For military spouses who move frequently, seasons without two incomes are extremely common. Whether you find yourself unemployed for a few months after a PCS or have chosen to not work or be a SAHM at your current assignment, setting your finances up so that you are living on one income all the time will give you the freedom to decide what is best for you and yours, and hopefully alleviate a lot of stress. K and I both have been in this position and have learned some lessons on what to do while you have a job – as well as when you don’t – that can help set you up for success.
1. Set your cost of living based on one income
If you are both working, it can be easy to think that you should now have double the spending power…right?? But if you do this, your cost of living will have to drastically change once you are no longer in the workforce and there is a high chance of resentment to grow in your relationship due to this change in lifestyle. Limit your cost of living to the BAH that you are granted at your base/rank and try not to exceed it and then be sensible about all other expenses.
2. Build a budget
This can seem daunting, especially if you are not comfortable talking about money, but this is a crucial step in the preplanning process that can drastically change the nature of your future financial conversations. I personally appreciate the freedom that the parameters of my budget gives me. Instead of feeling like I’m stuck in a cycle of shame with every swipe of my card, I feel empowered by the control I have over my finances as I am telling my money where to go.
I suggest creating categories for all of your spending and writing them down. Groceries, date nights, savings, gas; even include a “Stuff” category for those miscellaneous Amazon purchases. Mentally add up about what you think you spend on that each month or just go to the previous month in your bank account and work your way through that months spend (WARNING, this can be painful but very eye opening!!).
At the end, add up your totals and subtract it from ONE INCOME. If this number is over that one income, look back through it. I believe that it is important to tell your money where to go, not to let your money rule you. Try to see where you can cut back – but be reasonable with yourself. Unless you have a chunk of debt to pay through, you still want to enjoy yourselves and not resent each other just because you put the lid too tight on your spending.
3. Save 10-15% of your spouse’s income
When setting up your budget, I like to set aside my savings money first. Contribute what you can each month to retirement but with the leftover percentage, dump that into savings. Doing this will ensure that you are taking care of your long-term savings and your short-term (2-10 year) savings. If you are currently a two income family, pay off your debts with that secondary income, then filter the rest in to savings (a general savings account that is not necessarily long-term or short-term). This will also secure that when you are no longer working, your savings will continue to grow because you are living a lifestyle that accommodates 10-15% of savings from one income-even if it’s at a slower rate.
4. BE REASONABLE
Once you don’t have a job, be reasonable with yourselves. If you think this road may be long and your savings on one income are lower than you would like but you are still eating out multiple times a week, create guidelines. Maybe pledge to have only one meal out a week. Try to find dates that involve a cup of coffee and an afternoon spent outside. Still have fun, but you may just need to be a little more creative.
Finances can be a tough topic for many people no matter what rank you are in. But it is a HUGE factor in how we function, with our health and in our relationships. These are some of the tools that we utilized to help us as a family enjoy my time away from work instead of spending that time being anxious, resentful and generally just wishing it away.
