This week, I have been working on our family finances. A lot has changed for us with this deployment budget-wise and now that things are finally getting settled, it’s time for me to re-evaluate and start focusing on our goal of home ownership. I will offer the steps I took and the plan I made. The tips I offer here can really be used for any person when any major change is made to a family’s finances, not just a deployment.
First, I sat down and looked at our spending over the last month. I noticed that I’ve been doing a lot of mindless spending on eating out and shopping. My husband has also been spending mindlessly. So I plan to start a spending fast for April (Rachel talks about her experience doing this here). We decided that outside of bills, we’re going to use CASH only. When the cash is gone, that means you are done spending until the next pay period. I plan on splitting my CASH between fun, eating out, and gas money (using the envelope system), while I know my husband will just take his money and use it however he sees fit until it’s exhausted. The important thing is doing what works best for YOU.
Next, I wrote out our budget. A lot of our bills have changed since moving/deployment. We no longer have a large cable bill, but instead both pay for just internet. Our cell phone bill halved when Joseph had his suspended (see more about this below), but then I had to up our minutes because talking to him on the phone is no longer mobile-to-mobile and I was risking going over our minutes. Plus, his pay increased because of special deployment pay and the fact that we no longer use our BAH (housing allowance). I calculated the amount in versus the amount out (including: bills, necessary spending, and savings). I found there was nearly an extra $2800 a month that I couldn’t account for! How crazy is that?!?!? Now, that doesn’t account for the emergency situations, but that’s why we throw money into savings!
Then, I did some re-organizing of our plan– I used the worksheet from our first Mommy Workshop that works through the Dave Ramsey debt snowball. I listed all of our debts lowest to highest and determined we should be able to pay my student loans off this year easily! Also, I pulled our credit and saw it has gone up nearly 20 pts since we bought our car in December, so I think I may apply with our bank for a refinance to get a lower rate. Ideally, I hope we pay off our car by mid-to-late 2014, but a lower interest rate is always helpful.
Finally, I plan to do the housekeeping on our savings and try to cut costs as much as possible. My husband’s TSP account is currently our only retirement account and we aren’t being risky with it at all. So this week, I need to get in there and play around with some investments. I’m also planning on opening an IRA with our bank. I am “hoping” for a raise in July that will be automatically deposited in the IRA until all of the debts are paid down and we can focus on retirement savings. I attended the Mommy Workshop on Couponing the other day, and plan to start clipping to save some green. I also need to get back into meal planning!
Overall, I think we’ve taken a step in the right direction. There is a lot more to learn and I’m sure I will roll with the punches! But it’s good to know we have a plan!
Here are a couple of deployment tips that I’ve learned thus far:
1. Study your husband’s LES. Chances are he’s not really looking to make sure he is being paid correctly, so you need to make sure he is. I have heard plenty of stories about the military overpaying and then coming back to take all that money! So stay on top of it.
2. If you can afford to, have extra pay from deployment automatically put in your retirement or savings. I believe that if you can pay off debt first, do it. But if you don’t really have much debt, totally put that money in savings. Out of sight, out of mind!
3. If your spouse is going to be gone an extended amount of time, open a separate checking account for him. I’m still kicking myself that we didn’t do this— lesson learned.
4. My husband and I made a budget before he left, which I promise was a complete waste of time. So many more finances came up or didn’t add up to what we thought. Definitely discuss your financial goals before deployment, but don’t plan a budget until after he leaves!
5. Use all of the awesome resources out there. My personal favorite is Military One-Source. They have tons of articles about Money Management for Military and you can even call and speak with a real financial counselor for free to help you organize your budget/money/life. I promise, they’re amazing. USAA also offers free financial counseling.
6. If your spouse is being deployed somewhere where they will be unable to use their cell service, they can have it put on hold (which means you don’t pay it but don’t accrue a fee). Also, some credit cards (like USAA) reimburse you for the interest accrued on your card during deployment. For other USAA deployment benefits click here. Make sure you do your research! These may seem little but they really do save you money!
7. Last but not least, use all the military discounts you can! For instance, the YMCA offers free annual family membership while your spouse is deployed. Only fine print is that you must have eight visits a month…. however, each person on each visit counts as one. Easy! It doesn’t make it better, but it definitely helps to have things to do/ways to stay busy when you are missing him!