Stretching your dollar on an Army budget
June 1, 2009
By Lora O'Neill
GROWING up, my family had little money. We had to watch things closely to make sure we made it through the month. My mother was very creative and frugal with money, so I didnAca,!a,,ct realize until later how little we had. IAca,!a,,cve carried with me many of those same values and recipes for life; live on what you have and get the most out of it. My husband didnAca,!a,,ct bring the same experiences, so there has had to be some re-training. So how does a single-income, E-4, family-of-three make it in Washington, D.C.'
It took looking at our finances on paper to realize weAca,!a,,cd have to be pretty careful when I left my job to stay home with our new baby. A major plus in our favor is that we donAca,!a,,ct have much debt to worry about. My degree was largely paid for by scholarships. We only use a credit card for monthly expenses and pay it off every month. We own a home we left behind in Texas, and now rent the property, which covers the monthly mortgage. We shopped around to find a great deal on a good vehicle and a great interest rate. Our debts are reasonable and we have great credit.
WeAca,!a,,cve also tried to sit down and decide our financial goals such as establishing retirement and college funds. We have a savings account where anything that doesnAca,!a,,ct get spent goes to hide. When we received our enlistment bonus and permanent change of station reimbursement, that money went directly to savings so we already have our six-month emergency fund.
In the investment class weAca,!a,,cve been taking, we learned the next step to financial fitness is Aca,!A"finding money.Aca,!A?
WeAca,!a,,cve saved tons of money by having no cable, Internet or home phone. We rely only on cell phones and use local free Internet options. We save money on our cell phones with a military discount, sharing a family plan and splitting the bill. We do lots of Aca,!A"at homeAca,!A? games and activities, so we donAca,!a,,ct spend much on recreational activities.
Food seems to be the big place in our budget where money was heading down a black hole. Now, we take lunches and snacks for work and play. We purchased a water filter to refill water bottles too. We also cook double- and triple-sized dinners and freeze leftovers for laterAca,!"a great time saver that keeps us out of restaurants and away from takeout. When we do go out, we try to make it a special occasion and always use coupons and ask for military discounts.
Groceries were the other part of our food budget. Our biggest asset was living near a wholesale club. We donAca,!a,,ct live on post but the club prices seem to be comparable to the commissaryAca,!a,,cs. During the week we make our list and I look for coupons that apply. We purchased a subscription to the Sunday newspaper to get the double packs of coupons included.
There are many shopping tactics out there. Rule #1: Make a list and stick to it. We buy the largest package we will use without going overboard on bulk products. Also be aware that five for $10 does not always mean you have to buy five to get the discount.
Pricing groceries is another great way to save money. If you can, cross-check your favorite items among various stores to compare prices. We found that between the three local stores we were frequenting, we saved 25 percent at one store over the other. However, we also save 25 percent over that store by shopping at the wholesale club. It will also give you a good idea of what a real sale price is (to stock up) and it will help you verify that the scanner priced items correctly at checkout.
There are many spending categories. Take advantage of on-post benefits; entertainment, counseling, medical and legal (including free wills). Use public transportation for commuting (possibly allowing you to eliminate a car from your family) and make sure you get reimbursed, if that is an option.
Whatever you spend your money on, get something out of it. We use a cash back credit card for all our regular spending then pay it off at the end of the month; $500 a year just for spending on a card, building credit and keeping our own money until the end of each month. We also have a cash-back card for our wholesale club that brings in $200 a year from those purchases. ThatAca,!a,,cs almost a whole month of savings money for our retirement and college funds, just in cash back.
As a family, we have a lot of costs that Soldiers without children donAca,!a,,ct have. Children are costly when it comes to food, clothes, diapers, childcare and play. To cut costs, make your own baby foodAca,!"just steam/cook, puree and freeze. Consignment sales and shops are wonderfulAca,!"visit them, stock up and save. You can sell your stuff there too. Join playgroups for reading or activity time to avoid gym fees. Many playgroups also have a subgroup for childcare swapping. WeAca,!a,,cve also mastered (or almost mastered) the military haircut at home.
So whatAca,!a,,cs our next step' Well, weAca,!a,,cve accounted for thousands of dollars we arenAca,!a,,ct spending, but that doesnAca,!a,,ct mean itAca,!a,,cs in our savings account, just that weAca,!a,,cre living within our means. We are putting some extra money toward our mortgage, because every little bit now really means a lot saved over the years. We are looking into opening a college savings fund and purchasing CDs on a tiered-ladder system with our emergency fund. Our plan is to search for the best CD rates we can find (FDIC- insured of course) and purchase stair-stepped CDs: six months, one-year, two-year and three-year. Long term, my husband plans to take advantage of Army college tuition assistance and earn promotion points.
<b>One Army familyAca,!a,,cs savings rules</b>
THRIFT is said to be Aca,!A"the new black.Aca,!A? The easiest way to stay on a budget is to have accountability and help. Figure out your approximate budget, even if all you do is download your bank statements and credit card statements and look at them; figure out where your money is going. Fiscal responsibility is spending within your budget. Financial advisors are available on base at no charge to help you figure your budget, consider the future and set goals.
<b>No cable or Internet service: </b> Our family owns a few videos we watch occasionally. We also have access to our apartment-complex computer lab. There are also plenty of public access Internet locations available. Annual savings: $1,200.
<b>Shop around for major purchases: </b> We spent two months waiting to buy our gaming console. We watched prices and availability, and bought only when we found it for a reasonable price. It is also a good idea to wait at least a month before making big purchases to stop impulse buying. Buy something because you really want it, instead of finding out later you didnAca,!a,,ct really want it. Annual savings: $1,440.
<b>Cook double and triple dinners and freeze for later: </b> We make constant use of our crock-pot and our deep-chest freezer. We make casseroles, pot roast, soup and lasagna for three, two-person meals and pack up the leftovers for other nights. This saves money, time and the temptation to eat out or order takeout when schedules get tight. Annual savings: $2,400.
<b>Limit entertainment spending: </b> Do you need to rent a movie every night, or go bowling with the gang' We made an investment in a gaming console; so now bowling can be at our house every Friday. And, we get a fitness center with the gaming console, which saves on paying a gym membership. Annual savings: $960.
<b>Grocery shopping: </b> Use coupons whenever possible. DonAca,!a,,ct forget about online coupons at coupon sites or company sites. Annual savings: $960.
<b>Know grocery prices: </b>
List all of your regular grocery purchases for a month and comparison-shop your store versus other area stores. Annual savings: $1,800.
<b>Shop at wholesale clubs: </b>
Wholesale clubs seem to have prices comparable to the commissary. Annual savings: $1,800.
<b>Take lunches to work and play: </b> Going to work or on childrenAca,!a,,cs play dates, we always make it a point to pack lunches and snacks for everyone going. Annual savings: $3,360.
<b>Food pyramid guidelines: </b> This one may not apply to every family but after meeting with a dietician, I realized our family had been eating four to five times the number of servings of meat recommended by doctors and the food pyramidAca,!"these are usually the most expensive items. Now we buy healthy, lean meats, but less of them. Annual savings: $960.
<b>Consignment sales and hand-me-downs: </b> These are fabulous. We purchased two seasons/sizes of clothing (16 outfits), plus three toys, two pairs of shoes, a floatie swimsuit and an outside coupe wagon for a total of $100. We also consigned at the event, and the items we sold brought in 55 percent of what we spent on our purchases. In the end, we only spent $32! Annual savings: $500.
Aca,!" Coffee shops are nice, but use your coffee maker; splurge on name-brand coffees in a bag and brew them at home.
Aca,!" Listen to the radio instead of buying CDs.
Aca,!" Save on utilities by turning off lights and washing full loads of laundry.
Aca,!" Grow your own produce and herbs.
Aca,!" Make your own gifts for friends; cookie mixes in a jar, homemade hand lotions and candles to name a few.