Our country recently celebrated its independence and freedom, which makes me realize how many people, especially LEO’s, are prisoners to debt. Making ends meet on an LEO’s salary is challenging at best, but add in factors like stress, divorce, injury and disability, and you have a recipe for disaster. In this column, Where Blue Meets Green, I’ll be outlining ways for you to take control of your finances and get you on a path to financial independence.
The very first step to managing your money is figuring out where it goes. It’s foolish to even try to start a budget if you don’t know what you’re spending and where. Before starting a budget, for one month, write down everything you spend; that means accounting for every single cent. There are two very good ways to go about this. First, you can keep a small notebook and write down every expenditure. Second, you can keep all your receipts and tally them up at the end of the month. Choose the method that works for you.
Once you’ve figured out where your variable spending is going, it’s time to look at fixed spending. Collect all your bills, even those that don’t come monthly. Some are obvious, like rent, utilities, insurance, loan and credit card payments, alimony and child support, television, and phone. Some are less obvious, but should still be accounted for, such as union or social club dues, car registrations and inspections, and of course, taxes.
It’s also helpful to look over your bills for the last year and get an idea of how much you spend annually on things like uniforms and gear, car repairs, school supplies, clothes, sports and school fees for your children, as well as gifts for holidays and special occasions. Figure out how much these amount to monthly to get an idea how much you should be setting aside for each category.
Only AFTER figuring out where all your money goes can you begin to work up a budget. A quick search online will turn up budgets to suit any need or taste. There are even budgeting websites and phone apps for those who are technologically-inclined. I use a paper budget that I modified from one provided to me by the military. I am happy to email a copy to anyone who would like one (see below for contact information). If you’re a do-it-yourselfer, feel free to create your own, but please take the time to consult some pre-made budgets to make sure you don’t leave out anything.
Filling in a budget can be eye-opening. Income minus expenditures will unfortunately equal a negative amount for many people. It’s important in those cases to immediately staunch the bleeding by reducing variable spending as quickly as possible. I’ll explain ways to reduce both variable and fixed spending in subsequent articles if you need help with this.
Once you have a working budget, STICK TO IT. Budgets only work if you adhere to them. Budgets also don’t have to be a dirty, hateful thing. Many people dread the very idea, forgetting that a budget is there to help, not restrict, and that’s because so many people forget to add room in the budget for fun! If you have a budget that doesn’t include a single cent for eating out, renting a movie, or other entertainment, you’ll blow it nearly immediately because you WILL spend money on those things. This will lead you to resent your budget and quite probably ignore it all together. Go ahead and allow that LEOs, of all people, need a way to let off some steam, relax, and have fun by including an entertainment allowance in your budget.
Sticking to a budget can be a challenge, but it does get easier with time as you adjust to your new spending levels. It’s important that everyone in the household is aware of the budget and held accountable to it. As for tracking your expenses, there are several ways to go about it. You can write it down on paper. You can use an app, or a website (I use the Easy Envelope Budget Assistant application, www.eebacanhelp.com.) You can use prepaid cards or a cash-only system, and when the money is gone, it’s gone! Experiment and find what works for you. As time goes you may need to adjust your budget categories, and that’s okay, as long as you are working within your income level.
This year, declare your own financial freedom. The battle for independence is yours to win. Knowing and controlling your expenditures are the majority of that battle.
Kate is a military wife turned LEO wife, a former preschool teacher, and a Marketing student at McKendree University. Kate’s interests are blogging, reading, writing, personal finance, and social consciousness. She lives in Charlotte, NC with her husband, their two cats, King Solomon and Millie, and their dog, Spartacus. View her personal blog at http://katestrophe.blogspot.com/, or contact her confidentially through the Law Enforcement Today website or at [email protected]