By Jaimi Erickson
Contributing Writer
Deployments happen. Those separations can cause a lot of strain on maintaining a full-time career as a military spouse.
Over the past 20 years of my husband’s military service, we have made living on one full-time income work. With four children, a big grocery bill, and even some budget for travel, we have been able to live a full life. But to achieve that, we’ve had to do some smart budgeting and saving.
Managing a household on one full-time income takes some financial literacy. These are the action steps I take to maximize our household income with only one of us working full time. By following these steps, we’ve been able to build our savings without depriving ourselves along the way.
Tips for Building Your Savings with One Income
1. Get a Retirement Savings Account
From day one when my husband started working his military job, we set up his retirement account. Every month, before we see a dime, 10% of his income is allocated to the Thrift Savings Plan (TSP).
At first, it can feel like you don’t make enough money to save when you are a new military family. It almost felt like we were shortchanging our monthly income. To get over this mindset, you should focus on your long-term financial goals. I tried to keep in mind that this was a small portion of his pay, and it was going to grow over time.
After 20 years of military service, it is incredible how much his TSP has grown. With every new promotion, a bit more is added to the allocation each month. We don’t even notice until we see the TSP statement. Saving 10% every month has truly benefited our financial security for the future.
2. Maximize Deployment and Promotion Income
With a promotion comes more income. That is a great reward. However, when your servicemember gets promoted, don’t splurge or start spending it all right away. Set your financial goals first.
With each new promotion, we were able to save more. Our TSP allocation stayed at 10% of my husband’s pre-tax earnings, which meant the amount we saved each month was bigger. Winning!
When you are young, an increase in your income creates an opportunity to invest in your financial goals. You are already used to living on the pre-promotion amount. So, when your income increases, don’t increase your spending a lot. Saving half of the pay increase puts the money in savings for the future. We also do this with our tax return and deployment income. We save half of it in a brokerage account. Then, we use the other half to treat ourselves to something new. Many years we saved it, too. My husband’s last deployment allowed us to pay off our student loans. We paid every dime of our loans — while living on one income. How did we do this? When my husband would go on a TAD/TDY or deployment separation, we saved the extra pay.
Saving the extra pay allowed me to pay off our student loan debt faster without using any of our regular base pay. It helps to live on base pay and not raise your standard of living with each new increase.
As we moved closer to my husband’s retirement, we started saving all of our annual tax return. Having a large emergency fund is important. When you get to the retirement stage, that fund provides security and options in your budget.
3. Add a Side Business
My blogging business has turned into a way for my family to save more. When I first started monetizing my blog and working to build a side income, I saved every dollar. Our family lived off of my husband’s active-duty income. My income was put into a brokerage account. We did not include it in our regular everyday expenses.
Now as we transition to retirement, my side business is a big blessing. We have been able to live on one full-time income and use the second income to build our nest egg. If you work as a military spouse, and you do not need the extra income for survival, try saving or investing your income.
Military spouses can build careers in creative ways. Consider saving that income to help reach your long-term financial goals.
4. Career Gaps Can Contribute to Income
Throughout my husband’s military career, I was at home full-time. Because I had the time, I took on managing our finances. In a way, that was my financial contribution to our family.
As I learned to invest, and saw gains, I was bringing income to our household. Learning to manage our money, investing, and saving for our financial goals also provided me with a complete awareness of our financial situation.
With wise budgeting, investing, and smart spending, you may be able to take one full-time income and turn it into financial security.
Whether you are the money manager in your home, or not, your role is valuable. You can get financial planning guidance from AAFMAA, helping you focus on the big picture of your family’s financial goals.
Savings Insights from AAFMAA:
- 5 Easy Ways to Save Money Automatically
- 11 Tips for Saving Money in the Military
- How Military Saves Helps Military Families Stay Financially Ready
About Jaimi Erickson
Jaimi is a mom of 4, military wife, and writer. She blogs about motherhood, kids activities and homemaking tips at The Stay-at-Home Mom Survival Guide. Connect with her on Instagram, Facebook or Pinterest.
