By Stephanie Carroll
U&E Founder
Author of Historical Fiction Novel A White Room
I touched on the topic of money with my article entitled
the Top
Five Pitfalls of New Navy Girlfriends & Navy Wives, but I feel that I
could give you gals a little more than just a warning.
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| Photo by Jenifer Correa via Flickr cc |
I’ll tell you right now that I’m no financial expert. I
don’t have a degree in it, but what I do have is pudding – proof pudding. When
I first met my husband, he didn’t need money for anything. The Navy covered all
of his life expenses except for his cell phone, so after paying that and buying
a beat-up van, he made a game out of spending all of his money every month – I mean
literally. He did it on purpose. He was only making $800 a month at the time
but still! At that time, I was making $800 a month and paying rent and
utilities and I was just aghast.
When we first started living together, he offered to
support me through college so I wouldn’t have to work. I accepted before I
really understood that his bank account was at zero on a regular basis. I’ll
tell you what, before our first deployment, there were times when we had to bum
food off of our roommates and survive off of canned tuna and saltines.
But during his first deployment, when he handed over the reins
to the finances, I took ahold and veered us back onto the green road. By the
time he got back we had $3,700 in our account and a brand new car with
affordable payments. We both agreed, I was officially in charge of the money. Ten
years later, we own a house, multiple vehicles, two small sailboats, Roth IRAs,
a comfortable mutual funds account, and our only debt consists of our mortgage
and a single car loan. As I said—pudding.
So how did we build this comfortable lifestyle from an
empty bank account, tuna, and saltines?
Top Money Tips from a Financial Savvy Navy Wife
1.
Save
that extra pay during deployments and debts.
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| Saving Money by 401(K) 2012 via Flickr cc |
That’s how I got us out of the
original paycheck to paycheck lifestyle. A lot of people like to save that
money and then blow it on something once the Sailor gets back, i.e. a new car
or a vacation. We just kept it and grew it. Same thing with our tax return.
Saving a chunk of money is
important not just so that you don’t have to live paycheck to paycheck but it’s
also important to have for emergency financial situations like a broken car or
a root canal. According to How
Much Money do I need in My Emergency Fund on About.com, experts recommend somewhere
between 3-12 months-worth of living expenses. To find out how best to calculate
your specific amount, check out the About.com
article.
What about for retirement? According
to the article How
Much Money should I Save from My Paycheck on How Stuff Works, the average
20-year-old should be saving between 10-15% of his or her yearly income. If you
are older and haven’t started saving yet, then you’ll need to start with a
higher amount if you want to be financially secure for retirement. More wise
financial moves for the future at #10.
2. Keep Track of What You Spend = Budget
I’ve had a lot of people tell me they don’t know how to budget. Budgeting sounds hard and overwhelming if you don’t know what it is, but it’s actually kind of easy and obvious once you do.
Start by tracking your expenses for one month. Find out where and why you spend money, add up how much you spend in the most common places, and then you will have a basic idea of what you spend on food, rent, car payments, bills, etc. There are certain expenses that are unavoidable like rent and bills, but once you separate those out, you are left with the expenses that you can control like shopping, restaurants, fast food, bars, etc.
Creating a budget means, that once you know what you are spending, you decide that you are going to spend only X amount on each category per month. So only spending $20 on fast food a month or only $100 on restaurants. Maybe you decide to stop going to bars because it turns out you have been spending a crazy amount there. That’s budgeting.
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| Budgeting by Keith Ramsey via Flickr cc |
When my husband and I got married in 2004, there were no smart phones or computer programs to help you with this, nothing that didn’t cost you at least. I kept track of my expenses by saving every single one of my receipts and I made my husband save receipts too. Then I’d write down every expense by hand in a balancing check book. Then, I’d go through it and find the categories and add those up on a separate sheet of paper. Whoa.
Nowadays, budgeting is so freaking easy, it’s not even funny. Most banks have expense tracking built right into their websites. You can also plug your bank account info into a free app like Mint, and it will track your expenses for you. Just make sure you have double checked the site before you hand out your bank account info.
3.
Discuss
Large Purchases with Each Other Beforehand
My husband and I try to discuss
any purchases over $100 other than groceries. That way when you do want to buy
something like that, you are forced to wait, to talk about it. This accomplishes
two things: It prevents impulse buys and if you don’t have the money in the
budget for a dirt bike, you can both make that determination before making the
purchase.
I know for a lot of Navy Wives,
and Girlfriends too, talking money with your Sailor is not an easy or delicate
operation. I admit even though my husband and I have money talking policies, we
still have plenty of fights about money. It’s one of those top things couples
fight over, but you still have, HAVE to talk about money if you ever want to be
financially secure as a couple and a family.
Here are some resources that
might help:
For some couples this may even
require counseling, either financial or couples counseling. Either way, the
Navy’s Fleet and Family Support Center offers free assistance in both of those
areas. FFSC doesn’t have a single website otherwise I’d link to it. You have to
find your region first or you could just visit the one on your local base. Your
base’s Navy-Marine Corps Relief Society
also has classes.
4.
Affordable
Payments
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| Photo Park Place Expensive Real Estate Monopoly by Phillip Taylor via Flickr cc |
I can’t tell you how many times
I heard about Navy couples falling into hard times after buying a car that required
a humongous payment. This goes for anybody actually, not just Navy couples.
According to the article 10
Money Rules of Thumb to Stay in the Green in The Chicago Tribune, your car
payment should not be more than 15% of your take home pay and your house
payment should not exceed 29% of your gross monthly income.
Avoid purchases that are so
large you have to make payments. It’s better to save and have the money to purchase
things outright. Otherwise you will end up paying much more than what the item
is actually worth, which I explain a little more in my next tip.
5.
Credit
Cards are Only for Building Credit
Credit cards should only be used
to build credit, so make a small purchase with it every month and then pay that
purchase off completely. Once you have the credit to have a car loan or a
mortgage, you don’t actually have any reason to need a credit card. Paying off
that loan or mortgage will keep your credit healthy.
Credit cards should not be used
to buy something expensive and pay for it long term because it’s just a way to
build debt and pay more for junk. Even people who have those fancy smancy cards
are still paying something between 14-20% interest. What does that mean?
According to The
True Cost of Credit Cards on About.com, if you purchased a $2,500 plasma
television with an 18% APR/interest rate and only paid the minimum monthly
payments of $50, you would end up paying off that one television for 28 years.
In the end, you will have paid nearly $9,000. There are no exceptions. If you
have an interest rate or APR, you will always pay more than the original price.
Learn how to calculate long term
credit costs using The
True Cost of Credit Cards article.
6.
Buy
Cheap – Cheaper than the Commissary & Especially the Nex
One of my big pushes has always
been to save on the grocery bill. I’ve known people who spend up to $400 on a
single grocery trip because of an insistence on going to luxury grocery stores or
because of an insistence on purchasing name brands.
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| Photo by marsmettnn tallahassee via Flickr cc |
Just by switching to a discount
store such as Walmart, FoodsCo, or Cost Less, you can save a tremendous amount
even on name brand items, but then if you start using generic, the cost goes
down even more. Some people struggle with the fact that you can’t buy
everything you need at one store but that is sometimes the cost of saving. My
solution is to just visit the luxury store and stock up on that specialty item
so I don’t have to visit three stores every week.
Another thing is that a lot of
Navy couples assume that because the Commissary and Nex are tax free that means
they are cheaper. Not always the case. For a while I switched from FoodsCo to
the Commissary and discovered my grocery bill went up. And the Nex, OMG, that
place is expensive. It’s just a department store. You could get the majority of
that stuff for less at Walmart and possibly Target. Sure the base stores are
closer, but saving isn’t always convenient, it’s just worth it.
Here are some more tips:
7.
Review
Finances before Major Life Changes
Every time you have a major life
change, such as a new baby, a new house, a move, a new job, getting out of the
Navy, you should review your finances. While I volunteered at the Navy-Marine Corps Relief Society, I learned
that one of the major reasons Navy couples get into financial hardship is
because of a failure to plan financially for a new baby. If you are pregnant or
trying to get pregnant, start planning for how you will afford this major life change now. Some people think
babies don’t cost much, but a baby is just another person you have to pay for
to feed, clothe, and house.
Check out A
Nine Month Plan for Getting Your Family’s Finances in Order or Google for
more articles on the subject or on how to plan for a different life change.
8. Avoid Expensive Toys
Navy culture encourages military couples to buy expensive toys to fit in with the other Sailor couples, and a lot of these are boys’ toys that wives don’t even want, i.e. trucks, big screen TVs, expensive video game consoles, etc. Although wives have their vices too.
Even though I described us as having several cars, most of those were used, and that brand new car I talked about buying at the beginning of our marriage—we kept it for nine years. No joke, we didn’t buy another new car until this past weekend, almost ten years after our first deployment.
Many times over the years, my husband wanted something that his friends had, something he wouldn’t have wanted if his buddies didn’t have it, but after really talking about it, he realized fitting in wasn’t worth financial hardship. This brings me to my next tip.
9.
Don’t
keep all Your Financial Aid
I knew so many people in college
who always talked about living off of their financial aid and spending it on
stupid stuff when they should have just lived on a budget and given as much of
it back as they could. These people now complain that they will never pay off
their student loans.
I will pay off my students loans
in a couple of years and I graduated college in 2008. My secret was that I only
used financial aid money to pay for classes and books. Everything else I
incorporated into our budget. At the end of every school year, I used the
remaining financial aid money, sometimes up to $3,000, and made an early
payment on my student loans. Just because you have money, doesn’t mean you have
to spend it.
Although if you are a Navy Wife,
get on that Military Wife Scholarship train if you can! Google “Military Wives Scholarships”
to get the mother-load or start with Military.com’s
Military Spouse and Family Educational Assist Programs.
10. Make Wise Decisions for the Future
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| Official US Navy Page Sailor Reads a Pamphlet during ... via Flickr cc |
Even though we have Roth IRAs
and a mutual fund account, I still don’t feel like we are all set for retirement.
A lot of Navy couples don’t ever think about things like life insurance or
retirement because the Navy tends to provide that stuff, especially if your
Sailor is planning on going career. However, do you know how much money you
will actually receive upon military retirement? Do you know how much it will
cost to support your family when you do retire? What exactly does your Military
life insurance policy cover? Is it even life insurance or something different?
If your husband is planning on
going career, just double check on what exactly your life insurance coverage is
and what retirement would actually look like. If you then feel comfortable, woohoo,
but if you don’t, you might want to look into getting a Roth IRA, a retirement
fund, or just invest.
Oh and if you have kids, don’t
forget about planning for their college and weddings.
Here’s some more:
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About Stephanie Carroll
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| Photo by Randy Enriquez |
After ten years of learning in the Navy, I founded Unhinged & Empowered. I wanted to spread the knowledge that I needed when I was new, to reveal what took years for me to learn.
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| Cover Design by Jenny Q |
In addition to being a Navy Wife, I am also a novelist. I write historical women's fiction.
My first novel A White Room debuted in 2013 and is about a woman forced to sacrifice her own ambitions of becoming a nurse to marry a man who can save her destitute family. He moves her to a strange, small town where she slowly succumbs to madness until she stumbles on an opportunity to nurse to the poor despite the fact that her husband prosecutes unlicensed practitioners.
My first novel A White Room debuted in 2013 and is about a woman forced to sacrifice her own ambitions of becoming a nurse to marry a man who can save her destitute family. He moves her to a strange, small town where she slowly succumbs to madness until she stumbles on an opportunity to nurse to the poor despite the fact that her husband prosecutes unlicensed practitioners.
Learn more at www.stephaniecarroll.net and connect with me @CarrollBooks on Twitter, Facebook, or on Pinterest!
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