Military life can surprise families with unexpected costs. Building even small savings takes planning when on tight budgets. Putting a little away each month adds up. Savings mean having cash on hand for the surprises military life brings. Sometimes, military families don’t have pay for periods. This can be stressful. Loans for people on benefits can help cover costs during these times. They provide extra money until normal pay starts again.
Military training takes partners away from home for stretches and away from regular jobs, too. This means no normal pay comes in. Expenses keep happening, though—rent, food, transport. Short-term loans allow families to pay bills even with no pay.
Understand Military Pay and Benefits
The core of military pay is the basic salary, which depends on rank and time served. Extra pay can also come for certain duties, deployments, and skills. This is special pay. Allowances give more pay for expenses like housing, food, and moves.
Military families get Tricare health coverage. This pays for many medical costs, such as doctor visits, medicines, and operations. Dental is also included for small fees. Tricare gives access to military hospitals, too.
Base housing vs. housing allowance
Some bases provide homes to families, while others give housing cash instead. Called housing allowances, these help pay rent or mortgages off base. Housing options depend on location, availability, and needs.
Budgeting with Variable Income
Military income changes when duties or locations change. Saving cash for surprise expenses brings peace of mind. Even small regular deposits to savings add up over time. Target to save one month’s essential costs as a start.
Create a flexible monthly budget
Making budgets allows families to track variable spending. Categories common costs like food, transport, and utilities. Use past averages as a guide. But stay flexible month to month when income or expenses shift up and down.
Changing duty stations means significant moving costs. Budget extra funds throughout the year to cover things like housing deposits, fees, and temporary lodging for moves. This eases transition stress.
Take Advantage of Military Savings Plans
A TSP allows tax-free savings for retirement. Money comes directly from military pay before taxes, lowering taxable income. Contributors choose from funds to invest in stocks and bonds. TSPs earn interest over time to build bigger retirement funds.
Savings Deposit Program (SDP)
For those deployed to designated areas, SDPs give 10% interest. The high interest rate rewards savers for time spent deployed. Money deposited grows much faster, helping to build a financial cushion for things like a house, education, or transition expenses. Additionally, specialized loans for people on benefits provide accessible financing options, ensuring that essential needs can be met even during deployment.
Military-specific savings accounts
Some banks and credit unions offer special savings plans for military members. These include high interest rates for cash balances. Some reimburse ATM fees that normal accounts charge. Most have financial advisors to guide military clients on saving and budgeting. Several allow deposits while deployed to earn interest back home.
The key for service members is starting early, making regular deposits, and using tax-advantaged plans like TSPs and SDPs. Consistent savings contributions and smart investments over time lead to long-term growth.
Utilise Military Discounts and Resources
Military shop facilities offer goods tax-free. Called commissaries and exchanges, these sell food, home goods, clothes and more. Without taxes, families pay 15% less. These stores also discount brand names up to 70% off high street prices.
Military OneSource financial counselling
This program gives military families free advice from money experts. Guidance helps create money plans, reduce debt, and fix credit. Counsellors explain military pay, budget changes, and investing for goals. Support is private and tailored to needs over the phone, online or in person.
Free tax preparation on base
Tax time has extra forms and rules for armed forces members. Base centres have experts for military-specific tax help, or specialists come to family housing for convenience. This saves the high fees local firms charge. Help ensures accuracy, maximises returns and follows deployment rules.
Prepare for Retirement Early
Regular forces earn guaranteed pensions after 20+ years of service. These provide half of the final military salary every year for life after retirement. The longer one serves, the higher the pension rate goes.
Additional retirement savings options
Contributing to private plans adds more retirement funds:
- 401K plans match extra savings with contributions
- Individual retirement accounts (IRAs) grow tax-free
Saving consistently means having greater security and choices for the future after service.
Address Debt and Credit Issues
Seeking help creates strategies for debt repayment. Counsellors construct payment schedules based on balances, interest rates and monthly budgets. Sticking to these plans over time reduces what is owed.
Monitor credit reports regularly
Errors on credit reports are common, but mistakes negatively impact credit scores used for loan decisions. Checking reports annually ensures they stay accurate, and disputes can be filed to correct errors that hurt scores.
Cash Help Between Military Jobs
Military life involves periods without a regular salary, such as when moving posts or when partners must find new jobs. However, living costs continue during these gaps. The rent, grocery, and transport bills don’t stop.
Benefits Loans Fill Income Gaps
Loans for people receiving benefits provide fast cash. These loans are very helpful for people on benefits who need a loan today from direct lenders. The money arrives straight into bank accounts, not via brokers. This way, families get money the same day before more financial worries set in.
Payday Lenders Offer Small Sums
Payday lenders allow those on benefits to borrow small amounts. Typically, they are £100-£1000 loans to cover basics until the next paycheck. Manageable sums keep borrowing risk low.
How Loans Ease Tension
The extra cash incoming allows military families breathing room. They are no longer stressing about checking account balances or cutting essential costs. Bills get paid on time without late fees. Food and transportation needs get met without drastic changes. This stability helps reduce money-related tension.
Conclusion
Not having enough money causes people great stress. Important things like food, housing, health, and transport cost money. When cash runs short, worries happen. Thoughts about paying rent, buying groceries, and affording medicine bring anxiety. This stress takes peace of mind.
Looking ahead and planning helps control money fears. Setting savings goals, tracking spending, and making budgets relieve stress. Even small amounts saved mean having cash for emergencies and future wants. Planning spending based on expected income works better than guessing.
Source: Financeguruzz.com
