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Shaking the Money Tree: Tips for YOUR Military Family

I’m sure it comes as no surprise that you won’t get rich on your military paycheck alone.  Shoot sometimes I’m lucky to have a couple of dollars left in the account come payday.  However while the pay won’t set any records, there is much to be said for a steady reliable income that comes with some great benefits.

When we first came into the military we had to adjust to the decrease in pay, and frankly I wasn’t very good at it.  I didn’t know how to bargain shop, use coupons or buy strategically when things were on sale.  I had no idea how to live on barely enough to get by.  Thankfully my friend and coach Sandy Fowler[1] shared a strategy that changed everything.  And NO she doesn’t have magic money tree beans (I already asked).  But what she does have is the envelope system. Sandy showed me a way to live on cash and almost instantly my money stresses (and overdraft fees) went away.

When I began to implement the envelope concept, I actually was able to make ends meet and have enough left over to put into savings, SHOCKER I know!  For the first time ever, I could see where the money was going because we had a plan for how to spend it.

Gone were the days that I just went shopping to pass the time, and I no longer worried about how I would handle unexpected emergencies. I learned that the better I got at managing my finances, the less I needed “retail therapy”.  It was amazing how this simple strategy allowed us so much more freedom and before we knew it account balance began to grow.

The Envelope Exercise

The Overall Concept of this exercise is to help you learn to live on what you make and pay yourself in cash. Use a separate sheet of paper as you work through the exercise.

Bills are the reason for all my financial stress, or so I used to think. The truth is bills aren’t the reason we are frustrated with our finances. The fact that we don’t have a plan for our money, and spend without thinking is the reason that money causes so much pain. If there is too much month at the end of your money or if thinking about budgets and finances gives you a migraine then switching to cash can save you so much stress and heart ache. Living on cash is a way to insure that you don’t over spend and it will help you identify where your spending habits end up causing you financial issues.

Thankfully with a few envelopes and this information you will be able to come up with a plan that will have you balancing the budget no matter what your paycheck is. So let’s get started.

Simple Steps to Getting Back On Track With Your Finances:

  1. Find out where the money is going
    • Make a list of the fixed expenses  you have to pay each month: car payment, mortgage/rent, cable, phone, insurance etc.
    • Add the expenses that vary groceries, gas, utilities, clothing, entertainment, runs to Starbucks or out to lunch etc. (I suggest looking at your statements and getting the  average amount you spend on each of these items over the last few months)
    • With your spouse sit down and take a real look at where your money is going. Take a look at how much  you are spending on “wants” compared to “needs”, are his lunch trips to the chow mobile adding up or are your “retail therapy” sessions putting a  pinch on your budget?

You may be surprised where your money is going. I know I was shocked at the amount we spent when we ran in for a drink or snack at the Shopette. I couldn’t believe that our $3 trips added up to almost $100 a month.  By writing out where our money was going, we were able to see why our credit card balance increased and more importantly why we were broke all the time.

  1. Outline your money plan
    Once you have a clear picture of your fixed and variable expenses you can now create a plan. For years I HATED budgeting, it left me feeling like I was a little kid who didn’t know how to manage my piggy bank and though I denied it, the reality is that I had no idea how to live on a fixed income. The “Envelope Plan” changed all that.

For the first time I could have control of my money without feeling like everything would be better if only there was more of it. Here is the plan I used to turn our financial life around.

  • After taking the list of expenses, we decide how much each line item realistically should receive. For us when we looked at where our money was going, we realized that we were spending more than we were making.  We changed our cable plan, cut some of the expenses and began packing our lunches. We even decided to add a short-term savings and a slush fund envelope for those unexpected expenses or when something fun comes up at the last-minute by reducing how much we spent in other areas.
  • Designate an envelope for each expense. On the front I write what the expense is and the amount we have decided that expense gets along with the due date and how much I need to put in per pay check. For example some of the envelops may look like this:

1st of the month                               15th of the month

  1. Mortgage                   $900                     $450 /ck
  2. Cable/Internet          $125                      $75/ck
  3. Shopette Visits         $30                        $15/ck
  4. Entertainment           $100                     $50/ck
  5. Short term Savings  $30                        $15/ck
  6. Slush                           $40                        $20/ck
  7. Groceries                   $250                      $125/ck
  8. Gas –Me                    $40                         $20/ck
  9. Gas – Soldier man   $100                       $50/ck
  • Continue to adjust the numbers until the envelopes add up to your monthly take home pay.
  • This takes a little thought because we get paid 2 times per month, and most of our bills are due at the beginning of the month. So I split things up and I put half of the mortgage into the envelope on the 15th  and then make a deposit right before I pay the bill on the 1st.
  • The amazing part of this plan is that I don’t have to stress. When a bill is due or I need gas, I just go to the envelope and it’s there. It also allows me the flexibility to make choices. If I save money on groceries, I can use the left over cash for something else without worrying that a different bill won’t get paid.
  • Living on cash may seem a little weird at first, but it gives you a clear picture of your finances every time you look in an envelope. No more guessing about whether you have enough money to buy the gadget or go out to eat. Simply look in the envelope and you know.
  1. Each pay period withdraw your money in cash & pay yourself (into the envelope).
    • NO MORE SWIPING. You will be paying cash and using the money from the envelopes to make all of your purchases.
  1. Make deposits at the bank for items you’ll pay with a check or electronically, like your housing and insurance, as they come due.

[1] Sandy Fowler is passionate about helping women de-stress their lives. She coaches, writes, speaks and hosts a radio show all focused on weeding out stress and creating more joy in your everyday life. Connect with her at

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