Essential Military Financial Advice to Secure Your Future

Many people have questions about financial security when it comes time to plan out your financial future. Most people receive advice to open a savings and checking account and contribute to a retirement fund, but what other valuable financial tips should they follow? Many who are in the military also have specific financial needs, and military financial advice sometimes differs from conventional wisdom. Read on to learn more about the importance of good military financial advice and military budgeting.

Introduction to Military Financial Advice

Financial planning is important to everyone, especially military personnel. The type of military financial advice and military budgeting commonly given to Servicemembers might be different from good advice for civilians. Effective financial strategies can enhance long-term financial stability, particularly for individuals deployed for extended periods. For example, while it is true that the Veterans Administration has several programs for military families in need of financial assistance with moving or loans, it is always a good idea to have an emergency fund on hand for quick cash if needed in emergencies. For the Servicemember who might be on deployment overseas and is not married, some good military financial advice is to declare a trusted family member or friend as power of attorney can help, as this person can sign documents in your name or manage your bills or property.

Essential Budgeting Tips for Military Personnel

On the whole, most military financial advice and military budgeting tips do not differ much from the same advice given to civilians, although there are some things a Servicemember might want to consider. Consider some of the following tips:

• Make use of online banking tools, which make it easier to manage your finances remotely and access your funds.
• Create and adjust your budget accordingly, especially if your family will be living either on base or off base. Remember that many military funding programs aren’t always immediate.
• Ensure your loved ones have adequate funding and coverage before you deploy, including healthcare, registration in the DEERS system to access military family benefits, and secure housing.
• Create a will and estate plan to simplify the settlement of your affairs.
• Make use of VA programs designed to help military families with financial needs, such as VA-backed home loans, insurance, education assistance, and retirement plans.
• Have a financial plan for when you transition out of the military, and consult a counselor for military financial advice.

Best Military Savings Accounts for Your Future

Many financial institutions offer special benefits for those serving in the military, including a military savings account specifically designed for Servicemembers. Many of these special accounts offer benefits such as high return interest rates, low fees, and military-specific perks. There are many to choose from, so you should consider your own situation and your short-term and long-term financial goals.

• Savings Deposit Program: A US Department of Defense account that earns 10% interest annually, which compounds monthly. Members can withdraw funds at any time without penalty.
• Thrift Savings Plan: Also of the USDoD, which offers 401K retirement plans to Servicemembers, and offers plans based on income and earnings.
• Military Bank Accounts: Offered by various financial institutions such as Chase and Bank of America, which offer early pay access, free bill payments, account protection while deployed, lower or waived fees, military financial advice and no overdraft fees. 

How to Navigate Military Pay Raises and Benefits

Getting a pay raise in any profession is not a bad thing, but there are some considerations Servicemembers must keep in mind. Military pay raises mean more disposable income, increased savings potential, and better ability to manage debts. However, for those who face active duty or deployment, a military pay raise might become a burden if active duty pay is no longer available later on. The Servicemember should also take into account how frequent these raises might be and how temporary deployment pay can act as a temporary boost to personal finances. Most military financial advice suggests that it should not be factored into a regular budget. Consider the following military financial advice:

• When receiving temporary deployment pay, consider using it as an opportunity to bolster your savings and emergency funds.
• Consider using deployment pay for retirement and investing.
• If the pay raise is temporary, do not factor it into your daily regular budget, but instead, revisit your budget to see where you might cut further spending. This is especially true if you face deployment and might not need rental housing, gym memberships, or other things you will not be able to use while deployed.

Planning for Military Retirement and Savings

Military personnel have many of the same future needs as civilians, in that it is wise to plan for retirement, transition from the military to civilian life, and plan for any unforeseen needs. One popular program is the Thrift Savings Plan, which you can read more about at this link. Here are some military financial advice that Servicemembers might consider:

• Consider enrolling in the various savings options offered by the DoD for military personnel, such as the Thrift Savings Plan (TSP), Military investment accounts, the Savings Deposit Program (SDP), US Savings Bonds, and Bank for Military Accounts.
• Be sure to understand your military pension, military retirement plan, and other services offered by the VA for military retirees. Some include the Aid and Attendance benefit, VA-backed home loans, life insurance, disability compensation and housing grants.
• Evaluate your current assets and how you might be able to expand upon them. Consider how to best utilize this income increase to bolster your finances. Consult a financial planner for military financial advice to help guide you through debt relief military programs and military investment opportunities.

Military Credit Cards and Rewards Programs

Just as many civilian banks offer special savings accounts, interest rates and deals for Servicemembers, so do some credit cards offer special deals for military personnel. These military credit cards adhere to the Military Lending Act, which limits fees banks can charge people in the Armed Forces for credit, as well as the Servicemembers Civil Relief Act, which provides financial protections for Servicemembers, including a 6% cap rate on debts. Some of these military credit cards even come with travel perks and other financial benefits.

Cards with Travel Benefits

Navy Federal Credit Union Visa Signature Flagship Travel Rewards Credit Card: This card offers high reward-earning opportunities, a low interest rate, and up to a $100 statement credit for Global Entry or TSA PreCheck applications.

Hilton Honors American Express Aspire Card: This card provides complimentary Diamond Status, which translates to free room upgrades, welcome gifts, free breakfast, executive lounge access, and more.

Marriott Bonvoy Brilliant American Express Card: This card allows you to earn Marriott points and offers protections for both you and your spouse.

Cards with Cash Back and Lower APRs

USAA Rate Advantage Visa Platinum Credit Card: This card offers lower APRs and no annual fee, with the potential for even lower interest rates if you carry a balance.

PenFed Power Cash Rewards Visa Signature Card: This card offers a flat cash back reward of 1.5% on all purchases, with no limits or rotating categories.

Chase Freedom Unlimited Credit Card: While not specifically tailored to the military, Chase waives annual fees on its personal credit cards for US military members and their spouses.

American Express Platinum Card: American Express waives annual fees for active duty military card members and their spouses under the SCRA. 

The Military Star Card: Exclusively for military members, this card offers competitive interest rates, no annual fees, and 2% rewards on every purchase. You can read more about it at this link. 

Be sure to do your research on the credit card you choose and know your credit score before you apply.

Managing Debt as a Military Family

Military families often face unique financial situations as a result of frequent deployments of a family member, fluctuating pay, and frequent moves. Refer to our article “Debt Help for Veterans” for more in-depth information on this topic at this link. Consider some of the following tips on managing debt as a military family.

• Take advantage of debt relief programs and services available to military families, such as the Servicemembers Civil Relief Act (SCRA), which provides credit counseling, student loan forgiveness programs, and VA debt consolidation loans.
• Assess your financial situation by first making a list of all your debts and assets, how much you owe, and their interest rates.
• Create and follow a budget based on your income, paying off your debts, and prioritizing debt repayment through debt relief military programs.
• Avoid payday loans and scams.
• Consider utilizing credit counseling services.
• Set aside a small amount every month for savings. 

Leveraging Military Discounts to Save Money

One of the best ways for military families to make smart financial decisions is by taking advantage of the numerous military discounts offered to them by retailers such as Kohl’s and Lululemon. Military families also get excellent benefits and discounts through the MWR program, which also includes military discount offers on vacations and military cruise deals. These discounts result in more money at hand that can go into a savings account or pay off debts. Some of the more popular bonuses, as much as 10%-20% off, for military families are:

• Home Depot
• Lowe’s
• Under Armour
• Adidas
• GameStop
• Dell
• JOANN
• Nike 

Frequently Asked Questions