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3 Basics of Budgeting for Military Families

budgeting for military families

Basics of Budgeting For First-Time Budgeters

Have you ever wondered where all your monthly income went? We work hard every week and can’t seem to save anything or invest in our future. Many of us don’t have a budget nor do we record where our money is going. Simply put, the nexus of our decision to spend or save money depends on the amount of funds available in our bank account or how much credit we have on our favorite points-based credit card.

Budgeting is a day to day transformation of how you value and treat your hard-earned money. It’s not going to fix or solve your financial problems immediately, but it will change the way you view your money and how it works for you. You can get a new budget overview in three easy stages.

Stage 1 – List Income and Expenses

  • Know what your income is. Net income calculates the amount of income you receive after taxes and deductions. Net income is the baseline you should use to standardize your budget as it simplifies your expected take-home pay.
  • Determine your monthly fixed expenses. Fixed expenses do not change from month to month. List all fixed expenses you have whether they are essential or discretionary such as; car payment, insurance, phone bill, Netflix, rent, savings, investing, and student loan payments.
  • Know your variable expenses. Variable expenses can change month to month. List all variable expenses you have whether they are essential or discretionary such as; fuel, food, entertainment, clothing, and home or vehicle maintenance.

Stage 2 – Subtract Expenses From Net Income

  • Set aside money – if your expenses are less than your net income, this presents a great opportunity for setting aside more money for financial goals you may have.
  • Adjust as necessary – if your expenses exceed your net income, then you need to make some adjustments to your discretionary spending to see where you can reduce costs.
  • Identify roadblocks – identifying expenses allows you to get a better picture of where you are spending your money. This will help you identify where your financial roadblocks are.

Stage 3 – Identify Your Goals and Make Adjustments

  • Have a goal – having a goal behind your budget will help it succeed by increasing motivation. Review the areas where you spend money and see if they align with your new goals. If they don’t, you might need to eliminate or reduce some expenses.

Examples of goals would be paying off debt, saving for retirement, paying off college, building a savings account, saving for a vacation, saving for a down payment.

  • 50/30/20 Rule – if you are just starting with budgeting and not sure of how much money you need to accomplish your goals but want an easy starting point, start with the 50/30/20 rule.

50% of your income should be spent on essentials, 30% should be spent on discretionary spending, and 20% for savings and investing.

  • Remember variable expenses like food and gas – variable expenses can be tricky to budget for, especially food. When budgeting for food budget between $8 and $10 a day for an adult and half that for a child.

Another variable expense that gets people is fuel. Review your last few months of fuel costs and use the average amount as your monthly budgeted cost.


After completing these three stages you are ready to set up and start your new budget. It is important to review your budget every few months as goals can change.

Setting a monthly budget will allow you to live without constantly worrying about money because you will know what your budget can handle. If you don’t pay yourself first (saving and investing), then all of your money is going to be spent frivolous and you won’t have anything in reserve to show for your years of labor. Being financially independent is freedom.





About the author

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Lori Waddell serves as Co-director of an emergency response COAD in Montana, a freelance writer, and an Air Force Key Spouse. She is passionate about empowering communities and individuals through knowledge and resources. She currently lives in Montana with her husband and two children.