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3 Money Challenges for Military Families

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Finances are front and center in the recently released 2014 Blue Star Families Military Family Lifestyle Survey.

But not in a good way.

A hefty 60 percent of survey respondents reported having "some" or a "great deal" of stress related to their current finances. Participants also identified three primary obstacles to their financial security: spouse employment, uncertainty in military life and potential benefits changes.

Because you may be facing similar concerns, let's talk about those sources of financial stress.

Spouse employment

I'm excited to see the government and private sector put more energy into helping military spouses find work. Hopefully, you're seeing the fruits of their labor, but there's still work to be done. Roughly 60 percent of U.S. families are dual income, but those numbers don't hold true for military families. According to the Blue Star survey, only 43 percent of military spouses are employed -- and many who aren't want to be.

Stress-reducing suggestions: Strive to build a lifestyle based on one income. Alternatively, develop a spending plan where your fixed core expenses can be covered with military pay and allowances. If or when your family has two incomes, focus on building a cash cushion for when you don't. Just writing that leaves an empty feeling in the pit of my stomach, but taking charge of your spending and building up your reserves will strengthen your finances.

Uncertainty in military life

Military families face big questions that make planning hard. When will you move again? Is a deployment in the cards? Should you rent or buy? Will you be able to continue your career or get a job at the next duty station? Will you be caught up in force shaping? For today's military family, there are no guarantees.

Stress-reducing suggestions: Make it a top priority to build a robust emergency fund to cover three to six months of expenses. Too often I hear this downplayed as a requirement for military families, but in today's environment it's even more important as a tool for addressing the unknown. Beyond that, try not to make financial commitments that could become a burden if your circumstances change. For instance, tread more cautiously than your civilian counterparts with housing decisions (when in doubt, rent). And the same goes for auto purchases (avoid those six- and seven-year loans).

Potential benefits changes

Military retirement and health care are targets for change. Retirement cost-of-living adjustments for those entering the service in 2016 and beyond have already been reduced. And as Washington looks for ways to slash spending, more cuts could be on the way.

Stress-reducing suggestions: Until Washington actually makes some of these cuts, it's hard for me to categorize them as obstacles. That's not to say that benefits changes aren't possible, but at least they're still in the talking stage. To prepare for possible military retirement changes, start or save more in the Thrift Savings Plan. Whatever the outcome, you'll be better prepared. And don't forget to make sure your voice is heard by contacting your representatives and supporting organizations.

Shortly after I left active duty, I attended a conference I still remember 20-plus years later. A motivational speaker discussed how successful people focus their time, emotion and efforts. His bottom line: Exert a lot of energy on the things you control and little to none on those you don't. That's great advice for attacking the challenges of military life -- especially those highlighted in the Blue Star survey.

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Contributor

USAA, a diversified financial services organization, is the leading provider of competitively priced financial planning, insurance, investments, and banking products to members of the U.S. military and their eligible families. Rated among the highest among financial services companies for customer advocacy in a Forrester Research survey, USAA provides convenient and accessible financial products to its more than 9 million members. For more information about USAA, or to learn more about membership, visit usaa.com
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