Why You Need Emergency Savings as a Military Family

In military life, we know “whatever can go wrong will go wrong,” probably when the service member is away! To remain flexible and resilient as a military family, it’s essential to build up a savings account for emergency situations.

All military families, regardless of rank or income, need emergency savings. Unfortunately, less than half of military families are prepared for a financial emergency, according to the Military Family Advisory Network. While emergencies can happen to anyone, they seem to occur often in our military community.

There are four key areas where having that financial cushion can make all the difference. PCS moves, deployments, natural disasters, and paycheck instability make an emergency savings account essential for every military family!

If you haven’t built up an emergency savings yet or aren’t sure how to get started, don’t worry! We will walk you through the steps so you’ll be prepared for whatever the military throws your way.

Saving for PCS Move Surprises

Permanent Change of Station (PCS) moves are a common part of military life and they can also be incredibly unpredictable and costly.

It’s a common myth that the military “pays for your move.” However, even if you choose the military-funded moving companies, there are still out-of-pocket expenses along the way, such as move-out charges, cleaning fees, utility bill disconnection or start-up fees, hotel stays outside of your TLA dates, pet fees, and all the fast food you order while you’re waiting to get your kitchen set up.

There are often unexpected or surprise expenses too. Imagine you’re getting ready for your big move, and suddenly you find out your household goods are delayed, or your new house isn’t ready when you arrive. Or you learn that your new apartment rental has a security deposit equal to two months of your BAH (Basic Housing Allowance). Yikes! These surprises can throw your budget into disarray.

Having an emergency savings fund dedicated to PCS moves can be a lifesaver. It allows you to cover unexpected expenses such as temporary lodging, storage fees, or buying essentials that didn’t make it to your new location on time. It’s like having a financial safety net when you need it most.

Saving for Deployment Setbacks

Deployments sometimes come with certain financial benefits like hazard pay and separation allowances, but they can also present financial challenges. The service member may be delayed in their return home, or might face additional expenses while they’re away.

During deployments, some service members pay extra for cell phone usage, wi-fi, or other services. The spouse at home may need to cut back their work hours or pay extra for childcare while they are managing the house alone. That cost is rarely small, as the waitlists and prices young military families face make clear. And of course, there’s the financial frustration of a broken appliance or car trouble, which always seems to happen during deployment! Deployments can also quietly add debt, and the ways debt builds up while a service member is away are worth knowing before it happens.

Emergency savings can provide peace of mind during deployments. You can use these funds to cover unexpected home repairs, car maintenance, or childcare expenses that arise during this challenging time. Having that financial cushion allows you to focus on supporting your family without the added stress of financial woes.

Saving for Natural Disasters

Military bases are often located in areas prone to natural disasters, such as hurricanes, tornadoes, or wildfires. When you move to a new area, it’s important to learn about safety precautions and evacuation procedures.

These unpredictable events can cause significant damage to your home and property. Without emergency savings, you may find yourself struggling to make repairs and replace lost items. If you evacuate, you might have unexpected costs for hotel stays, fuel, and food.

Creating a separate fund for emergencies like natural disasters is a wise move. It ensures you have the ability to replace belongings in the aftermath of a disaster, especially if you’re waiting on an insurance claim. Additionally, having an emergency savings fund allows you to evacuate or take necessary precautions without worrying about the costs.

Saving for Paycheck Uncertainty

It feels like every Fall there is an air of uncertainty about the military budget while service members wait for Congress to approve the budget for the next fiscal year. Usually, if there is a political stand-off, provisions are made for service member paychecks. However, there have been years where families did not receive a paycheck and had to wait a few weeks for back pay to arrive.

It’s possible for service members to miss a paycheck for several additional reasons. If the DoD ever overpaid or made an error, they will automatically subtract that amount from the next paycheck. If a service member uses Tuition Assistance for a class, but doesn’t earn a C or higher, the cost will be deducted from their paycheck. During deployment, it may take months to adjust to the correct pay amounts. And while waiting for a travel reimbursement, the service member may have to pay out of pocket for credit card charges.

Having an emergency savings fund that includes cash can be a game-changer during uncertain times. It ensures you can cover immediate expenses, such as food, transportation, and lodging, without relying on a timely paycheck. This level of preparedness can make a challenging situation more manageable for your family.

How to Start Building Your Emergency Savings

Building an emergency savings account is clearly important for any military family. But if you don’t currently have anything set aside, it may feel overwhelming.  Here are some practical steps to help you build that financial safety net:

1. Set Clear Savings Goals: Determine how much you need for each specific emergency fund, whether it’s for PCS moves, deployment, natural disasters, or missed paychecks. Savings goals sit inside the broader picture of financial security for military households.
2. Create a Budget: Analyze your monthly income and expenses to identify areas where you can cut back and allocate those savings toward your emergency funds.
3. Automate Savings: Set up automatic transfers from your checking account to your emergency savings accounts. This “pay yourself first” approach ensures that you consistently contribute to your funds.
4. Consider Separate Accounts: It may be beneficial to have separate savings accounts for different types of emergencies. This can help you stay organized and ensure you don’t dip into one fund for a different type of emergency.
5. Build an Emergency Fund Over Time: Building emergency savings takes time and discipline. Start small, and gradually increase your contributions as your financial situation allows.

Emergency savings are not just a financial buffer; they’re a lifeline for military families facing the unique challenges of military life.

Military Families Get an Edge on Emergency Savings

We can give you an “edge” on building up your emergency savings with a free membership to The Edge. It includes unlimited access to financial tools and interactive courses that help you take control of your money. You’ll learn how to balance a budget, pay off debt, and build your emergency savings accounts so you’re prepared for anything.

It’s all free to service members and military families, thanks to sponsor-funded scholarships!

Become an Edge member today and start building your emergency savings. You’ll be better prepared to handle whatever challenges come your way as a military family. Your future self will thank you for it!