It's common for military members to refer to their spouse as the CFO of the household. While it's a wonderful compliment, it also means the military spouse has the responsibility and stress of properly managing the family's financial goals.
Building financial success is a long-term plan and does not happen overnight. It comes from years of learning, growing, making mistakes, and sometimes pure trial and error. There can be additional issues to work out when dealing with military family finances, since one parent may be gone for long stretches during deployment. But there also are programs offering financial assistance for military families that can help you take care of your family.
This article looks at the steps to help reduce financial stress on a military spouse and better prepare for the unexpected by learning how to manage budgets, life events, and goals.
Common financial challenges for military spouses
Military families face a lot of the same financial challenges as non-military families, but there are some life events and associated expenses that often only come up for service members.
Deployment
Protecting our freedoms shouldn’t hurt your finances. As the spouse left at home, taking care of the family budget will be your responsibility during your spouse’s deployment — if it isn’t already. As you prepare for an upcoming deployment, check out this article on 10 things to do before deploying.
PCS
A military move, commonly known as a PCS, can be a fun but stressful time. And, if done wrong, it can cost you your hard-earned cash. As you prepare for your next PCS, USAA believes that each military family should have a moving fund to cover unexpected costs. A good rule of thumb is to set aside $2,000 plus whatever is required for your particular situation, like the cost of moving a boat, an RV, or excess household goods.
To help you plan for your next PCS, USAA has a moving checklist that you can personalize to your situation. You can find it here.
Career gaps and spousal unemployment
Frequent moves can often make it hard for a military spouse to hold down a job. In fact, a recent study shows that the military spouse unemployment rate is 21%, while the U.S. national unemployment rate is 3.7% as of April 2024 Opens in a New Window. See note 1 That’s a big difference.
That’s why USAA has teamed up with RecruitMilitary to help military members and military spouses find their next jobs. Find your next career or steppingstone by visiting RecruitMilitary Opens in a New Window. See note 1
Strategies for overcoming financial stress
Military family finances can be stressful, but there are a few strategies that can help you cope.
Communication and planning with your spouse
Both spouses don't have to be involved in every detail of a military family’s financial planning, but you should align on what you're hoping to accomplish.
Consider taking your special someone on a financial date, where you talk openly about your financial planning and begin to formulate a plan and shared goals. The first time you have this conversation may be difficult, but the more it happens, the easier it becomes.
Budgeting and expense tracking
After your financial date and once you and your spouse are on the same page, the next step is to build a family budget. This should include a plan to reach your short and long-term goals.
One example of short term savings goal is an emergency fund. For that goal, it's recommended to start with a goal of $1,000. Once you've saved $1,000, continue saving until you have three to six months of living expenses. Consider a liquid account that you can access quickly to cover any unexpected expenses, like a savings account.
So how do you start saving? Set aside a percentage of your income that's realistic for you, whether that's 1% or 15%. Then continue to increase your rate of savings with every promotion and merit increase you receive. Strive to save 10% or more of your income consistently.
Automate your finances.
Setting up automatic payments can help ensure that you don’t miss a due date on a bill. Many banks offer free online services that make paying your bills automatic. There's a freedom that comes from not having to keep track of due dates for various family payments. Automatic payments can also help you avoid late fees, which add up over time.
You also can automate your savings. Consider using an automatic funds transfer to support your long- and short-term savings goals. By automating your savings contributions, you can adjust to the income that’s left after your savings are deducted. If you never see the money you’re setting aside, it becomes a lot easier to live without it. This increases your chance for long-term saving success. You can find USAA Federal Savings Bank’s savings tools here. See note 2
Manage your debt.
Debt is a major cause of financial stress for many people. It can feel like a weight is always on your shoulders. Once you rid yourself of unwanted debt, you will gain a sense of financial peace and the freedom to pursue other financial goals.
If you have credit card debt, check out this article on 6 tips to pay down credit card debt in a year. If you are thinking about debt consolidation, check out this article on if you should use a personal loan to pay off debt.
Finally, if you are looking for a go-to guide on debt management, check out USAA’s how to pay off debt page. Here is where you’ll learn to implement the three A’s of debt: assess, avoid, and attack.
Take advantage of military benefits.
As a military family, you have access to resources specifically tailored to meet the unique needs of service members.
TRICARE
TRICARE is a health care plan built exclusively for military members and their families. TRICARE is available to active-duty service members and their families; those in the National Guard National Reserves may be eligible depending on their duty status. TRICARE is usually accepted anywhere Medicare is accepted, and generally your out-of-pocket medical service costs are going to be little, if any.
Additionally, members of the National Guard and Reserves often have a choice between TRICARE and their civilian health care plan. Read this article to learn how to decide between the two.
SGLI and FSGLI
Servicemembers' Group Life Insurance (SGLI) and Family Servicemembers' Group Life Insurance (FSGLI) offer low-cost life insurance coverage to eligible service members and their families. SGLI or FSGLI coverage could be the starting point for meeting your life insurance needs, depending on your family's situation. Though keep in mind you may need more coverage — check out this article to learn why SGLI might not be enough.
Consider the acronym LIFE (liabilities, income replacement, final expenses and education) as an easy way to determine the amount of total life insurance you need. You can use USAA’s life insurance calculator to find the coverage amount that’s right for you.
Other ways to ease stress on a military spouse
Get renters insurance.
If you’re living in a rental home or apartment, a great way to help protect your personal possessions is renters insurance. This insurance protects your belongings in case they're damaged, lost or stolen. Some renters insurance policies will even replace your military uniforms and gear in the event of a covered loss.
USAA Renters insurance is easy to transfer when you move and will help cover your personal property anywhere in the world. See note 3 After purchasing insurance, create an inventory of your possessions and consider supplementing this list with photographs or video in case you need to file a claim.
Understand your auto insurance policy.
If you own a vehicle, it's a must (and often a legal responsibility) to have auto insurance. Not all auto insurance policies are equal, so it's important to understand your individual policy to ensure you're covered in the most efficient manner. Think about how your driving habits may have changed in the past year, as annual mileage is a rating factor in the majority of states. Be sure to ask about discounts when reviewing your auto insurance as discounts change often and can vary by location.
It's also critical to understand your deductibles and coverage limits. Higher deductibles and lower limits will often lead to a lower monthly payment, but that may also mean a higher out-of-pocket cost if an accident happens. As a starting point, strive for liability limits that cover your net worth. You should review your auto policy at least once a year and with any major life changes.
Get your legal documents in order.
You’ll want to have power of attorney forms and other estate planning documents in order before a deployment or PCS. These documents can be customized to provide you and a loved one the ability to act on behalf of each other. Read this article to learn more about the six powers of attorney that benefit military members. You can visit your local servicing Judge Advocate to help you create these documents and more.
Join a spouse support group.
Military units often have family support groups that you can join to help you connect with other military families. The family support group is made up of volunteer families within the unit who work to alleviate stress for service members and their families and ease the transition into their new location. They often plan fun events that you can attend by yourself or with your family. Visit the Military and Family Support Center on your installation to learn about the groups in your area.
Finally, it can be frustrating when things don’t go as planned, but it happens to all of us. In moments of frustration, remember the plan you built for your family and take a few minutes to visualize long-term success. Understanding the path ahead can make it easier to handle life's inconveniences and reduce stress at the same time.
Resources for military spouses
Let USAA help you navigate the ins and outs of military life.