Money Mistakes Made by Military Families

Lots of us make mistakes with our money — even me. There’s a lot to learn, and we’re always stumbling into new situations.

While I’m educating people about their finances, I see the same oversights again and again. While the big ones are more obvious, there are a couple of seemingly smaller mistakes that can be just as dangerous, but are not always as obvious.

No Renters’ Insurance

Renters’ insurance seems like such a small thing, right until you have a catastrophic disaster and you have to use it. Even if you think that you “don’t have much,” think for a minute how much it would cost to replace even basic furniture, kitchen items, linens, clothes and uniforms.

Plus, renters’ insurance covers more than just your stuff. While every policy may be different, it also usually covers your liability if you do something wrong. (Forgot to turn off the stove? Left the water running in the sink?) or if someone gets hurt at your house. And most policies include loss-of-use coverage, which helps if your house or apartment is uninhabitable for some reason.

Unless your belongings are covered under a homeowner’s policy, you should have renters’ insurance. It’s cheap, and most insurance companies offer it. Check with your auto insurer, and then maybe shop around for other companies. If you really research it, it might take you an hour to find a good policy. Don’t wait.

Lunches/Vending Machines/Drive-Through Spending

This is a personal problem for me. In normal times, I spend way too much of my allowance on crap food and drinks. Even a healthy choice of an unsweetened iced tea is $2-$3 at most convenience stores and fast food restaurants. Start getting into actual food, and/or a car full of kids, and that bill grows exponentially. Do that a couple of times a week and then, next thing you know, you’re spending $200 a month on, well, stuff you probably don’t need.

Thankfully, there are easy ways to cut back on the amount you’re spending on food and drinks. Stock your work and car with drinks and non-perishable snacks. My family likes individually sized bags of popcorn, nut, and granola/snack bars, plus water and Gatorade. It is not uncommon for someone to leave the house with half a meal to eat on the way somewhere. Plus, we try to bring our own drinks when we leave the house. Every little bit helps!

Misunderstanding Your Income-Tax Situation

Taxes can be confusing, so it is understandable that not everyone has a firm grasp on what is happening with their income taxes. Throw in the constantly changing details of military life, and sometimes it feels like trying to nail Jell-O to the wall.

However, if you don’t know what’s going into your income-tax calculations, you can’t make smart decisions, like whether a second job will be worthwhile, or whether you want to put your TSP contributions in as Traditional or Roth. For example, many military families discover that a second income means that they receive a smaller Earned Income Tax Credit (EITC), which makes that income a lot less valuable. And if they don’t know how that second job is going to impact their EITC, they can’t add that to the other costs of working to see whether the job makes financial sense.

There are a couple of ways to fix this issue. I recommend that everyone go through their income-tax return line by line, and learn what it means. If you try that, and you’re still confused, have a chat with your installation’s personal financial educator. They can point out important parts that you should know, and help you project how certain decisions will impact your tax situation.

Leaving Military Benefits Unused

Military service provides a wide variety of benefits to service members and their families. Sometimes they are a little hard to find, and sometimes they are a little hard to use, but there is a huge range of programs offered by both the services and private organizations. Many families don’t even know that these opportunities exist! I’ve seen everything from a military spouse who thought she “didn’t have health insurance,” to service members who think that tuition assistance is too difficult to use, to families who aren’t getting a military discount on their cell phone bills.

This one can be a little trickier, because programs and deals and benefits aren’t always obvious, but you should definitely do research to see whether there is any way that you or your spouse’s military service can help decrease some of your expenses.

Each of these items seems relatively insignificant, but you might be surprised at how much they can cost. At the worst end of the spectrum, an apartment fire is a disaster if you don’t have insurance. But even that $2 iced tea adds up!

Not Knowing Where Your Money Goes

The first thing that most people need to do is figure out what they’re spending. Sounds easy, right? You’d be surprised! For most people, when we sit down and write down their income and expenses, there is a relatively large number left over at the end. So I ask, “Do you feel like you have $900 left at the end of every month?” Almost everyone says no, that they’re broke at the end of the month.

This problem is somehow both the easiest and hardest one to fix. It’s easy, because all you have to do is write down what you spend. It’s hard because no one wants to actually do that or they intend to do it, and then they don’t.

This is also the solution that can make the biggest impact on your overall financial health. Just knowing where your money is actually going is the first step in taking control over your financial future. So whether you use an index card wrapped around your debit card, an app on your phone, or throw all your receipts in a basket and tally them at the end of the week, do something to keep track of that money.

(Pro tip: Check your subscriptions. Do you really need Pandora AND Spotify? Netflix, Hulu AND Amazon Prime?)

Transition: 5 Mistakes You Want to Avoid

Transition: It’s harder and easier than you think. At least that’s what I’m beginning to see six months after our transition out of the Marine Corps.

And while there was a lot I did right, there was a lot I did wrong, too.

So I sat down with my husband and his buddies for a Transition After Action Report to hash out the five things you shouldn’t do that don’t make anything better.

1. Don’t act like you’re finally bring sprung from jail.

When we found out we were leaving active duty, my first thought may have been one of fear, but my second thought was something like a happy dance on steroids.

I even blurted out, within seconds of learning that we were out and my husband’s career dreams were dashed, “On the upside, we don’t have to live in this pit anymore!”

Except I used much more colorful language. Obviously, this was not my finest wife moment.

While we all know the reality — that getting to move someplace you actually want to go and can build your own, non-order-related dreams about is a lovely idea — pointing this out right away isn’t always the most sensitive approach.

In fact, in doing so, I succeeded in not only hurting my husband’s already sore feelings, but my reaction made him think I wasn’t happy with the life he had worked so hard to provide for so long.

Not only was he now potentially letting us down by facing unemployment, but he’d also failed at giving us a happy life.

That was not what I intended. That was totally what I did.

Instead, let the news sink in for a while before you vocalize where else you can go. Even if you’re overjoyed that your local pub might not double as a strip joint, let things settle down and then reframe the conversation to suit your new life.

Think about where you both want to live next. Think about the places where you can both build your careers. Take the time to dream and be excited about it — without making it worse.

2. Don’t play the “fear” track on endless repeat.

“OMG what are we going to do!” is not the most supportive refrain during a time of transition.

Apparently, I said it all the time for about six months.

 

The future looked pretty terrifying with unemployment on the horizon. But repeating negative statements like this is never constructive.

Save your anxiety for talks with your friends and your mom, but do not repeat your very grounded, honest and reasonable fear like a broken record to your service member.

3. Don’t point out that civilian jobs aren’t known for their job security.

Every job Bill looked at made me nervous. Have they downsized lately? Didn’t they just do layoffs? Is it always last-hired, first-fired?

He would tell me about a new job lead, and I’d lob another question at him. Every time, these questions boiled down to: “Honey, there’s no job security there. You know they can fire you, right? Like, at any time? On any Tuesday? Ever?”

I was the opposite of helpful on this count. So while honesty is always the best policy, sometimes full disclosure isn’t the best approach.

You don’t need to state the obvious. Instead, you need to relax. Getting fired is a potential reality every day in the civilian marketplace. It doesn’t mean it’s going to happen.

Even if it just did, there’s no reason to think it will again soon. Give your spouse your faith, and the benefit of the doubt.

4. Don’t pretend it’s all OK.

“It’s going to be fine,” was a fairly constant mantra of mine (with the added “even if we are living in my mom’s attic,” which was a real possibility for a while there).

Bill finally looked at me one day and said, through clenched teeth, that it might not be OK, and I need to acknowledge that. Touché, husband. Touché.

He adds: “This is really hard, and pretending it isn’t happening is good for no one. Accept it, work with it, and figure it out. If you’re not doing any work to make it that way, don’t say it’s going to be OK. But you have to do something. Don’t just say it’s fine if you’re not contributing to fixing the problem.”

Luckily, there’s a lot you can do to help. No matter where you are in your transition, start with these five steps.

A little elbow grease can go a long way, especially where your family is concerned. This is why we hashtag all our transition content with #familyreadiness on social media. Because while this is all hard and new and difficult, it’s all also about the future safety of your family.

And the lessons you’ve learned and mastered as a military spouse will pull you through it — particularly when you have family readiness in mind.

5. Don’t forget how hard this is — even if you’re leaving by choice.

This is one we heard again and again from friends. It doesn’t matter if you’re leaving because you have to, because you’re told to, or because you want to: Leaving is leaving, and leaving is hard.

Transition isn’t just about leaving a job, it’s about leaving a whole lifestyle, and with that, your spouse is leaving behind the nominative modifier that has defined his life for the last however many years.

Be sensitive to this. Of course, he or she will always be a soldier, sailor, airman or Marine, but when they’re suddenly not that thing every day actively, it will feel different, and it will take some getting used to.

If your partner is anything like the ones we know, that may make him more moody or distant than usual. So know: It’s not you, it’s this. He’s redefining himself. It’s not easy. Don’t fight over it. Like anything else in life that is particularly hard, this too shall pass.