA, jump pay, deployment pay or anything else doesn’t always last forever.
Here are five mistakes Military families make when it comes to money.
- Spending it all on extras during deployments- This is a hard one. Your spouse deploys and suddenly you have a lot more money in your budget each month. You are also pretty sad. So sad sometimes that you just want to do something, anything to feel better. So what better way to get happy then to shop, right? Well the reality is it can be way too easy to use shopping as a way to feel better. Retail therapy can be important but you really have to stick to your budget. Don’t overspend the deployment pay just to feel better. Having a plan about where you want the extra money to go is a must to help avoid this. If you know that most of your extra money is going into savings each month, you are not going to go out and spend it.
- Assuming a promotion is right around the corner This was one of our mistakes. Assuming that a promotion was going to happen soon and planning for that. Then when it doesn’t come you can find yourself in a bit of a bad situation. I would also add that when that promotion does come you don’t immediately upgrade your lifestyle. That can get you in trouble too. A promotion doesn’t mean you get to upgrade everything. Focus on paying off debt, savings or anything to help your future when the promotion finally does come.
- Buying big after a deployment- I remember that the PX in Germany always got a ton of new big screen tvs in towards the end of the deployment. They knew what the soldiers coming home from Iraq or Afghanistan after a year away would want to buy with their extra money. It’s so easy to want purchase a lot of big things when your spouse comes home. You feel like they deserve it. You feel like you can justify it. But think long-term. Can you find a smaller item that they would like just as much? What are your long-term goals and does buying a big screen tv fit in with them? It can be so hard to not want to buy something big after a deployment but sometimes it is wise not to.
- Not saving enough for a PCS- Whenever you move with the Military it can be easy to think you don’t need a lot of money to do so. The Military is packing you up right? Well the answer is you do. You need to have some extra money. For anything that could come up. Not planning ahead can get you in trouble. Save as much as you can, especially if you are coming back from overseas, try not to overspend and stay under your weight allowance.
- Not paying off debt with extra money- It can be hard to focus on debt sometimes. You gain a little extra money and you want to use it on something fun or exciting. Debt is neither of these things. But as a Military family, you have the chance to get ahead. Anytime your spouse gets extra money you should use it to pay down debt. I know we would be in a much better situation these days if we had done that from the start of my husband’s Military career. It is a lot better than buying more or thinking you make more than you do. Extra money is temporary and you should treat it like it will be gone the next day.
Paying down debt and then building up a savings should be very important to Military spouses. You never know when your spouse will have to transition out of the Military or when things will change.
Nice! And true! I have a blogpost started on sharing how we’re out of debt. It’s very easy to want to spend all the extra money, but you shouldn’t.
Yes, I hate debt and wish we would have made difference choices during the times we got extra money.
We have been gultiy of only one of those; the paying off debt one.
We are bad about it but we have been trying to get better at throwing our extra money that way!
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You always just have to keep working towards it. It’s hard sometimes.
Great advice, especially about not splurging away the extra deployment pay. I would add that in addition to saving that extra money during deployment, you should put $10,000 into the Savings Deposit Plan. That’ll get you an extra $1,000 free!
My #1 tip for saving money as a military family is to invest as much as you can into the TSP. It’s the lowest fee account I’ve ever seen, plus it offers tax sheltered benefits.
Good idea! Investing is great and so nice that the Military gives you some great options to do so.
We keep a “mental” budget at all times! I know it can be tough, because sometimes mental can mean overly flexible, but it really works for us! When we are at the store, we stick to a list of what we need, and when we do splurge-shopping, we make sure we stay within a reasonable amount, and space it out month-by-month. It helps our monthly bills stay relatively the same, and allows us to put extra money aside for savings.
more of my Army life at: jjheartblog.wordpress.com