Studies consistently show that military families often carry higher debt and own fewer assets than their civilian counterparts. When assessing the sacrifices military families make, this simply doesn’t make much sense. Whether you’re on active duty, have just returned home or are looking for ways to make your next leave extra special, there are many ways in which you can budget for special occasions and still have savings left over to live comfortably.
Follow the 50-30-20 Rule
This is a technique that’s been recommended by the U.S. Senator Elizabeth Warren. First, you’ll want to start by calculating your after-tax income, which basically just means figuring out how much you have after taxes are taken out of your paycheck each month. Then, you’ll need to figure out how much you’re paying on necessities, such as groceries, house payments, utilities, car payments and things such as insurance. This should total no more than 50% of your entire budget. Then, you can put 30% towards wants, keeping in mind that a “want” is something like new school clothing and a special cable plan. This doesn’t include extravagant spending on trips and new shoes each week. The leftover 20% should be put towards savings or debt payments.
Pay with Credit Cards Optimized for Military Families
As an active duty member of the military or the family of someone on active duty, you are actually able to receive numerous benefits under The Servicemembers Civil Relief Act. What this act essentially does is put restrictions on how much credit card companies are able to charge you for interest and other fees, leaving you with the ability to save more while reaping the benefits of cash back and travel points. First, you should sign up for USAA, which aims to help military families reach financial freedom. Then, you can begin looking for a credit card that suits your needs and lifestyle. The Platinum Card for American Express, for example, offers travel rewards specifically for military members which are great for planning special occasions in the form of a getaway. This card comes with a 0% interest rate for active military members and will give you 40,000 points just for signing up and 1 point per dollar spent on any purchase. The Citi Double Cash Card is a great option as well and offers 1% cash back on purchases and 1% cash back simply for paying your bill.
Optimize the Way You Save
Many credit card companies offer great rewards for military members and their family whether you are active, in the reserves or even retired. It’s worth mentioning this when signing up for any credit card or receiving financial planning assistance as there could be unseen perks that will help you save more for special occasions in order for your family’s dedication and sacrifices made for the country. By following a strict budget and optimizing your cash and how you spend it, you will find yourself with more savings in the bank in order to treat you and your family to something extra special, whenever you want it.