Inside: How your military family can start a budget
Are you sitting down?
Did you know that more than 620,000 military families have visited a food pantry just to feed their family? That’s twenty-five percent of the nation’s military personnel (includes active duty, reserve or guardsman) that are struggling to get by.
Struggling to afford basic necessities.
Budgeting has never been more important than it is now. There are so many necessities that strain our budget between groceries, clothes, and those unexpected expenses that always pop up at the worst moment.
I’ve been there. I’ve worried about things like affording baby food, paying medical bills, trying to decide which bill I could pay and which one could be late.
I’ve also worried about “less-important” things like how many gifts I could get our son at Christmas and giving him a fun, Pinterest-worthy birthday party.
I know what it’s like to swallow my pride and ask for help. None of it feels good.
The good news is that starting a budget is not that hard and sticking to it is easy as long as you set up a good foundation.
Identify your areas of weakness
My husband actually learned this trick in Basic. I always recommend this as the very first step in setting up your budget.
To do this you will need to print out your 30-day bank statement. Get out a sheet of paper and a set of highlighters. Next, divide your spending into categories that you can color-code.
- Pink highlighter: groceries/food
- Yellow highlighter: gas and car necessities (like repairs- NOT things like stereo systems, car washes, etc)
- Green highlighters: non-essentials
- Blue: medical expenses
- Purple: INCOME
Note: this is just an example, make your color code relevant to your spending (i.e. I have next to nothing for medical expenses on a monthly basis *knock on wood* so I would likely not have that category)
This is important because it will give you a visual to where your spending is going. A lot of times (such as in our case) we would spend a lot of money on low-cost things.
$2.50 for soda at the gas station, $1.07 for a coffee, $14.58 for fast food, etc. until you add it up at the end of the month and realize that’s where $427 went (that’s more than a car payment!).. and yes, I’m speaking from experience.
Maybe you spend too much on clothes, or you go out to eat too often. Either way, once you identify your area of weakness, it’s easier to tackle.
Everyone’s brain works differently. Everyone has their own “system” of organization. Find whatever works for you and stick to it.
Personally, I am a “pen and paper” type person. I like to work things out on paper. Some people like to use a regular notebook however, I disagree with this at least at first.
Unless you’re a rockstar at budgeting and can totally figure it out for yourself, I highly suggest getting a budget workbook like this one. This particular workbook is fool-proof and walks you through everything thing you need to do (step-by-step) to set up a foundation for your budget and keeps all of your info organized (like income and monthly bills, etc).
I could go on for an entire blog post about that workbook, and I probably will at some point but for now I’ll keep it brief and just say it’s awesome.
Once you get the hang of budgeting and it becomes more of a routine, you can switch to another method like:
- a notebook
- a spreadsheet (or google sheet)
- an app like YNAB
Identify income and expenses
A big mistake that people make when setting up budgets is just writing out what is going out without thinking about what’s coming in.
Yes, you need to get your monthly expenses in order. But before you do this, you need to identify your income.
This becomes even more important when you have multiple sources of income or if you have irregular income.
Go back to your first exercise (the bank statement one). You should have already color coded all the money coming into your account. Add it up to determine your monthly income.
Once you know your income, you can start dividing up your expenses into three categories:
- Fixed (monthly essentials like rent, gas, etc)
- Variable (non-essentials like haircuts and going out to eat)
- Non-monthly expenses (like oil changes)
Again, a good workbook can help lay this out for you and teach you how to stay ahead of this and plan for each type of expense.
I am methodical about “assigning” our expenses to our income. We get paid on the 1st and the 15th (most military families do too) so I assign the bills that will be paid with each paycheck. This way, I know exactly when each bill will be paid, and how much will be left over.
Identify your goals
My goal was always to be able to stay home with my son. Your goal might be the same or it might be very different. Whatever your goals are, you need to identify them and break them down into actionable steps.
The first step to this is to set a timer for 5 minutes and write down everything you want. Don’t think, just write. You might surprise yourself.
Once you have a list, prioritize it and identify your top goals. Then break those goals down into manageable bites.
Start cutting expenses
Now that you know where you are and where you want to be, you can start laying out a plan of attack. How are you going to reach your goals?
What areas of your budget can you cut in order to help you get ahead?
(Side note: our military savings transformation course actually walks you through every aspect of military life and shows you where to cut expenses in each area, plus it’s FREE to sign up for!)
Sometimes you simply can’t cut out an expense and that’s okay. I can’t simply cut out internet, I need it to run my business.
You can, however, substitute certain expenses so that it feels less like a sacrifice.
Here are just some substitutions that have worked well for us:
- Using Netflix and Hulu instead of Direct TV
- Ordering To-Go restaurant food instead of sitting down to eat (no tip, no charge for drinks, and you can usually find promo codes at retailmenot.com.. I do this for Olive Garden pretty much whenever we feel like “eating out” and it ends up costing half as much as actually going to Olive Garden)
- Buying ebooks or renting from the library instead of hardcopy books
- Purchased clothes (or kid toys) from consignment stores instead of new
- Using white vinegar instead of fabric softener (no, it doesn’t make your clothes smell weird)
- Using wool dryer balls instead of dyer sheets (also cuts down drying time and you can add essential oils to the dryer ball if you want a scent)
Look at your bank statements. What can you substitute?
I bet you will be surprised how much you can save without even realizing it.
It’s so unbelievably easy to “fall off the wagon” when it comes to budgeting. Especially if you have a particularly good month and have extra money left over.
If you are a subscriber and belong to our private Facebook group, you can find accountability there. You can ask if someone wants to be your accountability partner, or you can just share with the group your struggles and wins.
You can also have family meetings with your spouse and be each others accountability partners. This is a good idea anyway to make sure you’re on the same page, however, if your husband is like mine- well, I know your struggle!
Other ways to find accountability is to talk to a friend or family member in similar financial situation that you trust and can be open with without judgment.
Establish your foundation
You don’t have to be one of the 25% of military families struggling to provide for your family.
I swear there was a time that I literally had no idea how we were going to get through the month.
I distinctly remember the day that I realized I was choosing which credit card to put extra money towards, instead of having to choose which bill to pay. That’s a win, especially when we had spent so long living paycheck to paycheck.
Once you get down the basic foundation of budgeting, you are setting yourself up to get ahead. You will identify and tackle your weaknesses, get organized, outline your income and expenses, set goals (and crush them) and start cutting expenses and saving money.
You can do this.
I know you can.
I invite you to challenge yourself, take the next step and let me walk you through how you can save money in every area of your budget like groceries, kids, PCSing, deployments, insurance, and more. Sign up for our savings course below!