How Can Military Families Achieve Financial Stability?
No military family’s finances are the same; whether you’re facing another round of PCS orders or wondering when your partner will be deployed, financial hardship for military families in the U.S. is a reality. Such circumstances can be challenges to budgeting and financial planning.
However, this does not need to be the case for military families by using solid strategies that can help create financial stability and secure futures. This article explores common challenges, debt management tips, and the benefits of options like a military debt consolidation loan to streamline finances.
Financial Challenges to Understand
Due to frequent moves associated with the military lifestyle, spouse employment opportunities can often be interrupted, and housing and relocation costs will increase. Deployments can also come with unexpected expenses, like childcare and home maintenance, or create emotional stress, affecting how well we make financial choices.
Debt from credit cards or personal loans and unexpected medical expenses also plague many military families. Suppose you have several debts with differing interest rates and payment due dates. In that case, you know exactly what I am talking about: it is an overwhelming task, especially if you are in a time of transition or deployment. Because of these financial stressors, military families must now take steps to develop financial stability.
Creating a Solid Budget
The first way to have control over and master financial stability is by drawing up a complete budget, including regular and variable expenses. Keeping the families consistent with a budget will keep them from overspending and help them achieve their financial goals quickly.
Financial tools and apps designed to make budgeting easy can help military families, too. Many apps allow users to set spending limits, and the platform tracks their spending in real-time and lets them know where to cut back.
Managing Debt Effectively
Debt is a big blocker to financial security for many military families. However, high-interest credit card debt or loan payments can quickly spiral out of control. Families need to prioritize debt management to regain control.
The debt snowball method works well—you pay off smaller debts first and then continue to pay enough on the remaining ones until you slowly but surely close the distance on the larger ones.
A military debt consolidation loan involves several debts combined into one debt at a lower interest rate, which lowers the total monthly cost and simplifies the payments. However, some providers of consolidation loans to service members include add-ons such as adaptable terms or no prepayment penalties.
Leveraging Military Benefits
Military families can easily benefit financially from benefits that ease financial stress. Many find creative ways to make it work, like taking advantage of the Thrift Savings Plan (TSP), a low-fee military retirement savings plan that matches contributions to some service members. Other educational benefits, like the GI Bill, can also help offset family and service members’ costs of college.
Another good service is financial counseling. Most military installations will pay you to see someone for free to help you with a budget, debt management, and long-term planning. Families have their decisions made for them, and choices are available.
Building an Emergency Fund
Having an emergency fund is helpful for maintaining financial stability. It acts as a safety blanket for the unexpected—car repairs, medical bills, and a sudden need to travel. Therefore, if your family is also military, your emergency fund should contain anywhere from three to six months’ worth of emergency expenses.
First, establish small, digestible savings goals that you can achieve—like saving $500 or $1,000. Once you automate savings contributions, it’s easier to build that fund over time. Some expenses, such as commuting and dining out, can decrease during a deployment, which creates opportunities to increase savings.
Planning for the Future
For that stability, you need long-term financial planning. Military families should regularly review their financial goals, like homeownership, education savings, or retirement. Having a plan in place to achieve these goals even during life transitions is best.
Education and professional development investments in service members and their spouses can also help increase long-term financial security. Military families can benefit from many military-friendly institutions that offer scholarships, grants, and, most of all, reduced tuition rates.
Conclusion
As a military family looking to reach financial stability, you must be mindful of active budgeting, paying down debt, and laying the groundwork for the next step.
Tools like a military debt consolidation loan can simplify finances and reduce the burden of high-interest debt while leveraging military benefits and building an emergency fund, which provides additional security. Fortunately, military families have the right strategies to leverage to ensure a smooth transition from one financial situation to another and work towards a financially secure future.