Financial Tips for New Military Members: Part 1

So you’ve just graduated from boot camp.  You’ve now earned the right to be called an Airmen, Coast Guardsman, Marine, Sailor or Soldier.  Whether you’re in your MOS school, in combat training, or you’re on your way to your first unit… you have financial choices to make that will either give you freedom or take that freedom away 5 to 10, or even 20 years from now.

For most of you, this is your first real job.  If you’re 18-19 yrs old, then you’ve never had income beyond that part-time gig after school.  And don't worry, every service member goes through this phase, and honestly… very few of us ever make financially sound decisions because this is NEW.   

I’ve had the pleasure of serving with many servicemen & women over my 7 years on active duty.  Before writing this post, I reached out to them to ask what advice they would give if they could go back in time and speak to themselves right after they graduated bootcamp (some did 3 years and got out while some did 20 years and retired).  Not ONE of them said, “You know what Chris? I wouldn’t change anything about my financial choices when I first joined the military.  I knew everything I needed to know.”  That’s because nobody talks to the new troops about the common financial pitfalls young service members face (and lets be honest… sometimes the LAST thing a 18-19 year old service member wants to do is listen to a salty old E-7 say that phrase “…back in my day…").

Lucky for you, I have some short & fast tips that don’t include any “When I was your age…” comments!

TIP: “Plan your wants and needs.  Better balance of spending.”  -Sgt Sirls, Will

This is actually sound advice whether you’re in the military or not.  In your first few years in the service (unless you have children) you don’t NEED a new car, a new speaker system, the latest smartphone, or a brand new wardrobe.  Those are all WANTS.  Also, make it a habit of leaving your credit/debit card at home when you go on leave or liberty.  You know exactly how much you’ll get on the 1st & 15th, so plan to spend a small fraction of that when you’re out in town.  

TIP: Start saving now!  “I started saving about 5 months before I got out and racked up a decent amount in just those last months because I managed my money well.” – Cpl Molina, Julie

Right now an E-1 w/ two years or less will receive $1,546.80 a month.  That’s almost $800 on the 1st & 15th.   Saving doesn’t mean taking $500 of each paycheck and putting it aside.  It should be closer to 10% of your paycheck.  Putting $80 into a savings account will not break your bank, or leave you stuck eating chow hall food for every meal.  

TIP: “Put 10 % away and take the TSP-discussion seriously.” –Sgt Hill, Keland

This tip was in almost every response I received when I asked, “What advice would you give the 18 year old version of you?”  This advice is NO JOKE.  At the beginning of my military career, I started putting in 3% in my TSP.  Then I went down to 1%, up to 10%, back down to 3%...  I ended up leaving the military with about $20k in my TSP.  The reality is that if I chose, and stayed with, 10% then I would’ve had closer to $100k.  THAT’S the power of saving for retirement.  

Stay tuned for Part 2!