One Income Military Families: Here’s How You Can Save!


Whether it is by necessity or by choice, military families often live off only one income. A recent survey by the Department of the Defense found that 24 percent of military spouses were unemployed while the national unemployment average at that time hovered around 4 percent.  Frequent moves, the military lifestyle, and parenthood all contribute to this trend, but whatever the reason, it is possible to not only survive, but to even thrive on one income.

While both my active duty husband and I are employed right now, this is the first time in *twenty* – yes, twenty – years that I have had full time work. For most of our married life and nearly all our military life, we have been a single income family. Here are some tips for saving on one income.

Create a Spending Plan

No matter how large or small your income may be, it’s always a good idea to have a plan for it. The first step in creating a realistic budget is to track expenses for several weeks.

There are many different approaches to creating a workable spending plan – some people use the envelope method where they set aside an amount in cash for each expense category, some use separate accounts at an online bank, and others like to use spreadsheets.

If you would like free professional assistance in creating a spending plan, your local installation’s Family Service Center and Military OneSource both have financial counselors on staff.

Have an Emergency Fund

You should always have an emergency fund of at least $500 as a cushion against life’s unexpected curveballs. Prioritize building this fund, even if you are only able to save a few dollars per paycheck and must put off making extra debt payments.

Keep your emergency fund in a separate account and have an amount automatically taken out of your pay before it hits your “regular” checking account.

Adjust Withholding to Maximize Your Monthly Income

Many families do not regularly adjust their withholding taxes and look upon their tax refund as some sort of springtime “bonus.” In reality, a tax refund is the Internal Revenue Service giving you back your own money that you overpaid in taxes, and the government does not pay you interest.

Whenever you have life changes – marriage, children, loss or gain in income – you should use the IRS Tax Withholding Estimator and make sure that you are having the proper amount of taxes taken out of your paycheck.

It’s better to have more money in your pocket today than a tax refund windfall in April.

Scale Back or Scale Down

There are some financial benefits to not working outside of the house, and certain categories of expenses should go down. For example, gas, child care, auto maintenance, tolls, dry cleaning, eating out, and many other expenditures should be lower if only one spouse is working. Adjust your family’s spending plan to make sure you are moving this surplus to another category rather than simply spending it.

Get creative finding ways to save. My husband learned to cut his own hair and packed a lunch. I honed my cooking skills so we ate out less. I found free or cheap ways for the family to have fun. I shopped at garage sales and thrift shops.

Take on a Flexible Side Gig

Over the years, I have periodically brought in a little extra income in a variety of ways: holding garage sales, mystery shopping, selling on eBay, doing freelance writing, and consulting. This has helped us get over some rough patches without getting into financial hardship.

Beware of Lifestyle Creep

This is probably my biggest piece of advice, and one that I sometimes have trouble following. If your spouse gets a raise, or if you do get a job, continue to live as you did on one income and try to save the rest.

When I started working full time at the beginning of the year, I’ll admit I did go ahead and splurge on a Roomba. But then I went ahead and upped my contribution to my 401k account. I’m putting half of my pay in retirement savings and the rest is going into short-term savings and a vacation account.

The best part is that because I was never used to receiving a salary in the first place, I don’t miss it.

For more savings tips and inspiration, visit Military Saves. Take the Military Saves Pledge and become part of a community of savers who seek to build wealth and reduce debt.

Posted by Lila Quintiliani, AFC®, Military Saves Program Manager

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