Financial literacy can pose a major challenge for veterans and their families. This spending plan can help you account and save for all expenses, short-, middle-, and long-term.
Since 2002, Operation Homefront has been proudly serving America’s military families. Our organization provides relief and recurring family support programs and services throughout the year to help military families overcome short-term difficulties, so they don’t become long-term hardships. But it doesn’t end there. Operation Homefront also offers the assistance of financial counselors to educate military families and help them establish financial literacy, at no charge.
Use these tips to help your military family realize a strong, more stable, and more secure future.
The importance of a spending plan
A personal spending plan is a great tool to take control of your finances. By calculating your income and expenses, you can make informed decisions about your spending and saving habits. Establishing a well-planned spending strategy is a beneficial step toward reaching your financial goals.
Why is it essential to have a spending plan?
- To ensure that bills are paid on time and avoid unnecessary financial stress.
- To prioritize needs and wants.
- To plan for irregular and/or unexpected expenses.
- To plan for future financial goals like buying a home, saving for retirement, etc.
What does a spending plan include?
- Income: Include all sources of income such as paychecks, disability compensation, education benefits, tips, loans, scholarships, child support, and other cash benefits.
- Your Expenses:
- Fixed Expenses: Stay the same each month, such as rent, car payments, and insurance.
- Variable Expenses: Change each month, such as fuel, groceries, and utilities.
- Occasional Expenses: Occur less than every month, such as auto maintenance, gifts, holidays, and annual dues/fees.
- Savings: Consider the following types of savings accounts when brainstorming financial goals:
- Emergency savings: Unexpected expenses, such as medical emergencies, employment loss, and auto or home repairs. Consider contributing a fixed amount every month, working toward saving three to six months’ worth of expenses over time.
- Revolving savings: Expected expenses, such as vehicle registration and gifts. Add together all periodic expenses over a year and divide by 12 to get the total fixed amount to save each month.
- Retirement savings: Replace income shortfalls in retirement. Take advantage of all retirement benefits provided by your employer, such as employer match.
- Big purchase savings: Save for a significant planned expense, such as buying a house, a vacation, or a down payment for a car. Ideally, all other savings accounts should be funded first, with any leftover savings placed in this account.
- Evaluate your plan: Subtract all expenses from your income. This will help you determine whether you need to seek additional income sources to cover any remaining expenses.
By monitoring spending, it becomes easier to identify areas where adjustments are needed to improve overall financial management. Moreover, keeping track of spending habits will help you gain valuable insight into financial plans.
Useful tools
There are various online tools designed to give you a simple way to create a spending plan, keep track of your spending, and help you stay on track to meet your goals:
- Office of Financial Readiness: Managing Your Money
- Good Budget: This virtual budget program keeps you on track with family and friends with a time-tested envelope budgeting method
- Budgetpulse: You can organize your cash flow, expenses, and bank accounts in one place
- Vertex42: Zero-Based Budget Worksheet: Download a free budget worksheet based on the zero-based budgeting method
- Practical Money Skills: Budget & Goals
- Practical Money Guides: Budgeting Basics – Learn to create and stick to a budget
- Ramsey: EveryDollar: A tool for achieving your money goal
- Spending Tracker: Before deciding on changes to your spending, it’s a good idea to understand how you use your money now.
- Berkeley Center for Financial Wellness: My Spending Plan Spreadsheet
- PowerPay: Debt Reduction Tool
Other financial resources
- VA Financial Literacy: https://www.benefits.va.gov/benefits/financial-literacy.asp
- Office of Financial Readiness: https://finred.usalearning.gov/
- My Money: https://www.mymoney.gov/
- VetCents: https://veteransbenefitsbanking.org/vetcents/
Are you an active-duty military member or a veteran struggling to make ends meet? Are you deployed or dealing with a service-connected wound, illness, or injury? If so, you are not alone. Fortunately, there are organizations that help veterans financially during times of financial crisis, such as Operation Homefront’s Critical Financial Assistance program. Our program is designed to provide short-term financial help for military families who are experiencing financial hardship.
