Our Overseas PCS Budget – Where are We Moving? What do We Need to Save?

A few of weeks ago, I shared How to Budget for a PCS (military move), which included a FREE budget form for your PCS. Today, I am sharing our initial Overseas PCS Budget. We have approximately 6 months before we will be moving from England and back to the United States. Are we excited? Of course! Is it a little bitter sweet for this “adventure” to be ending? Definitely!

I was planning on waiting until my husband received “official orders” before sharing where we will be moving. However, it is always a hurry up and wait game when it comes to the military. We have jumped through all the hoops and are just waiting on paperwork.

For those of us who have to financially prepare for an overseas move. We need at least six months to get our finances prepared. I also thought it might be “fun” “interesting” to follow how we prepare our finances. See them change a million times and then finally successfully (fingers-crossed) complete an overseas military move.

Where are We Moving?

I know, I know hurry up and tell us already. Right? Unfortunately, we are not moving “home” where our mortgage house is located. We were quite bummed, but knew it was a long shot from the get go. We will seriously consider selling this home within the next year. Don’t worry, we still plan on paying off the mortgage as quickly as possible!

Okay, so on to the good news. We were only disappointed for about 90 seconds after hearing/reading the news where we will be headed this summer. This place, where we will call home by the end of the year has an extremely high cost of living! There are beaches, palm trees, and lots of sunshine… and it’s NOT California… We are “island hopping”… we will soon be calling HAWAII home!!!

Yes, we know! We are EXTREMELY lucky, blessed, the military gods love us, and all the above. We have actually been keeping it quiet from a lot of our extended family, friends, and acquaintances. I’m not sure if it’s out of fear of jinxing the opportunity or avoiding the “envy” and/or opinions about living on an island. lol. So, if you know us in “real life” and hadn’t heard the news… SURPRISE! lol.

What Does this Mean for Our Family?

Although, I have been saying for the past month or two that we are moving back to the United States. The military views Hawaii as an “overseas” or OCONUS (outside continental U.S.) move. This means we get to jump through extra hoops and lots of appointments before we get there. Hasn’t been too fun being “very” pregnant and my husband being swamped with work, but we’ve managed. 🙂

OCONUS locations are “controlled tours” which means my husband works there for a set number of years. This does benefit us in that we can plan to stay put and know an approximate date of our next move. This is beneficial to our finances because we can establish financial goals for the next 3-4 years without worrying about another move messing up our plans. We also know our approximate income and expenses.

Our Overseas PCS Budget

2016 Overseas PCS Budget

Assets, Refunds & Extra Income

PCS Fund                       ___$0___

Savings                           _$6000.00_
* We will be using $5000 of our $20,000 Emergency Fund for our PCS fund. Our mortgage will be within months of being paid off, so we feel comfortable with a smaller EF. We expect to have a minimum of $1000 left from our car repair/maintenance fund (currently $1700+). 

Selling Your Car(s)  _$1000.00_
*We have estimated low. We should be able to get $1200-$1500 for our car.

Selling Your Home   ___$0___

Yard Sale                        __$200.00__
*We have a few household items we will sell (2 smart phones, GPS, vacuum, iron, fans, transformer, etc.)

Deposit Refunds         _$2200.00__
Our deposit refunds will depend on the currency exchange rate. We expect go get $2100-$2400 from our rental house deposit. We should also have small ~$100 refunds from our Road Tax and electricity/gas bill. So we are under-estimating to be safe.

Extra Income                  ___$0____

Total Assets:   _$9400.00_

Expenses at Current Location

Medical/Dental Procedures     ___$0____

Moving Expenses                           _$50.00_
* There will be a couple of items we ship via the U.S. Post Office to our new location. Basically a few baby items that won’t fit in our suitcases and we don’t want to spend 3+ months living without. 

Child Care                                          ___$0____

Cleaning Your Home                     _$100.00___
*We plan on buying paint and will need to repair a few very minor things. We will also rent hedgers to get the garden in tip top shape.

Selling Your Car(s)                        ___$0____

Rental Car                                       __$300.00_
*I have looked up local rental car rates. We should be able to rent a car for a month for just under $300. 

Hotel/TLF                                         __$200.00_
*There may be an overlap of us paying rent for a day or two while actually living in a hotel. This is to cover that possibility. 

Restaurants/Food                         __$0_____
*We have already secured a place with a kitchen to live in, between moving out of our home and our actual departure date. We should be able to cash flow our food expenses with our regular monthly budget.


Travel Expenses

Transportation Expenses               __$100.00__
*Our bus or taxi to the London airport will be put on my husband’s GTC (Government issued Travel Card). We shouldn’t have to pay the GTC bill until he receives reimbursement. This $100 is to cover a taxi if needed once we arrive in Hawaii. 

Hotel                                                           ___$0____
*The travel time between England and Hawaii is ridiculous and would definitely qualify for a hotel stay. However, we plan on making a pit stop in Washington for a week or so.

Food Expenses                                         __$40.00__
*We may need to buy a meal or two in the airport. We prefer to pack our own food to eat healthier, but we will see if it’s feasible. 

Transportation of Your Vehicle(s) ___$0____

Vacationing or Visiting Family         __$800.00_
*We will be visiting family/friends in WA state for a week or so. It appears we will have to pay the difference in airline tickets, because although we own real estate and are residents of WA it is not the “home of record” for my husband. My family will pick us up from the airport and we will be staying with them the entire time.

Expenses at New Location

Rental Deposit & First Month’s Rent  _$5000.00_
*Use this BAH calculator for your budget. We have browsed Craigslist to determine what we can expect to pay in rent. Our best guess: $2100-$2500. We have used the top-end of the budget to determine this PCS expense.

Utility Deposits                                            __   $0____
*We plan on cash flowing this expense with our monthly budget.

Car(s)                                                                  _$9000.00_
*We have looked at Craigslist. We plan to get two vehicles around $4000 each. The “extra” in this estimate is to pay for taxes/tests/registration and to give us a little buffer. 

Rental Car                                                         __$250.00_
*I have looked into cost of a rental car in Hawaii. This should pay for a one-week rental. Hopefully, we can find a car to purchase within the first week. 

Hotel/TLF                                                          _  $400.00_
*We should not have to pay for this out of pocket. But you never now, sometimes there is a delay in paperwork/funds. So this is just to ease our minds “just in case” type of scenarios.

Restaurant/Convenience Foods             __$300.00_
*Who knows how long we will be in Hawaii without our household items. Washington to England took just under 2 months for our Unaccompanied Baggage AKA “fast shipment” (where we pack most of our kitchen items). So we are assuming it will take longer than 2 months. We may be eating restaurant foods and sandwiches for quite sometime. 🙁 

Phones                                                                __$300.00_
*We have Iphone 4’s in the U.K. We could bring them to the U.S. and cross our fingers we can find a network that will be compatible. Although, our plan for now is to sell them and most likely sign up with Republic Wireless. We will have to pay for our phones, but then their monthly plans are extremely affordable!

House Supplies                                              __$200.00_
*We will have to buy a few small appliances (microwave, toaster) because we have 220v appliances here in the U.K. Fortunately, we have a 110v vacuum, coffee maker, and a few other kitchen appliances.

Re-Stock Kitchen                                          __$300.00_

Professional Licenses/Certifications     ___$0____
*My national certification is $65, which I will renew next month (good for 3 years). I will need to get a Hawaii state license. The fee is $85 and it appears they start taking applications in October for the following year, which is the soonest I will return to work. So, we will just budget for this at that time.

Clothes                                                               ___$0____
*Our wardrobes will definitely need to be “updated” coming from England where we only have a couple weeks of summer. We have “summer clothes” from when we lived in WA that can make do for a while. We plan on cash flowing this expense and just slowly building up an “island” wardrobe.

Other: (Brother’s Wedding)                      _$1400.00_
*My husband’s brother is getting married in October. We will need to purchase airline tickets shortly after arriving in Hawaii, so we have made this part of our PCS expenses.

Total Expenses:     __$18,740.00__


Assets  $9400.00 Expenses $18,740.00 =   $9,340.00 (Amount We Need to Save)

We NEED to SAVE just over $9,000!!!

This is definitely an amount that I am glad we have time on our side! Currently, on an average month we have an “extra” ~$2500 in our budget. We will comfortably be able save $1500 and still pay extra on our mortgage every month. Our plan for now is to save $1500/month between February and July.

As we get closer to our departure date, we will have a better idea of our expenses and income. We will most likely need to readjust our savings over the next few months. Remember budgets are flexible and every changing. This is only our initial and very approximate budget. The only purpose is to give us an idea of how much we need to save in the next 6 months.

Is Your Family Moving this Year?
Do You have a PCS/Moving Budget?


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Budget for a Military PCS (Permanent Change of Station)

Is your family among the thousands of military families moving this year? Then you may be thinking about how you are going to financially pull off, yet another military move. If you are similar to my family, who will PCS this summer. The good news is you are thinking about your budget for a military PCS, six months before your actual move date.

However, you may not know where your family is being relocated. This makes nailing down a PCS budget difficult, but not impossible. Most likely you have an idea of your chances of moving overseas or state side and perhaps even know the five or so most likely locations of your new home.

The best advice, start saving NOW! You can always calculate more of an exact budget after you know the details. Before you start saving blindly, try to determine an estimated PCS Budget. This way, you know approximately how much you need to save each month to hit your target.

Budget for a Military PCS

Budget for a Military PCS

Savings or PCS Fund

Do you already have an established PCS Fund? Some military families who move often choose to always have a PCS Fund, because they never know when the next move will occur. If you already have a PCS Fund, you are way ahead of the game! Well done! Now it’s time to determine if it will be enough to cover your upcoming move.

Do you have extra in your savings account? Larger than needed Emergency Fund? How much can be used for your upcoming PCS expenses?

If you do not have extra in savings or an establish PCS fund. Do not panic. You still have time to save.

Expenses to Consider

Please keep in mind each military branch handles certain expenses and reimbursements differently. For some military families, a few of these expenses may be directly paid by the military or will be paid with a GTC (Government Issued Travel Card). However, some families will choose to do a DITY (Do It Yourself) Move and have even more expenses than listed below.

Please consider the following list a starting point and not a list of every possible expense.

Expenses at Current Location

  • Medical/Dental Procedures – Appointments or procedures that need to be completed before your PCS.
  • Pet Expenses – Will your pet need to visit the vet or get vaccines before moving?
  • Moving Expenses – Do you need to rent a trailer or truck to move? Mailing things to your next location? Will your household goods be over the weight limit? If so, prepare to pay the overage fee.
  • Child Care – You may need to hire someone to watch your children while the movers are in your home, while you are deep cleaning your home, or during required PCS appointments/meetings/classes.
  • Cleaning Your Home – Whether you are hiring someone, need to rent a carpet cleaner or just buying extra cleaning supplies. You may also need to consider expenses to paint and perform small repairs.
  • Selling Your Car(s) – Your car may need repairs or detailed before you sell it.
  • Selling Your Home – If you currently own your home, but plan on selling before you PCS. Do not forget to budget the expenses (repairs, paint, cleaning, etc.) to prepare your home for the market and closing costs. If you owe more on your home than it is currently worth, you will also need to factor in this expense.
  • Rental Car – Will you be selling and/or shipping all your vehicles before you travel to your next location? Estimate how many days/weeks you will need a rental car and the associated expenses.
  • Hotel or Temporary Living Facility (TLF) – Will there will be a gap between when you need to move out of our current home and when you actually travel to your next location?
  • Restaurants – Your household items may be in boxes for days if not months (overseas moves). Budget to eat at restaurants and purchasing convenience foods.
  • Passports/Visas – If you are moving overseas you will need to pay for this expense months before your travel dates.

Travel Expenses

  • Transportation Expenses – Airline tickets, gasoline, bus/train tickets, taxi, parking, etc.
  • Hotel – If your travel is going to take more than one day.
  • Food Expenses – Your family will most likely be eating at restaurants during your travel day(s).
  • Pets – Will your pet need to travel by airlines? Need a special crate? Once you arrive, will you need to hire a company to transport your pet from the airport? Does your pet need to be quarantined (overseas)? Will you need to pay for boarding until you secure pet-friendly housing?
  • Transportation of Your Vehicle(s) – Are you driving your vehicles? Pulling one on a trailer? Shipping it?
  • Vacationing or Visiting Family on the Way? – Many military families take the opportunity to take a vacation or a quick trip to see family on the way to their new location. Do not forget to budget for these travel and entertainment expenses.  

Expenses at New Location

  • Rental Deposit & First Month’s Rent – If you live in military housing, chances are you will not have to worry about this expense. However, if you do not. This expense could be quite large. It could be as low as $1000 total. However, some overseas locations can be as high as $6000 or more!!!
  • Utility Deposits – Some utility companies (electricity, gas, water, garbage, etc.) require a deposit. This could be a small fee or up to ~$100 for some companies.
  • Car(s) – Do you plan on purchasing a car(s) at your next location? How much do you plan on spending? Do your research to ensure you will be able to buy a vehicle at your budgeted price. Include taxes, registration, and any safety/emissions tests that are required.
    If you plan on bringing your car(s). You will need to consider registration, license plates, and safety/emission test expenses. If overseas, you may also be required to pay for modifications to your vehicle.   
  • Rental Car – If you are purchasing or shipping a vehicle, you will need to rent a car until your shipped vehicle arrives or until you purchase a vehicle.
  • Hotel or Temporary Living Facility (TLF) – Would it not be great to show up to your new location and have a home ready for you? You know the reality. It may take days, weeks and in some situations months to find a home. The good news, you will not be paying rent. Therefore, your housing allowance could off-set this expense.
  • Restaurant/Convenience Meals – You may be living without your kitchen items for days, weeks, or months. This makes food prep difficult and chances are you will spend more than usual on food while waiting for your household goods to show up.
  • Phones – If you are moving to a location where your current mobile provider does not operate you will need to consider the expense of purchasing phones and/or possible fees associated with contracts.
  • House Supplies – There always seems to be house supplies that need to be purchased when moving into a new home. Shower Curtains, Garbage Cans, Cleaning Supplies, Curtains, Storage Units/Containers. If you are moving overseas, you may need to purchase small appliances because 240 voltage is used in many foreign countries (microwave, toaster, coffee maker, iron, vacuum, hair dryer etc.).
  • Re-Stock Kitchen – It always amazes me how expensive those first few trips to the grocery store are after each move. You will need to buy all your staples (flour, sugar, rice, pasta, beans, olive oil, etc), condiments, spices, paper goods (toilet paper, paper towels, trash bags, aluminum foil and plastic wrap), personal hygiene products, plus everything you need to prepare your meals for the week.
  • Professional Licenses/Certifications – If the non-military spouse has a career where he/she needs a specific state license or certification to be employed in your new state or country, do not forget to include these expenses.
  • School Supplies – If you are moving mid-school year, your children may need completely different school supplies. Or if you are moving in the summer, back to school expenses will be right around the corner when you arrive at your new location.
  • Clothes – If your new location has vastly different temperatures or climate than your previous location you may need to budget for clothing.

Selling Assets, Refunds & Extra Income

Do you have assets you will sell or extra income you will earn before your move? Can this extra money be used for PCS expenses?

  • Selling Your Car(s)
  • Selling Your Home
  • Yard Sale – Selling household goods you will not need at next location.
  • Deposit Refunds – Rental and utility deposits that will be returned upon vacating your current home.
  • Extra “Income” – Perhaps the non-military spouse has saved up PTO (Paid Time Off) at his/her current job. Expecting a tax refund before you PCS? Perhaps a “bonus”?

How Much to Save for Your PCS?

Now that you have thought about your possible expenses, savings, and assets. It is time to determine how much money you need to save before your PCS. Simply, add your savings and assets and then subtract your estimated expenses. Use this FREE PCS Budget (Google Doc).

(Savings + Assets) – PCS Expenses = Amount You Need to Save

How much do you need to save each month? Let’s say you need to save $7200 and you PCS in 6 months. This means you need to save $1200 each month!

Can You Save Enough?

If you do not have $1200 of “wiggle room” in your budget each month. You may be thinking “yeah, right” throw up your hands and give up on budgeting for your PCS.

But wait! There is still hope. You can do this!

Back-up Plan

Budgets are extremely flexible! With some hard work and sacrifices we can do much, MUCH better financially than if we had not budgeted at all for our PCS.

Where Do I Find the Extra Money?

  • Decrease Your Expenses – The first step is to look over your PCS expenses. Where can you cut back? You could plan on buying a cheaper car or be a one car household until you save more at your new location. You could try to rent a less expensive home at your new location. This would lower your rental deposit, your first month’s rent and allow you to save more each month once you are moved. Can you reduce your hotel/restaurant expenses by staying with friends/family? Instead of renting a car, do you know someone who will allow you to borrow their car for a few days?   
  • Extra Income – Can either you or your spouse pick up extra jobs (child care, lawn care services, shoveling snow, sewing services, delivering pizzas, waiting tables, etc.) over the next ~6 months to boost your PCS fund?
  • Sell More Items – Do you have more assets you could sell? Do you have a vehicle with a high monthly payment that you could sell and purchase something more affordable?
  • Seek Help – There are programs that are offered to military families to help with the burden of PCS expenses. Visit your military installation’s family resource center and inquire about these programs. Many of these programs will be discussed during your PCS briefings.

The military also offers “advanced pay” of up to 3 months of your basic pay. It could be viewed as an interest free loan to pay for PCS expenses that are non-reimbursable. However, if you do choose the advanced pay option. PLEASE be aware that your paychecks will automatically be decreased over the next 12 months to pay back this “loan.” Meaning, if your family has very little extra income with your current pay. This decreased income will make it extremely difficult to make ends meet over the next 12 months.  

Reimbursement for Expenses

If this is not your first PCS, you know many of these expenses are reimbursed. There are also several one-time (per PCS) reimbursements that help cover those non-reimbursable expenses. Please read this Military.com article for more details.

Our family chooses not to factor in these reimbursements with our PCS. The reason being, you do not receive the reimbursement until a month or more after you PCS. Much later than when these expenses need to be paid. We prefer to save up a PCS fund so we can pay these expenses as they occur. Preventing the accumulation of debt. Once we are reimbursed, then we use this “extra” money to replenish our savings or apply it to financial goals we have put on hold while saving for our PCS.

What Do You Think?

How Does Your Family Prepare Financially for a PCS?
What PCS Expenses did I Forget?
Are You PCS-ing this Year? Where?


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Military Life & Money: Financial Success Story of Jennifer & Michael

We are beginning a new monthly series today and I am so excited to finally share with you the very first edition of “Military Life & Money: Financial Success Stories.”

This year, I wanted to bring more focus on community and inspiration to Budget Loving Military Wife. I could not think of a better way to do this, than to introduce to you, military personnel and  their families who are doing AMAZING with their finances!


Today, I have the pleasure of introducing you to Michael and Jennifer and their two adorable children. Michael and Jennifer are in their 20’s and have been married for six years. They currently live in the United Kingdom, where Michael serves in the U.S. military. Without further anticipation, here is Jennifer to tell you their story.

Financial Upbringing

I have always had a very strong work ethic and my own method of saving. My first job was when I was 16 years old, working in fast food. I typically worked 25 hours per week and brought home around $150 each week. I always stashed away half of it into my savings account.

At 18, I began college. I received four scholarships and did not need to use my own money to pay for school. At this time, I was still working in fast food, but was now a full-time employee and student.

Money has always been a huge source of security for me. Growing up my father talked about money 99% of the time so I grew up with a high awareness that money was “important.” Paying off a house in 15 years and paying cash for cars was “normal” in my house.


Marriage and Family Life

I married my husband when I was 19 years old. At this point, I had saved up $7000 and had no debt. However, my husband had a car loan of about $8000.

My husband deployed that same year and we paid the car off during his deployment. The following year, I left work to focus more on my marriage and school. I graduated in 2012 with a B.S. in Accounting from a state university.

Before moving to the United Kingdom, I worked for a few years and had our first child. Now we are living overseas, where I am a stay at home mom, and we have added another child to our family.

Staying home has been a big adjustment. I went from working full-time while living in the states to moving to a foreign country and entertaining kids all day.

I am very grateful for the opportunity to spend so much time with my kids. However, I do miss working and it stresses me out that I am not financially contributing to our net worth. I really enjoy working and saving for our financial goals.

Managing Finances Together

When my husband and I married, we immediately combined our finances and worked as a team. Although, I had to kind of “drag” him in my direction as he was pretty reluctant to saving.

I remember when we hit $20,000 in savings, he asked me “when are we going to have enough?” I looked at him and said “it will never be enough.” “What more do you want/need? We eat out, we buy things, what do you feel you are missing out on?” He had no response. LOL. After that, he has pretty much been in the same boat, when it comes to saving for our future.

Today, we continue to work as a team. However, we have discovered that working within our financial strengths works best. My husband does a lot of the research that goes into picking our investments. He has been pretty good (or lucky) at it so far.

I mostly manage the finances, but I always discuss things with my husband. I really enjoy working with numbers and creating budgets and seeing how much we can save. My husband just likes to see the results.

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Budget Struggles We Conquered

Our biggest budget struggle was getting rid of bad habits like eating out all the time and buying groceries we never ate. It was just wasteful. We had to learn how to plan meals and buy groceries around the meals we planned. We had to stop buying just whatever we thought looked good at the store.

Another struggle was being shy about investing our money into anything other than a savings account. We just started some CDs, mutual funds, and stocks last year. We were so nervous about losing our savings!

In actuality, we were losing more money by not investing it into something. We are still shy investors, but we are getting our feet wet. This process has been difficult for us because we do not want to lose anything. But without risk, there is no reward.

Our Financial Success Story

Our income has ranged between $40,000 and $80,000 each year. We are 26 and 29 years old, we have no debt, and have a net worth of $138,000. Of that, $110,000 is liquid and the rest is in retirement accounts.

Reason for Financial Success

We pay ourselves first. This has been the biggest factor in our personal financial success.


My motivation for financially security is having the ability to make our own choices in life. Frequently, income guides people into certain career choices. However, I want us to do whatever makes us happy, even if that is working at Walmart.

I hope our children learn from our example. I hope they see that it does not matter how much money you make. What matters is how well you manage your money.


Our Financial Goals

This year our goals are to increase our savings to $33,000 for retirement, $76,000 in our future house fund, and $15,000 in our investment accounts.

Our long-term goals include purchasing a ($150,000-$200,000) house with CASH! We also want to max out our retirement contributions each year, send our kids to college without student loans, and work because we want to, not because we have to. We would also like to own a business some day.

Finances as a Military Family

Our military lifestyle impacts our finances greatly. I left my full-time job for this last PCS move, which has cut our income significantly. This overseas PCS was very costly. Expenses included everything from vehicle light conversions, tv license, emissions tax and 220v appliances. All were not reimbursed. We also sold one of our American cars and bought a U.K. car.

We had about $6000 worth of moving expenses on a credit card and we had to pay it off before we received reimbursement. All of these expenses occurred suddenly and the military does not always do a good job with providing good expense estimates. Having extra savings made this PCS less stressful, especially since it took time to get reimbursed (3 months!).

Although rare, another financial stress my family deals with because we are a military family, are government shutdowns. When our pay was threatened, there was a lot of stress placed on us even though we had months worth of an emergency fund established.

Another financial obstacle that impacts military families is spouse employment. While not impossible, it is more difficult to find a job when you are a military spouse. A lot of employers will not even consider you because you will most likely be in the same place for only a couple of years before you move again. I do not volunteer this information in interviews for this reason.

Biggest Financial Obstacle for Military Families

Moving is such a huge obstacle for military families. You can not prevent it, but you need to always be prepared for it. Having money set aside for moving really helps out. While most of the moving expenses are reimbursed. Reimbursements take a long time. You typically end up paying these big bills out-of-pocket and eventually, (maybe months later) you are finally reimbursed. If military families are not prepared for it, they could find themselves into a financial mess.

Advice to Families Who are Struggling

1) Create a Plan & Budget
2) Pay Yourself First!
3) Cut Back on Things You do Not Need (Cable, Eating Out, Shopping)
4) Get Rid of Debt (Sell a car if you do not really need it)
5) Do not Accrue New Debt.



Thank you Jennifer for sharing your family’s financial success story with us today! Your family is truly an inspiration and I wish you the very best in your financial journey and reaching those amazing goals! Be sure to follow Jennifer and her family’s financial journey at Paying Yourself First.


Wow! Can you believe how amazing this military family is at achieving financial success? In their 20’s, with a modest income, but they have a net worth of $138,000 and their goal is to pay CASH for a house! How truly inspiring!



P.S. Are you a military member or a military family who would like to share your financial success story to help inspire us at Budget Loving Military Wife? I would LOVE to hear from you! Please email me at BudgetLovingMilitaryWife(@)gmail(dot)com. I cannot wait to hear from you!

 Optimized-military (1) Optimized-Military

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10 Biggest Financial Mistakes. Military Edition




Military families have many unique differences in our finances compared to our civilian neighbors and friends but we are also struggling with some of the same financial mistakes. If there is one thing that all of man kind has in common, it would be the ability to make mistakes.

Of this compiled list of the Biggest Financial Mistakes, my husband and I were making 8 of the 10 mistakes before we decided to turn our finances around. Today, nearly 3 years after “Our Financial Story” began, we still struggle with #10, but we have made amazing progress. Acknowledge your mistakes, and move in the direction of financial security.

Are You Making Some of these Biggest Financial Mistakes?


  1. No Emergency Fund

    In my experience, it is even more important for military families to have an emergency fund, than civilians. We often move every 2-3 years and if one of these moves happens to be an overseas move you will need $5000-$10,000 to have a successful PCS without the accumulation of debt.

    Also, with the current downsizing of military personnel there are not “guaranteed paychecks” although you or your spouse hope to continue serving our country there are multiple reasons this dream may be cut short. More military families are single income homes than civilian families, meaning if the military member for some reason stopped receiving his/her paycheck this family could possibly have no income. The “government shutdown” was less than a year ago, do you remember all of those government employees who were without pay for several weeks???

    How to Fix: Pay yourself first and get on a written plan, AKA Budget. Even if you can only save $50/month at first, something is better than nothing. Sell some things around the house you no longer use. The goal is to have 3-6 months of expenses saved in an emergency fund. This money is ONLY for true emergencies!

  2. Buying New Cars

    A new car depreciates nearly 20% the moment it is driven off the lot and will depreciate 40-60% in the first 5 years of ownership. Plus paying 3-6% (much higher if you have poor credit) interest on the loan.

    I see many young military members driving around $30,000+ new cars and the more popular (and expensive) pick-up trucks. After 5 years, this $30,000 vehicle is now worth $12,000 and you have paid $2300-$4800 in interest. Can someone with an income of $25,000-$30,000/year “afford” to throw away $14,000-$17,000???

    This would be like throwing out a $100 bill every week of those 5 years. Suppose you are a family with two vehicles and a higher income. But don’t the numbers just double? So is it really any better?

    In 2013, the average car payment was $471/month. What would $471/month become if it was invested between the ages of 16 years and 65 years with 8% investment returns? How does $3,386,000 sound??? Your car payment is STEALING your retirement.

    How to Fix: If you are “car poor” meaning your car payments are using too much of your income, for you to get ahead financially. You need to consider selling the car. A good rule of thumb is your transportation expenses (fuel, maintenance/repair, payments) should be around 10% of your income. Meaning a $600/month payment for two cars doesn’t make sense if your take home pay is $6000/month. Purchase reliable, used cars for CASH!

  3. Purchasing a Home

    Often purchasing a home for an active duty military family is a poor financial decision. Financial experts recommend only buying a home if you plan on living in the home for a minimum of 3-5 years. The reason being, this gives the home value a chance to appreciate to cover the closing costs associated with selling a home. Unfortunately, military families rarely live in the same location for more than 3-5 years. Homes near military installations also appreciate much slower than homes in other areas, because there is always a surplus of homes on the market in these areas. It is not rare to see a home being sold for LESS than what it was purchased for a few years prior, near a military installation.

    Purchasing too much of a home can also be a financial mistake. In order to set your self up financially, you should be  debt free and have a 10-20% down payment. You should get a 15-year fixed rate mortgage. If your mortgage payment +insurance + property taxes is more than 25% of your take home pay. You have too much house, and you will be “house poor.” This will make achieving other financial goals difficult.

    How to Fix: If you have already purchased a home, chances are the damage (if any) has already been done. If you cannot “afford” the home you are currently living in or renting from across the country (or world), you need to consider selling it. Yes, you may take a $10,000+ loss but between continual maintenance and repairs you may lose this and perhaps more by holding onto the property hoping the property value will increase.

  4. No Retirement Funds

    Neglecting to save even a minimal amount for retirement, could end up costing you millions of dollars and possibly a comfortable retirement. Just $200/month invested into a Roth IRA or TSP/401K (assuming 8% investment returns) between ages 18 years and 65 years, ends up being $1.1 MILLION! If you wait until you are 38, you would have to invest $800/month to catch up by the age of 65 years.

    The “8th Amazing Wonder”… compound interest! The sooner you start investing, the more time compound interest will work in your favor. Start investing for retirement, NOW!

    How to Fix: Start investing something. Even if you can only pull together an extra $20 or $50 each paycheck, set up an automatic deposit into your retirement accounts. When you receive a pay increase, continue living on your current income and send your raise to your retirement accounts. Continue trying to increase your retirement investments until your contribution is 15% of your gross income.

  5. No Spending Plan

    Living paycheck to paycheck is often the result of not having a plan. Nearly half of all Americans live paycheck to paycheck. Some of these families are living under the poverty level, but many of these families have an income of 6-figures. If you do not tell your money where to go, you will be wondering where it all went.

    Every month, before the month begins sit down and write down your expected income and expenses. Every dollar needs to be placed in a category. There is no room for “extra” or “deficits,” you work out the budget until every dollar is spent on paper. Income – Expenses (Giving, Saving, Spending) = ZERO.

    How to Fix: Sit down NOW with your spouse and write out your income, expenses, and debt. Devise a plan that will work. This plan is the blue print to how you are going to become financially secure. HERE is a link to Dave Ramsey’s FREE budgeting worksheets. Check out this post “The Dreaded B Word… Budget” for further tips and tricks to establish a budget in your household.

  6. Too Much Debt

    Often times, families desperately want to make a difference in the finances and are busting their rears. They are doing everything in their power to tackle debt or establish an emergency fund and the wheels are just turning with no traction. Some families simply have too much debt and can’t seem to make much headway.

    A general rule of thumb is if you have a debt to income ratio higher than 30%, you have “too much” debt. For example if your take home pay is $3000/month and your total debt payments are more than $900/month , you simply have too much debt.

    How to Fix: First step is to immediately stop borrowing. Take those credit cards out of your wallet and no more new debt. Tackle your smallest debt with a vengeance. Have a yard sale, sell a few things on craigslist, get a couple of side hustle jobs (babysit, walk dogs, etc.) to get your first few hundred dollars to pay off your smallest debt. By paying this smallest debt off, it should free up $20-$50 in monthly payments and this can be put towards paying off the next debt. Snowball your debt!

  7. Eating Your Paycheck

    Quite literally sometimes. Do you eat out at restaurants often, don’t brown bag your lunch? You may be guilty of eating your paycheck. Have you ever totaled your monthly expenses for restaurants?

    We were guilty of this! We went out to dinner 2-3 times a week and out to lunch 1-2 times a week. Assuming each lunch was ~$7 and our average bill for dinner was ~$40.  We were spending $370-$600 at restaurants in a month! This does not even include groceries. Yikes! I know this is quite “average” and there are many families who eat at restaurants more.

    How to Fix: Slowly change your habits. If you eat out at lunch 3 days a week, set a goal of only twice a week. If you eat dinner out 4 times a week, set a goal of three times a week. Once the new habit is comfortable, lower your goal by another meal. My husband and I now eat at restaurants 2-3 times a month. Yes, we went from 3-5 times a week, to 2-3 times a month. This transition did take over two years and you don’t need to be as extreme as us. But remember, each meal at home is going to save you a considerable amount of money, so consider it a win!

  8. Not Working Together

    Typically in a marriage there is one person who is the “finance person” who pays all the bills and is responsible for keeping an eye on all the accounts. I’m here to tell you there is a much better option!

    Both spouses need to have an active role in establishing financial goals, setting a budget, paying bills/buying household items, etc. This is especially important in a military family because of the frequent separations secondary to deployment, TDY, training, etc. Each spouse needs to have ownership and responsibility of holding up their end of the agreement to the financial “game plan.”

    If you do not have team work in your finances, chances are one spouse is sabotaging the other’s goals/plans, possibly without even being aware of how their actions are effecting the family’s financial security. Working together is going to relieve a lot of stress for both spouses and remember the old saying “two heads is better than one.” I promise you, financial teamwork is going to get you to financial goals much faster than you ever dreamed possible.

    How to Fix: Set up a financial “date night.” Remember “finance person” this is NOT going to be fun for the non-finance person. Get your spouse up to date on your current finances (income, expenses, debt, investments, etc.). Remember just the basics, no details or spreadsheet after spreadsheet. Then talk and dream about your financial goals. Set up your next budget meeting “date.”

  9. Not Planning for Military Separation/Retirement

    Your military separation/retirement is going to be a HUGE transition in your life. Not only for your career and family life, but also for your finances.

    You may be thinking I have only served 5 years or 10 years, I have a lot of time before retirement. However, less than 20% off all military members serve a 20 year career. Meaning there is a high chance that your military career will be cut short, whether voluntarily or not.

    Even among those who do serve 20+ years, I hear time and time again how they have no “game plan.” No emergency fund. No extra training or education. No plan on how to obtain civilian employment.

    How to Fix: Whether you are just starting your military career or nearing 20 years, you need to start planning for the day you leave the military. Set yourself up financially to be able to “survive” 6+ months of employment searching and to be employable in a civilian career field. Read this post, “Military Retirement” for further details.

  10. Not Taking Advantage of FREE/Discounted Services

    There are many FREE services on a military installation to help you with your finances. If you are unaware of these services stop by or make an appointment with your installation’s family readiness center/group to inquire about these services.

    Many families are financially devastated when the “bread winner” of the family unexpectedly passes away. Did you know military members and spouses are automatically enrolled in life insurance policies? Look into your policy and make sure it would be enough for your family if the unthinkable happens. Along those same lines, military members can receive free legal counsel. Make sure you have a Will in place just in case the unthinkable happens.

    Military members and dependent family members can also receive FREE financial counseling, pre-employment services, and transitioning counseling. Please take advantage of these FREE services.

    How to Fix: Educate yourself about the available services. Inquire at your local readiness center/group, ask fellow military members about available services. Read the emails and newsletters that are sent to you that typically have further information. Attend a class or two.


There are many things you can do to place yourself and family in a better financial situation. Remember to stay focused by conquering just one or two goals at a time. Prioritize your financial goals and remember one step, one day, one dollar at a time. YOU CAN DO THIS!


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What have been some of your financial mistakes? Do you have financial tips for military families?


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