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Military Finances: How to Spend and Save Wisely for a Year

2025-01-01

In military life, as in civilian life, how you manage your money impacts almost all aspects of your life, from where you live to how easy it is for you to deal with emergencies. No matter where you are in your military career or in your life’s journey, having your finances in order is likely to be one of your top priorities. Take the opportunity to start every year on the right foot by choosing to spend and save wisely. 

Set Your Financial Goals to Fit Your Stage in Life and Career 

Getting yourself financially ready for the coming year starts with you looking ahead toward events and activities you know you’ll be part of, and planning any expenses associated with them. Also, consider what your goals are for the year. Where do you want to be at this same time next year? Your goals will be impacted by where you are in your military career, so if changes are ahead, factor those in, too.  

  • If you are just starting your military career, the goals you might strive to achieve in a year could include creating an emergency fund and starting to contribute to the Thrift Savings Plan (TSP). Or, if you are planning to get married or start a family, you will want to start saving for the wedding and additional household and caretaking expenses.  
  • If you are mid-career, and you have a family, you may be thinking about buying or selling a house. Or, you could need to factor in your children’s care or education costs, and you may want to start putting money into an education savings plan. Additionally, your current position may have you thinking about the finances you’ve built throughout your career, and how to protect them. For instance, you may consider buying additional life insurance to ensure your family is well protected from the unexpected. 
  • If you are near retirement, or have already retired, take time to consider any adjustments to your lifestyle now that you no longer will have your military pay. Or perhaps think about how you can fulfill a bucket list item to travel to a dream destination or purchase your dream home — or consider a more practical expense, such as future long-term care

Wherever you are in life, each new year will always bring a financial goal, from paying down credit card debt to building your emergency savings, to buying real estate and investing in a retirement fund. When you have the means, always be sure to include a plan that will lead to a more secure future. 

Assess Your Financial Situation 

Before you can decide how much you can safely spend and how much you can appropriately save within a year’s time, you will need a complete and detailed understanding of your financial situation. Conduct a comprehensive assessment of your finances on your own using online tools or with a financial professional, to identify how much money you have, how much you owe, and what you have available to spend each month.  

To do this, use a worksheet that collects all the necessary information: 

  • Income: Your take home pay and your spouse’s, retirement income, any other income 
  • Savings and investments: Savings accounts, retirement accounts, CDs, etc. 
  • Debt: Student loans, credit card debt 
  • Necessary expenses: Housing, food, transportation, health 
  • Personal and discretionary expenses: Childcare, entertainment, pet care, education 

Once you have a good picture of your financial situation, check your financial health. Ask yourself the following questions: 

  • Am I spending more than I make? 
  • Do I have enough money set aside for emergencies? 
  • Am I on track to achieve my short-term and long-term financial goals? 
  • Am I protecting all that I’m saving and earning? 

Create a Budget  

Creating a budget doesn’t have to be complicated and can help you track income and expenses to reach your financial goals. Whether you use pen and paper, software, or a mobile app, the key is taking action. A common approach is the 50/30/20 Rule: allocate 50% of your income to needs (housing, food, transportation), 30% to wants (entertainment, travel), and 20% to savings (debt repayment, retirement, emergency funds). Aim to keep housing costs under 28% of your income and total debt below 36%. These guidelines support both short-term planning and long-term financial security.

 

We’ll Help You Through It

Start making lasting financial changes to support your military life that will last. Download our free budget tips and resource guide — complete with a fill-in budget worksheet so you can assess where you are and what you need to do to reach your financial goals.

 

Having a budget, however, is only the starting point — you have to act on it, review it, and refine it as necessary to ensure you keep your annual goals on track. Revisit your budget regularly to see if there are items you can cut or whether you need to reallocate your spending from one category to another.  

Military Challenges and Benefits 

Servicemember budgets are different than civilian budgets because, in the military, you have access to a host of important benefits and aid that civilians don’t. You also face unique challenges, such as a needing to relocate often due to PCS moves or deployments. The range of active-duty military benefits include military insurance, housing assistance, tax credits, and Thrift Savings Plan contributions, while Veterans may receive healthcare and other service-oriented benefits. 

Ways to Save Money in the Military 

Part of spending wisely throughout the year is by not paying more than you need to while taking advantage of any discounts or special deals that you can. There are several military-specific money-saving opportunities to enjoy:  

  • Ask retailers about military discounts. Many stores, restaurants, and service providers offer military discounts, typically averaging anywhere from 5% to 25%. They don’t always broadcast the discount, so be sure to ask and be ready to show your military ID when required.  
  • Shop on base. From fuel to groceries, you can save money by shopping in military complexes. Gas is usually cheaper on military bases, so fill up while you are there. Likewise, groceries often cost less at the ecommissary, which also doesn’t charge tax. 
  • Use a VA Home Loan. Unlike traditional mortgage loans, VA Loans are backed by the government, so lenders are willing to take a greater risk. This equates to being able to buy a home for $0 down payment, with rates that are often lower than traditional mortgage loans. 
  • Take advantage of the GI Bill. One of the military’s best benefits is the GI Bill, which provides education benefits that can be used for your or your kids’ college, technical school, vocational training, flight training, certification tests, business training, distance learning, and other opportunities. 
  • Save for retirement. The Thrift Savings Plan (TSP) is one of the best retirement savings programs available, and it’s exclusively offered to military members and other federal employees. The New Blended Retirement System (BRS) automatically contributes an amount equivalent to 1% of your pay to the TSP, but it will match up to an additional 4% of your pay if you contribute as well. 
  • Many credit cards offer cash back, mileage or other rewards and waive the annual fee for active-duty military card members and their spouses 
  • MyCAA Scholarship offers Military Spouses education at no cost, so you can train for medical office, healthcare and business career certifications.  
  • SCRA reduced interest rates up to 6 percent are available on any loans received before joining into military service, so you can ease payback of pre-existing loans. 
  • Emergency relief funds are available within each branch, featuring small, interest-free loans for emergencies. 
  • Tax breaks for active-duty military include tax-free housing allowances and more. 
  • Military travel deals and other discounts can help you save on vacation costs and other expenses.  

Once you have set your goals for the year, assessed your financial situation, created a budget, and found ways to save, you will be in a better position to manage your hard-earned money for the long term. 

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