Military finance: How to create a family budget after military service

July 05, 2023

Creating a family budget might look different for military members than it does for civilians. Here’s what you should keep in mind when you return from military service.

Whether you’re coming back from an overseas military deployment or leaving a full-time domestic service position, returning to civilian life is a big adjustment. As your transition out of full-time military work approaches, remember that managing your money will look different, and that you may have to adjust your family budget to stay on track with your financial goals. Here’s how to get started with these military finance budgeting tips.


1. Identify new expenses post-military

One of the benefits of being in the military is the allowances that your branch provides on top of your salary. You might be used to having stipends for food and housing along with additional funds from programs like Family Separation Allowance, Combat Zone Tax Exclusion, Hostile Fire/Imminent Danger Pays or Hardship Duty Pay. These benefits go away once you leave the military, so it’s especially important to create a budget before you transition back to civilian life.

As you prepare, remember that your cost of living will likely increase as a civilian. Make a list of all your expenses that will increase, like food and housing, and another list with brand-new expenses, like transportation costs and insurance. Now, you’re less likely to be surprised by new costs and end up spending outside your budget.


2. Track your spending before and after military service

It’s difficult to predict exactly how much more life will cost outside of the military — especially if you’ve been an active service member for a long time or you’re moving to a new place for your civilian job. That’s why tracking your spending while you’re in the military and again when you’re out is so important: It gives you a more accurate picture of how much it costs to maintain your quality of life.

Start by keeping a closer eye on your bank account. Document the income coming into your bank account after any tax withholdings or retirement contributions. Break down spending into two categories: fixed expenses (rent, insurance, utilities, etc.) and discretionary expenses (groceries, outings, streaming services, etc.). Do this while you’re still in service and again once you’ve left. Examine how much more you’re spending on both types of expenses and decide if there’s anything you can cut back on to save money.


3. Readjust your spending habits and financial goals

Once you’ve got a picture of how much more you’re spending as a civilian, think about how the increased cost of living affects your goals. Are you saving up for a child’s college fund, a home or a big vacation? Do you have an emergency fund? If your goals are time-bound or a top priority for you, you might have to tighten your budget to keep saving for them at the same rate.

Find a budgeting style that works for you. Maybe you use a mobile banking app to track your spending in real-time, or contribute to your savings before making any discretionary spending purchases each month. Picking a method that makes sense to you means you’re more likely to stick to your budget plan and achieve your goals on time.


4. Don’t be afraid to ask for help

If you’re feeling overwhelmed by creating a new budget, don’t panic. It’s okay to adjust your financial goals in order fit your new lifestyle, and it’s okay to ask for help. Consider connecting with a former military member to see what their experience was like. You can also seek help from a professional like a banker or a goals coach. Professionals can be helpful if you want input from someone on the specific details of your personal finances.


5. Start thinking about the future

Once you’ve mastered the art of family budgeting and you’re on your way to accomplishing your financial goals, you can expand your financial horizons. Prioritizing your savings can have an especially good return on investment for military members, since you have access to programs like the Thrift Savings Plan and the Savings Deposit Program. If you have access to a VA loan, you might consider making a plan to buy a house for your family or invest in real estate. No matter what your short- and long-term savings goals look like, getting better at family budgeting will keep you on the road to achieving them.


Ready for more beyond these military finance family budgeting tips? Learn about how U.S. Bank supports the military and their families.

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