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Financial fitness: Navigating milestones in military life

Guarding your fiscal future.
Jessica Evans Avatar
Photo by Michael Kaplan

Budgeting for career milestones is crucial for servicemembers for several reasons. Did you know that to qualify for certain security clearances, your debt-to-income ratio must be less than 40%? Maintaining a healthy financial profile opens up opportunities for career advancement. By budgeting effectively and managing debt responsibly, you can position yourself for career success while guarding your financial well-being.

Initial entry training and relocation

When you report for Basic Combat Training (BCT), you’re walking away from your civilian life and putting your income-earning potential on hold for several weeks. During BCT, you might only receive a small allowance to cover personal costs for toiletries and other miscellaneous items. The amount varies, so it’s a good idea to put some money in the bank before you sign off for your training. You’ll begin earning a salary once you’ve completed BCT and moved on to Advanced Individual Training (AIT), but you’ll still need to budget for the transition between BCT and AIT as a stopgap for any costs the military doesn’t cover.

First PCS (and every move after that)

It’s no secret that moving every two or three years costs a lot of money. On average, servicemembers spend thousands of dollars every time they make a PCS move to their next installation. This massive bill can sneak up if you’re not prepared for it. As soon as you get to your new installation, begin saving once again for your next PCS because you know it’s coming eventually. Remember, some PCS Entitlements will help soften the blow of moving, but the bulk of the move is your responsibility.

Marriage and family expansion

You’ve found your person and are now ready to tie the knot. Wedding costs can add up quickly, so preparing well in advance is essential. If you’re considering starting or expanding your family, it’s important to budget for other expenses associated with parenthood. The most important line item on your budget should be life insurance to protect your growing family. From housing to childcare costs and everything in between, planning for these life changes ensures you can provide for your family’s needs while maintaining financial stability.

Professional military education (PME)

Career advancement often requires attending PME. Your branch may cover tuition, but items like books, supplies, and equipment might not be covered. PME will help advance your career, but relocating might mean your spouse loses their income. Carefully review potential financial impacts before committing to PME. AAFMAA’s CAP Loan is an affordable, low-interest loan that can help you meet your professional goals and fund educational pursuits — or any other expenses you come across as your military career grows. 

Deployment

Deployments can be financially lucrative for servicemembers since they are paid more when they enter risky situations, which means they present a unique milestone in your financial planning. Budget wisely by saving, investing, and paying down debt. Strengthen your emergency fund and use deployment income to plan for future goals such as homeownership, education, or retirement.

Separation/Retirement

Transitioning to civilian life or retirement demands meticulous financial planning. Prepare for potential employment gaps, income changes, relocation, and adapting to civilian healthcare and retirement savings plans. Budget wisely for a smooth transition into the next phase of your life.

Retirement savings and long-term investments

The military offers an excellent way to prepare for retirement via the Thrift Savings Plan (TSP). From the moment you begin your service, it’s a good idea to secure your retirement with TSP contributions because investing in a TSP ensures tax-deferred growth, low fees, and diversified investment options.

You should also consider adding whole life insurance to your readiness toolkit. Along with your SGLI, you’ll not only cover your family while you’re in uniform, but you’ll prepare for your future, too. 

Each of these milestones presents unique financial challenges and opportunities. Effective budgeting involves anticipating these needs, understanding military benefits and allowances, and planning accordingly to ensure financial stability.

Jessica Evans Avatar

Jessica Evans

Senior Writter

Jessica Evans has more than a decade of content writing experience and a heart for military stories. Her work focuses on unearthing long-forgotten stories and illuminating unsung heroes. She is a member of the Editorial Freelance Association and volunteers her time with Veterans Writing Project, where she mentors military-connected writers.

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