The underemployment and unemployment struggle for military couples is real! Military life makes it challenging for spouses to find or even want to maintain employment. Let’s be real when your spouse is gone all the time—it’s challenging to have a job and manage your family solo. The roller coaster of having and not having two incomes or having a job where you’re not earning to your full potential makes money management difficult (to say the least).
Military couples should live off one income because frequent moving and deployments make it difficult to depend on a military spouse’s income. Military couples never know when the second income won’t be available. That is why it’s wise not to rely on it.
I know what it’s like to be one-half of a military couple. It’s a unique dynamic that you can’t fully appreciate until you’ve lived it. You’re following your service member’s career from duty station to duty station. The frequent moving makes it difficult to know if you’ll have a second income or how long you’ll have it.
What Does Living Off One Income Mean?
Living off one income means you only use one income to pay all of your bills even when you have a second income. For example, if you’re an E-7 and your spouse has a job making $50k a year, you only live off your E-7 pay.
Living off one income means using the service member’s salary to save 10-15% of your income and pay all of your monthly expenses. I’ve added in savings because if you lose or don’t have a second income, you should still put money aside for emergencies and to be able to pay your expenses in any given month. It may seem like a lot to do with one income, but I’ll get into what you use the second income for in a moment.
Why It’s Important to Live Off One Income
First off, many military families are already living off one income. That’s because a lot of families choose for one parent to stay home. Other times, unemployment or underemployment play a role in why it’s essential to live off a single salary! The roller coaster of having and not having a second income is challenging to your quality of life and mental health.
Even if your spouse makes more money than you, you should live off the service member’s income. You never know when PCS orders will drop and cause a loss of employment for a military spouse. Here are the four main reasons why living off of one income is wise for military life.
Under and Unemployment Protections
The number one reason to live off one income is to protect you against unemployed or underemployment. If your ability to make your car, mortgage, debt, or any other payment depends on a second income, what happens when you get orders? Here are the three options you usually have to pick from.
- Be unemployed, which means you have no second income and can’t make your payments.
- In a perfect world, your spouse will find a job paying the same (or more) starting immediately at the new location.
- If your spouse can’t find a job at the new location, you may choose to live separately to keep the second income temporarily. But this option also has increased expenses because you now have two households to pay for.
To Build Your Savings
Adjusting your life to only spending one of your incomes allows you to build your savings fast. A savings surplus is not only good for financial emergencies. Your savings will be a buffer in the times you don’t have a second income coming in. Building your savings also means saving for retirement with your Thrift Savings Plan (TSP) or using an Individual Retirement Accounts (IRA) for you and your spouse.
More on the TSP: Traditional vs. Roth TSP
Pay Down Debt
By living off one paycheck, you’re freeing up the additional income to pay down any debt. Reducing and eliminating debt will help you gain financial independence, but it’s also an insurance policy for financial problems. When you don’t have debt, it makes it easy to navigate unexpected expenses.
Reduce Stress
The stress from losing a second income you’re dependent on will not only be a financial burden. It will be a stressor in every part of your life to include your marriage. Maintaining your quality of life with a single salary will help you build your savings to give you financial freedom.
Increase Quality of Life
Living off one income gives you the chance to increase your savings to a level you can use to improve your quality of life. The income can be used for travel, gifts, and experiences you want in life.
More on living on one salary from the Military Money Show
How Military Couples Can Live Off One Paycheck
People often want to know if it’s possible to live off one income. The answer is yes, it’s possible to live off one income. It just takes a little planning—for both sets of income.
The Steps to Start Living on One Income
Set Financial Goals
Start with goal setting. What do you want? What are you working towards? Are you trying to pay down debt or save more in your TSP? Setting financial goals helps you direct what you’ll do with the second income. Know what you’re trying to achieve in the long and short-term. Having set goals also keeps you and your spouse on the same page. And when life gets crazy, and things go off the rails, your goals will help you get back on track faster.
Develop a Budget
A budget is key to having a clear picture of the money coming in and going out so you can keep your expenses under the service member’s monthly income. If you don’t have a firm understanding of what’s coming in and going out, it will be difficult to manage and budget both incomes. A budget also keeps you on pace with your goals. Qube is a great resource to help you maintain your budget to keep your expense under your one income. It’s a digital envelope system for money management.
More on budgets: Budgeting & Money Management Basics
Forward Think Employment
If you’re a milspouse, unemployment or underemployment is the reality of your world. But that doesn’t mean you’re powerless. You can take control of your career, but you have to give it thought and lots of planning to maintain having a second paycheck. Think outside the box to control your employment. Consider finding a job with a major company with the ability to transfer. Ask your employer about telecommuting. What about entrepreneurship? Build your own career that’s PCS proof. Look for virtual jobs where you can work while the kids are on the playground. Taking control of your employment helps see you through crazy transitions. Your only limit is your creativity and hustle.
Resources for Employment
- Veterati – a digital mentorship program to help develop your career
- Hiring Our Heroes – a program through the U.S. Chamber of Commerce Foundation to connect military spouses and veterans with employment.
- Instant Teams – Remote work for milspouses.
- Virtforce – virtual professions for active-duty spouses.
What to do With Your Second Income
So, how do you live off one income when you have two? The answer is—create two spending plans. First, one spending plan for the times when you only have one income. When you’ve PCSd and haven’t found a job yet, or when working doesn’t fit into your family plans. The second spending plan is for building up your savings, paying off debt to maintain your quality of life through employment transitions.
You can use programs like Personal Capital or Tiller to help you manage both sets of income. Personal Capital is a fantastic resource for you to not only manage your paychecks and spending plans, but it’s also a hub for you to monitor your savings and investments. Tiller allows you to use spreadsheets to help manage your money. The best part, they link to programs like Personal Capital.
Another fantastic resource for budgeting is Qube Money. Qube takes the envelope system to a whole new level. Their digital systems make budgeting for couples convenient and easy with a debit card. Highly recommend it!
Main Spending Plan
The first spending plan is your primary budget for the service member’s income. In it, include what’s affordable on the military service member’s pay. Good examples would be savings, retirement savings, food, rent, monthly utilities, and car payments. Don’t forget to include all debt payments like credit cards and loans. You don’t want to fall behind on those. If you don’t have enough money from the service member’s income to pay bills (on time), start cutting. The first spending plan should cover your monthly living expenses and debt payments. The ability to pay all your bills with one income allows you to adjust if you lose the spouse’s income smoothly.
Reserve Spending Plan
The second spending plan is the gravy budget. It’s the plan for the spouse’s income—all the extras you want for a better quality of life. Examples would be to save more, extra debt payments, vacations, and a better cell phone plan. Under no circumstances should a car payment, bill, or loan be dependent on the second income. Because if you PCS and lose the job, you won’t be able to pay your bills on-time.
As a side note, living off one income also applies to special pay like jump or dive pay. If you depend on your special pay to make a car payment, that’s a huge mistake.
Here’s why it’s a bad idea. If you’re injured and taken off of jump status, you lose your jump pay, and when that happens, you can’t make your payments. So treat your special pay as an additional income and manage it accordingly.
Here’s the Bottom Line
Living off one income is a smart financial decision for military couples. Keeping your monthly expenses limited to one income—even when you have two— gives you control and consistency with your finances. And using your second income to build your savings will provide you with the financial freedom and quality of life you want.
Want to learn more about personal finance in the military? Check out and subscribe to the latest episodes of the Military Money Show below. You can also follow me on Twitter @FinanceLacey and @MilMoneyShow or on Facebook @TheMilitaryMoneyExpert and @MilMoneyShow.
If you want to “kickstart” your finances in the military, you can get access to my free Financial Kickstart Kit here.
Featured photo by Joshua Armstrong
