After years as a military officer, I am guilty of spending too much money. If there’s one thing I’ve always been sure of in the Army, it was my paycheck. And when I was deployed, the money was even better. With housing and medical covered, and no family to support, I got comfortable in my lifestyle. (Thank goodness I set up automatic transfers for savings/investments!)
Why am I bringing this up? For many, transitioning from the military isn’t just a career change, but a lifestyle change. We may be unemployed for a bit, earning less money, attending graduate school, moving to a more expensive location… a number of factors could leave us in a different financial situation from what we’re used to. It’s best to start preparing now, and learn better habits to help us in the future. Don’t get caught off guard like some high earners did when the economy tanked. Making more doesn’t mean you should spend more; putting money into your 401(k) and IRA is even more important for your future.
A Few Frugal Tips:
- Downsize. I live in a space entirely too big for one person… even two people. It’s taught me that I don’t like cleaning such a big space, and that I don’t use most of the space in my home. I’m fascinated by the idea of ‘smaller’ living, and excited to downsize to an apartment. My utilities bill will shrink accordingly! Also, with gas prices, downsizing that monster truck/SUV to a more fuel-efficient model makes sense too, especially if you have a long commute. We live ‘big’ in America, but it costs us a pretty penny.
- Build an emergency fund. In this economy, it’s especially important to have something to fall back on. Put away enough to last you about 6-8 months, should something unexpected happen. This is a smart security blanket to have as you transition. I try to put as much of my tax return as possible into that account.
- Coupons and discounts. I subscribe to the Sunday paper, and it pays for itself in one month of grocery trips with coupons. I am not an Extreme Couponer by any means (though I have a friend who was invited to be on the show) but I do save about $20 every time I grocery shop using coupons in conjunctions with sales. I also check RetailMeNot before I make purchases online, to get discount codes. These savings really add up over time! (And allow splurges on gourmet items at Fresh Market and Whole Foods!)
- Sell things you don’t need. Not only will you rid your home/life of clutter, but you’ll make some money back! I’ve done yard sales, eBay, and Craigslist, and I’ve made hundreds on stuff that was collecting dust in my closet/garage/attic. (You can even sell your old cell phones and electronics on Amazon and sites like Gazelle.) I also buy a lot of brand-name clothes and accessories, so selling items I don’t wear anymore at consignment stores was a no-brainer! You can also donate items to charity, and document it for tax deductions. Either way, money in your pocket!
- Cut back on the extras. I cancelled HBO, then cancelled my Netflix DVDs but kept the streaming service. When I move, I’m cancelling cable/satellite TV completely and using Netflix/HuluPlus. It’s significantly cheaper, and there’s so much to read/watch online for free or cheap these days. As long as I have high-speed internet, I have entertainment; why pay for the additional channels I don’t use/need?
- Pay in cash. It’s a great way to budget! I figured out that I was spending a lot of money on eating out at lunch, seeing movies, drinking coffee, and other ‘extras’ during the workweek. I decided to take a certain amount in cash out at the ATM on Fridays. That money was my budget for the weekend and following workweek; if I spent it, I knew I needed to pack a lunch or skip a night out. If I had extra money, I only took out the difference at my next ATM ‘payday’. It really helped cut down on mindless spending; those Starbucks trips add up, and you spend less when you see the cash dwindling in your wallet.
Look, I love what money affords us. I love international vacations, designer handbags, and I’d REALLY like to hire a maid. But I also love to save, and that affords me a lot of the ‘extras’ that we all love and deserve. So save money here and there, and be a little frugal… it will save you in an emergency, help you afford the things you really want, and take care of you in the future.
Check out A Beginner’s Guide to Frugal Living and What I Wish I Had Known When I Started Living Frugally on WiseBread.