A community devoted to new service members and their families

Budget Your Finances as you start in The Military

Budget Your Finances as you start in The Military

Managing your money in the military is essential. In order to achieve financial success, you need to get your head in the right place, and that all starts with having a Money Mindset.

It’s not just about being positive but practical as well.

In this post, we are going to provide you with some practical tips that you can put to good use immediately. You are working hard for your money, so protect it. A budget can be a great tool.

What makes a good budget?

A good budget is a plan for how you intend to manage your money by keeping track of the money you have coming in Vs. the money you plan to spend out. However you choose to budget, the key to success is to make sure you use it; spending the time to create a budget is only going worthwhile if you stick to it!

#1 Set Realistic Goals

Knowing what you want to get from your money will help you with your goal setting and budgeting. For instance, are you wanting to reduce your debt, get a new car, or would you like to start saving for a new house?

Wherever possible, try to attach a figure to this goal, something that is a specific value. If you are saving for a car, this might be a set value; if you are saving for a house, this could be a yearly savings value.

Whatever your goal is, make sure it is clearly written down somewhere as this can also serve as a useful motivation tool as well.

#2 Choose your Method

Ok, so while this may seem a little basic, you need to choose your method carefully. If you choose to use a pen and paper; you need to consider are you going to find it easy to update, are you going to keep a copy somewhere in case you lose it? For some, using a budgeting app could be easier to maintain and easier to keep in sight too.

The majority of the data you put into a budget is basic, but keeping track of things, updating them regularly, and tracking your progress is essential. The three most common ways of doing this are listed below.

  • Pen and Paper – there are lots of paper budget templates available
  • Budgeting Apps
  • Excel or Google Sheet

#3 Begin with your Income

When you are ready to start your budget, the first thing to consider is your income. At this point, you will have already set your goal, and you will have a clear understanding of how you are going to track your budget.

For most people in the military, there is a single source of income, which is a stable amount of money that you get every month. For others, were multiple sources of income apply, write them all down, big or small; examples include, Base Pay, Housing and/or Living Allowances.

Make sure you have a section that summarizes the total value of your income in a single box.

#4 Itemize Your Expenses – Regular and Irregular

Now that you have your income in place, it’s time to detail your expenses.

Make a complete list of everything that you pay out; use receipts, use your bank statement, use anything you can to give yourself a view of the full picture. Two things that can often catch people out are those which are variable expenses; gasoline, entertainment and food. Eating on base is almost always a more cost-effective option than eating out; but understandably, you might look forward to getting out now and again. This is perfectly fine, but you need to budget for it.

The USDA’s cost of food reports is a good tool that updates monthly to report the latest figures.

It is perfectly normal to expect a degree of fluctuation each month, just makes sure you update your budgets accordingly if your expenses change on a regular basis. If you run a car, then the annual service or oil change might not be a monthly expense, but it is something you need to plan for. These form part of a category that is otherwise known as ‘irregular expenses.’ It could be an Amazon Prime membership, car registration, your holidays, family birthdays, or similar.

For irregular expenses, the best thing to do is to break the cost down over a month; for instance, if your car registration is $120 a year, this is an extra $10 a month you need to add. Keep the money to one side, in a savings account or similar; this will ensure it is allocated and ready to pay out when the time comes.

#5 Balancing it out – Dealing with a surplus or lack of!

Ok, now that you have listed your income and expenditure, you will either be in the red or the black. If you have a surplus of money, and you are living on less money than you earn; this is great news. You might want to allocate more to your savings or give yourself a bigger allowance for eating out or entertainment.

However, if you are in the red, and spending more money than you make; you will need to make a couple of adjustments. In the military, your income is your income; so, you will need to find places to make some cutbacks. If you are dealing with debt, then consolidation could help you reduce your regular monthly payments; if you have been over-generous with your leisure budget, you might need to cut back and eat on-base a little more often.

Remember, it won’t be forever; it is a time-limited budget to get you through a specific period of time.

In Summary

As you know, structure is a huge part of life in the military. If you can apply the same level of discipline to managing your money and budgeting as you do for your job; then you can expect to find it far easier to manage your income and expenditure, and of course, reduce the risk of running into any kind of financial issues for your future.

There is a huge range of financial tools you can use for budgeting; including budget templates for military personnel, planning checklists, and more. 

Helping you navigate your military journey – OCS Connect is a free and open community dedicated to providing new service members and their families with expert advice and useful resources. We aim to help our members make the most from their military journey and prepare them for success.


©Our Community Salutes-USA. No part of the materials available through the OCSConnect.org site may be copied, photocopied, reproduced, translated or reduced to any electronic medium or machine-readable form, in whole or in part, without prior written consent of Our Community Salutes-USA. Any other reproduction in any form without the permission of Our Community Salutes-USA is prohibited. All materials contained on this site are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Our Community Salutes-USA.