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4 Steps to Secure Financial Health in 2023


Each year can bring a rollercoaster of financial ups and downs. From a fluctuating economy and global pandemic to sky-high inflation, everyone is struggling to maintain and improve their financial health.

Military families face a special set of obstacles — deployments and relocations usually cause a lot of financial stress for military spouses, who often have to leave fulfilling employment and the loss of additional income. Additionally, military families often face long housing waitlists or expensive rental costs. That doesn’t even begin to include the difficulties added when families have children who need to enroll in school and/or childcare.

If you are in the military, here are four comprehensive steps you can take to help secure your financial health in 2023.

What Is Financial Health?

First things first: What is financial health? Financial health is a holistic measurement of your entire financial life; it is a measurement of how efficiently you save, spend, borrow, and plan for your future. The goal is to enable yourself to be economically resilient while pursuing your dreams and other opportunities.

How Is My Financial Health?

In order to assess your current financial well-being, you’ll need to conduct an honest inventory of your current spending. Ask yourself the following questions:

  • Am I spending more than I make?
  • Does any of my money go to strategic funds, such as investments?
  • Do I have a budget and am I sticking to it?
  • Do I have money set aside for emergencies?
  • Am I on track to achieve my short-term and long-term financial goals?

How to Improve Your Financial Health in the Military

Improving your financial health can be challenging, but there are some steps you can take to help you achieve your financial goals while you’re in the military. Here are a few suggestions:

1. Know Your Benefits

When assessing and planning for financial well-being, you should start by knowing your benefits so you can learn how to optimize them. Active-duty members of the military have a variety of benefits available to them, including military insurance, housing assistance, tax credits, and Thrift Savings Plan contributions.

2. Create a Budget

A foundational aspect of developing your financial health is having a budget. Your budget should include:

  • Income
  • Housing and utilities
  • Food/groceries
  • Transportation (car payments and amount spent on gas)
  • Debt
  • Short-term and long-term savings
  • Emergency funds
  • Education benefits
  • Deployment and PCS expenses
  • Investments
  • Entertainment and leisure activities

Budgeting can certainly feel like an overwhelming initiative, but here’s a simple and easy-to-follow plan that should help.


Start by Reviewing All Expenses

Take a look at all income sources and expenses. Before creating a budget, you need to have precise knowledge of how much money your household is making and spending every month.

However, keep in mind that some expenses don’t come out on a monthly basis, such as property taxes and vehicle registration. So make sure you also think about the bills you pay on an annual or quarterly basis.


Create a Plan that Works for Your Household

The next step is to create a plan, but here’s the critical part: it must work for your household. If you try to implement a budget plan that doesn’t work for yourself or your family, you won’t stick with it.

A commonly-used budget plan is the 50/30/20 system:

  • 50% of income goes to your needs like groceries, rent, insurance, etc.
  • 30% of your income goes to your wants like trips, vacations, hobbies, etc.
  • 20% goes to your financial goals like savings, investments, and paying off debt

Everyone’s situation in life is different, so this particular system may not work for you. You may also need to do a “trial and error” where you try out different plans to see what’s going to stick for your household.


Make Paying Down Debt a Priority

Prioritizing getting yourself out of debt is important because of how interest payments can eat into your funds. As much as possible, you should make more than the minimum payment on debts like credit cards.

Additionally, if you receive extra military funds such as combat pay or a signing bonus, you should devote some (if not all) of it to paying off your debt. Why? Because it’s money you were not expecting to have in the first place and, therefore you won’t miss having it, while still using it to your own benefit.


Build Up Your Emergency Fund

An emergency fund is critical. Unexpected expenses happen all the time. Your car breaks down, your house needs a repair, or your kid has a new medical bill. An emergency fund is one way for you to handle unexpected expenses without putting yourself into more debt.

Many people aim to have at least $1,000 in their emergency budget. However, if this number feels too overwhelming or unrealistic, just do your best to set aside whatever is possible.


Consider Your Future Plans

What goals do you have for your future? Do you want to retire from the military soon? Send your kids off to college? Buy a house?

Once you’ve gotten your finances in order and you are sticking to your budget, you should start developing a financial plan for your future. This plan could mean starting a “future fund,” where you will deposit any extra money you receive or where you can place pre-budgeted money regularly.

3. Shop on post at the Commissary, Exchange, and MWR

Take advantage of the Commissary and Exchange because shopping there versus conventional stores can save you around 30% on your grocery purchases taxes! You might have to compromise on a few things here and there, but that saved money can go to one of your other savings funds, such as a vacation or future expenses. Purchasing tickets for entertainment venues such as theme parks through the MWR office can be a huge saving.

4. Join a Military Association for Additional Support

As you plan for financial health, you should include elements such as life insurance, mortgages, and wealth management. Figuring out all of these can be exhausting, especially if you’re active military and regularly facing deployments or relocations.

The best course of action is to work with an organization that understands military life and military benefits, and that can help you keep your policies and plans in one location.

AAFMAA offers a variety of services exclusively for military families. Learn more about our services and Membership, and contact us today to get started.