When you decide it’s time to get your finances under control, it can be really tough at first. All this money stuff seems complicated. It might feel like you’ll never get caught up on your finances.
You’re not alone. Many of us who’ve enlisted in the military didn’t start off with a bunch of extra cash laying around. However, we all start somewhere. Just because you’re in one place today doesn’t mean that’s where you have to stay.
Measure Where You’re at Now
One of the first things you need to do is see exactly where you are financially. This doesn’t have to be anything crazy. If you want to get into the fine details, you can, but a simple list of all the money you have and all the debts you owe will work for now.
If you want to use the net worth tracker excel spreadsheet we use, then you can download it below.
You can also use a personal finance app like, You Need a Budget, Mint, or Empower (formerly Personal Capital). Don’t get too wrapped up in the details. Pick one and move on.
The biggest thing we’re wanting to do here is do a quick pulse check and give you a starting point. You’ll never know if you’re truly making progress if you don’t measure something. Taking the 30 minutes or so to see where you’re at is vital to understanding your situation.
Where Does it Hurt?
What’s the biggest issue you’re trying to take care of right now? You should probably put the fire out before starting on anything else. Even if you have bigger problems you need to tackle, you should deal with anything causing you to lose sleep first.
Make sure you use all the resources available to you. There’s nothing wrong with finding the nearest financial counselor on base. You can search on the Military OneSource website if you don’t know where the nearest counselor to you is.
You can also send Enlisted Money a question at: questions@enlistedmoney.com
One major thing here is not to beat yourself up too much. Just like anything else you’ve been handed at work, you still have to handle it. Financial issues don’t typically get better with time alone.
Stop the Bleeding
We all know from our first aid training that controlling bleeding and preventing shock are two of our biggest responsibilities in first aid. You have to do the same thing with your financial situation too. If this means doing something drastic like selling your car or not going out anywhere for a month, so be it. No matter what, you’ve got to stop the bleeding so you can regroup and get a plan together.
In financial terms, “stopping the bleeding” usually means making sure you aren’t spending more than you make each month. If you are out of money and relying on credit cards by the 5th and the 20th each month, you’ve got to cut some spending.
Get your financial tourniquet out and start tightening that sucker down. When we first started getting our finances in check, we didn’t do much of anything except for stay at the house and play Red Dead Redemption. Well, we did drink a few beers with the neighbors, but we didn’t go out to any bars or anything else.
The point is, you may have to drastically change what you’re doing – temporarily. It will be worth it in the end. Once we really got serious, we went from living for the 1st and the 15th to not even realizing it was payday anymore.
Later on, you’ll be able to do more than you are now and not have to stress about money as much. When we first started, there’s no way we could have bought a car with cash, went on a great vacation every year, or live the way we do now. Our commitment to spending less than we earn and building up our savings has made a massive difference in our life.
Make a List of Financial Priorities
Once you “stop the bleeding” it’s best to make a list of priorities and then pick one thing and move forward. Initially, we had a bunch of random credit card debt we needed to take care of. We focused on paying those off first and moved on to the next thing.
Trust us, we know how stressful being an enlisted military member can be. Trying to take on too many things at once is just going to get you frustrated and ready to quit (which, by the way, is not allowed). You just have to keep moving forward little by little.
Pick a System and Stick with It
It doesn’t matter what method you choose to tackle the rest of your finances, but you just need to get started.
The Total Money Makeover
For us, debt was a pretty big issue. We used Dave Ramsey’s The Total Money Makeover book to get started. This book and system aren’t perfect, but it works.
“My wife and I read The Total Money Makeover chapter by chapter and discussed everything. We slowly implemented everything that applied and started making progress” – Enlisted Money Guy
We like The Total Money Makeover because of its strong wording to get you to take action. Dave paints a pretty clear picture of what life will look like if you don’t get you finances straight – you’ll be eating dog food as a broke, elderly person.
We didn’t implement everything exactly how Dave recommends. We were always what some might call “Dave-ish.” There’s not a lot of military specific information and tools in the book (but that’s most personal finance books). Regardless, if you have a decent amount of debt, this book is going to be a good start.
If you want to hear my full book review, you can check it out on my other blog and podcast here.
I Will Teach You to Be Rich
I think if we were going to pick a book more closely aligned with how we actually operate, I Will Teach You to Be Rich by Ramit Sethi would be our choice. The title is maybe a little quirky, but there’s a lot of great information. We especially like the emphasis on automating your finances.
Another book we like regarding automation is The Automatic Millionaire – in case you’re interested.
Ramit Sethi also talks more about aligning your spending with what’s most important to you. This is where we veered off the Total Money Makeover path. We really value spending time together on vacations. We still take vacations, but we’re thoughtful about how much we’re spending.
The one place we deviate heavily with I Will Teach You to Be Rich is the use of credit cards. We use credits cards for trips or other purchases (and pay them off immediately), but we really don’t use them on a regular basis. Sure, you can use the points for things, but we’ve always found that we spend more money if we’re using credits cards. You can use your debit card to automate your finances and not have to rely on credit cards.
The “System” Doesn’t Matter if You Don’t Take Action
Regardless of what “system” you choose, you have to take action! Even just picking one tiny thing per week to work on will be a huge help. Set aside time to work on your finances. You’ve got to work to eliminate excuses and roadblocks keeping you from getting started and taking action.
Get Your Spouse on Board (if You Have One)
If you’re married, you cannot and will not do this on your own. If your spouse isn’t on board with getting your finances straight, you’ll be doomed from the start. Whether it’s reading a book together, setting financial goals, or having a “money day” together, you’ve got to have both of you involved.
Take Tiny Steps and Keep Going
I can hear Dori from Finding Nemo in my head right now, “Just keep swimming, just keep swimming….” You just need to keep going. Even if you “relapse” and make a money mistake, pick yourself up and keep moving forward. That’s not you anymore. It might seem impossible now, but you’ll look back one day and be amazed at how far you’ve come.
The alternative of living paycheck to paycheck, always dependent on the military for all your needs, isn’t any fun. You can do it on your own. About 93% of America hasn’t served in the military a day in their lives. We want the choice to continue to serve to be yours – not your bank account balance.
If you need help and encouragement along the way, drop us a note or fill out an Enlisted Money Confession. We’ll help connect you to resources and answer questions you may have. Good luck on your journey to financial freedom!