The 50/30/20 Budget Rule for Military Families

Budgeting in the military comes with unique challenges. BAH fluctuations, unexpected TDY expenses, and the temptation of tax-free shopping can throw off even the best-laid plans. The 50/30/20 rule provides a simple framework that adapts to military life.

How It Works

Divide your after-tax income into three buckets:

50% for Needs – Housing, utilities, groceries, insurance, minimum debt payments, and transportation. Your BAH should cover most housing costs, freeing up more room in this category.

30% for Wants – Dining out, entertainment, hobbies, travel, and non-essential purchases. This category keeps you from feeling deprived.

20% for Savings and Debt – Emergency fund, TSP contributions, extra debt payments, and investment accounts. The military’s matching TSP contribution makes this category even more powerful.

Military-Specific Adjustments

Your BAH and BAS are tax-free, meaning your take-home pay stretches further than civilian equivalents. Consider allocating the tax savings directly to your 20% category.

During deployments, many service members shift their budget dramatically, moving money from wants into savings while expenses naturally decrease.

Start Today

Calculate your total monthly income, including base pay, BAH, and BAS. Apply the percentages and adjust based on your family’s priorities. This framework provides flexibility while ensuring financial progress.