A recent four-year study revealed that 65% of our military families are under some amount of financial stress.
There may be a few military benefits youre not taking advantage of yet.
Weve put together a guide to help put your mind at ease.
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Yet the Dow rose from 66 to 11,497.
Warren Buffett
War isnt predictable, but money is.
Servicemembers shouldnt be worried about money.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Sadly, this isnt the case.
According to afour-year study, 65% of military families experience financial stress.
Did you catch that?
Themajorityof our military families are experiencing financial stress.
you could be in the minority.
The military sets you up for success you just have to know how to succeed.
They dont even know where to start.
The former happens more than the latter remember the 65% figure from above.
The military provides all kinds of benefits for serving.
Lets look at a few of these benefits:
But your benefits dont end there.
While new service members often dont recognize this, the military pays you strategically.
Most people get paid, get taxed and get the rest, but not you.
Youre taxed on your base pay.
Your other allowances arent taxed, and you dont have to claim them as income.
Thats right, more money in your pocket, especially if youre in a lower tax bracket.
Its not a bad gig.
Its all about knowing the system and using military benefits to your advantage.
Thats what the military can do for your money.
Lets see whatyoucan do for your money.
The financial decisions you make as an E-1 will affect your life as an E-7.
A long-term mindset is crucial.
Lets look at a major problem area: vehicles.
For an E-3 that would probably get you a used hatchback instead of a new Mustang/Camaro/F-150.
Nearly every service member Ive seen in financial straits had unaffordable car payments.
Dont becar poor.If you have to finance a car, that means you cant afford it.
you’re able to still finance it, but know you dont own it until its paid off.
If you decide to finance a car, take advantage of the benefits the military provides servicemembers.
Frugal livingcanbe lots of fun, and saving money isnt hard.
Its simple, but not always easy.
On top of that, six of 10 service members carry month-to-month credit card balances.
If you have no debt, congratulations, youre in the minority.
If youre part of the majority, though, you gotta pay it off immediately.
Debt kills your financial productivity.
Earning 10% on an investment doesnt matter much when youre paying 14% interest on your credit card.
But how do you pay it off?
There are two primary methods to pay off your debt:
3.
Dave Ramsey recommendsstoring a $1,000 emergency fund, even before you kick off tackling your debt.
You never know whats going to happen.
Its often wishful thinking in the military to save some portion of every promotion.
Be the one to actually do it.
Instead of increasing your standard of living with that new money, increase your savings.
You wont miss it, I promise.
Just spend as if you were making one pay grade less than you are, andsave the rest.
For TDYs, eat cheap and store your per diem.
For deployments, spend like youre not getting tax-free pay and save the rest.
Get a Second Income
One popular option for a second income in the military is real estate.
Rich, from Rich on Money,shares his experiencewith real estate investing in the military.
Hes had a lot of success with it.
I have a rental property, and so do many of the military members Ive met over the years.
you might even run a side hustle at home or go out and apply for a second job.
Either way, a second income can help you reach your financial goals.
Plan for Retirement Now
you’ve got the option to retire amilitary millionaire, and its notthathard.
Lets talk about your investing options for retirement.
The goal is to max out your Roth TSP each year.
Once youve got that, max out your Roth IRA.
Passive investing means much lower fees since there isnt a person selecting the stocks.
Index funds are electronically invested based on the companies in that index.
Investing in index funds can be considered investing in the market itself.
Why would you want to do that?
That being said, most people do it wrong.
it’s crucial that you be the 1% of the 1% that does it right.
You have the information to make it work its up to you to take action.
Kalen Bruce, founder ofMoneyMiniBlog.com, simplifies complex financial topics and teaches action-oriented productivity.
you might ask him military finance questions at MoneyMiniBlog and get some free finance bookshere.
It sounds appealing right?
Check it out here!