If you and your family have a spending plan that’s 

helped you to keep the bills paid and add money 

to your savings account on a regular basis, that 

plan should serve you well in civilian life. But 

you’ve probably discovered you’re paying signifi-

cantly more for some essential expenses, such as 

housing and healthcare, than you’ve been used  

to paying. 

Since these added costs may put a strain on 

your finances, now may be a good time to review 

some basic principles of managing money. And  

if you’re someone who hasn’t gotten around to 

making a spending plan, or if the plans you’ve 

tried haven’t worked out so well, this is the ideal 

time to make a fresh start.


Monitoring your monthly cash flow is the first  

step in being an effective money manager. You 

need to know:

  How much income is coming in

  How much of that income you’re spending

  How much, if anything, is left at the end  

of each pay period
If you regularly have money left in your  

checking account when your next paycheck 

arrives, you have a positive cash flow. This 

generally means things are moving in the right 

direction. But if you regularly run out of money 

even before paying all of your bills, you have a 

negative cash flow and could be headed for  

serious financial trouble.

Either way, you can improve your cash flow by 

increasing your income—which may not be as 

easy as you’d like it to be—or by reducing your 

spending, or both. But first you have to know 

where your money is going. 


When you pay by check or debit card or use a 

credit card, figuring out your spending is rela-

tively easy. All you need to track your expenses 

are the monthly statements from your credit 

union or bank and your credit card issuer. 

It’s harder, however, to keep track of the cash 

you take out of an ATM. One approach is to keep 

a daily spending record for a week or two, either 

by using an app on your phone or by recording 

expenses in a small notebook. What you discover 

may surprise—or shock—you.

When you have the numbers to work with,  

you can list your expenses by category. Online 

budget worksheets can be very helpful, including 

the one you can find at


Now comes the hard part: deciding where you 

can cut back and by how much. You’ll discover 

that this is a process 

of trial and error. For 

example, you may under-

estimate what you’ll 

spend on food and have to 

modify your plan or your 

grocery-shopping habits 

to make that number 

more realistic—though 

modifying the plan 

probably means 

cutting back on 

something else 

you’d really like 

to do or have.

Managing Money

To make smart financial decisions, you need to plan ahead.


Don’t treat your spending plan as if it’s 

written in stone and become so  

discouraged that you stop trying to make  

it work. It’s smarter to think of the plan as  

a work in progress.

veterans HanDBOOK