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Managing Your Money as a New Service Member

You’re learning a lot of new skills in the military, and good money management is an important one. As a new service member, you may earn more, get special duty pay or have new expenses. Remember: It’s your money, so make the most of it by creating a spending plan. Staying on top of your finances is important for your security clearance, your career and your future.

Create a Spending Plan for Yourself

Pay Raises

Military personnel receive pay raises that are linked to private-sector raises, as measured by the Employment Cost Index. These raises are for both reserve and active-duty service members.

Good financial management starts with knowing your income and expenses. Log in to myPay to see what you have to work with, then create a spending plan to help you stay on track.

You can seek advice from one of the military’s no-cost personal financial counselors or your installation’s personal financial managers or counselors. If you have family members, get their input and set priorities to give them a clear view of your income and the family’s expenses.

Save money every day

Make sure to track your spending and save where you can. Your weekly trips to the coffee shop or buying lunches from fast-food restaurants can add up quickly. Here are a few ways to save money:

  • Eat out less frequently. Invite friends over for a potluck dinner instead of going out for a more expensive meal. According to some estimates, homemade meals cost just half what you’ll pay at a restaurant, minus a tip.
  • Avoid impulse buys. Try waiting a week and see if you can live without the item you want, or if you can find it cheaper somewhere else.
  • Take advantage of military discounts. Find discounts in areas such as insurance, travel, dining out, sporting events and recreation. Don’t pay full price if you don’t have to. Try shopping at outlets or searching for sales. You can also take advantage of online discounts. And, you’ll sometimes get the best prices and shop tax free at your local exchange and commissary.
  • Use your local public library. Check out free books, music, magazines and videos. You may also find these resources on your installation for no cost, at centers for single service members or via the morale, welfare and recreation Digital Library.
  • Check your local or installation newspaper for free activities. Your installation’s MWR clubs may offer specials as well.
  • Use the gym on your installation and MWR facilities at no cost. It’s cheaper than joining a health club, and the workout can be just as good.

Look at the big picture

It’s important to take a long view when creating your spending plan, making decisions about using credit and preparing for financial emergencies. The goal is to save enough money to ensure a bright financial future. Here are some tips for saving money over the long haul:

  • Make sure you’re getting free checking. If you are paying bank fees for not keeping a minimum balance in your account, for example, find a bank with a better offer. If you’re on an installation, consult the installation’s bank or credit union.
  • Use your bank card only at no-fee ATM machines. Or, open an account with a bank that pays other banks’ fees for using their ATMs. Many stores also give you the option of withdrawing cash from your account when you make debit-card purchases from them.
  • Consider getting rid of any credit cards with annual fees. There are many credit cards that do not charge an annual fee. You can also get better interest rates on credit cards and help yourself in similar ways by following guidance to improve your credit score.
  • Try to pay off your credit card balances on time each month. That way, you won’t end up with interest charges or paying late fees.
  • Take measures to lower the costs of insurance. You may be able to reduce what you pay for homeowner’s or car insurance by paying for six months or a year at a time instead of month-to-month or by bundling your insurance with the same provider.
  • Lower the cost of subscription-based content. It may be less expensive if you sign up for longer periods, but make sure you can cancel at any time without incurring penalties.
  • Shop for the best deals. When searching for cellphone service, an internet provider and car insurance, etc., there is often a better deal to be had either through your current provider or elsewhere. Consider calling your provider periodically to check for money-saving promotions. You can also check with family or friends or online for cheaper service, but be sure you aren’t sacrificing quality.
  • Turn off lights and lower heat and air-conditioning settings when you’re not home. Also, check your windows and doors for drafts and put some insulation around areas where you feel cold or warm air seeping in. You may also consider searching for tech products that can help maintain your home more efficiently.

Pay off your debt

If you’re carrying debt, you can use the money you save with the tips above to help pay it down:

  • First, acknowledge that you have debt issues. Then, commit to fixing them.
  • Set a goal. Consider where you want to be with your debt in three months, six months or a year. And make sure your plan is realistic, which may increase your chances of staying with it.
  • Use cash or a debit card when possible. That way, you can’t spend more money than you have available. But beware of overdrafting and the penalties that come with it, even if you have overdraft protection. Also, consider taking the credit cards, store cards and gas cards out of your wallet and putting them in a secure location in your home. Then, use them only in an emergency.
  • Pay down your debts month by month and pay them off one by one. Determine a set amount to pay toward your debt each month (in addition to monthly payments), then focus on paying down the account with the smallest balance first to give you a “win.” Another strategy, if it works better for you, is to pay off the cards with the highest interest rates first. You may also consider consolidating your debt with the best possible interest rate.

Save for your retirement

  • Elect to save for retirement with the Thrift Savings Plan. Stash some money away in this defined contribution plan and consider increasing your savings with each pay increase. How much you receive when you retire depends on how much you put into your account during your working years, so it’s a good idea to funnel as much as you can into this plan.

Installation Program Directory

Find programs and services at your local installation.