Military life comes with substantial responsibilities and opportunities for growth, both personally and financially. When it comes to money, it’s always a good idea to practice good financial management. And while it’s best to start early, it’s never too late to adopt healthy savings habits.

AAFMAA has some easy but effective tips for saving and managing your money while in the military.

Reasons to Focus on Savings

We recommend doing what you reasonably can to save as much money as possible. There are several reasons why you should focus on saving, including:

• Buying a home
• Marriage
• Having children
• Unexpected financial emergencies (e.g., medical bills, auto or home repairs, accidents.)
• Higher education for yourself or your children
• Retirement

Top Tips for Saving Money While in the Military

Don’t Overspend

You’ll never get ahead financially if you spend more than you earn, including overusing credit cards. Make sure you spend less than you make.

Create a Budget

The best way to avoid overspending is by tracking your spending for a few months to see how much you make versus how much you spend. Regular bills (e.g., rent or car payments) are easy to track, but other bills (e.g., groceries, clothing, entertainment, etc.) are areas where it’s easy to overspend.

Once you know how much you spend, make a budget and stick to it so you have money left over for savings. You can create a budget manually in a planner or a spreadsheet, or you can use online apps and resources to stay on top of spending.

Avoid Getting Into Debt

 It’s especially important for servicemembers to avoid debt, because you can be denied security clearance if your debt-to-income ratio is too high. In 2018, the DOD switched to a rolling clearance review, which means credit reports and scores are frequently reviewed in relation to providing security clearances.

Use Credit Cards Wisely

Some credit cards are better than others, and some are even designed specifically for servicemembers. Look for cards that offer zero percent interest rates on purchases, and that provide points or rewards. The key to successful credit card use is to pay them off each month. Financing larger purchases on credit cards can be okay if you have zero percent interest on purchases for a specific period and you can pay off your cards before the interest rate increases to the normal rate. 

Create a Savings Account

Saving money in the military can be easier than in some other jobs because servicemembers often receive special incentive pay and benefits for various reasons. For example, servicemembers receive an enlistment bonus that can be directly deposited into a savings account, making it easier to avoid spending it all on an impulse purchase. In addition, being deployed entitles servicemembers to additional compensation and benefits in recognition of the hardship of deployments.

Ask About Military Discounts

Many retailers, restaurants, and service providers offer military discounts, typically averaging 5% to 25%. However, they don’t always broadcast the discount, so be sure to ask and be ready to show your military ID when required. Even small savings can add up over time. 

Shop on Base 

From fuel to groceries, you can save money by shopping on base. Gas is usually cheaper there, so fill up while you can. Likewise, all purchases on base are tax free, which saves you money.  Shopping  at the commissary and exchange can save you money but it’s still important to compare prices to big box stores and other retailers. Consider garage sales and thrift stores on base and off for clothing, home items and more. You can save money and reuse items rather than buying brand new!

Use a VA Home Loan

When it’s time to purchase a home, one of the most popular benefits for active-duty servicemembers and Veterans is the VA mortgage loan. Unlike traditional mortgage loans, VA Loans are backed by the government, so lenders are willing to take bigger risks on applicants. This means you may be able to buy a home without making a down payment at interest rates that are often lower than conventional mortgage loans.

Take Advantage of the GI Bill

The GI Bill is a fantastic way to save money on education that may help you get a higher-paying job. It provides education benefits for college, technical school, vocational training, flight training, certification tests, business training, distance learning, and other opportunities. Plus, there are also educational incentives for spouses. 

Save for Retirement

The Thrift Savings Plan (TSP) is one of the best retirement savings programs available, and it’s exclusively available to military members and other federal employees. The new Blended Retirement System (BRS) automatically contributes 1% of your pay to the TSP, but it will match up to 4% of your pay if you contribute 5% ..

Fill the Gaps in Your Life Insurance Coverage

If the unthinkable were to happen to you or your spouse, life insurance is there to help your family financially. Servicemembers Group Life Insurance (SGLI) is often not enough coverage, especially for military families with dependents, and you lose it when you leave the military. Make sure your family is fully protected with supplemental life insurance that stays with you even after your service ends.

Military Money Management with AAFMAA

AAFMAA has served the military community for more than145 years. We’re here to help you make the most of your military benefits through comprehensive life insurance policies that fill the gaps left by SGLI. 

Learn more about how AAFMAA’s valuable Member benefits can help your military family achieve financial security and independence!