Join millions of investors on Stash

Investing, simplified

Start today with as little as $5

In the Military? Tips For Saving Money at Every Stage

Young soldiers may face many financial pitfalls, including low starting pay

Throughout their enlistment, soldiers typically experience trouble with debt and family obligations

Toward the end of their military careers, servicemen and women are often faced with forking paths, and re-enlisting can have financial benefits

4 min read

The average U.S. soldier spends between seven and 10 years in uniform. While that might not seem long to civilians, it could be a lifetime to a fresh recruit in his or her late teens or early twenties.

Not only is the prospect of a seven-year stint in the armed forces daunting enough, but wrangling the rest of your life into order–your finances, in particular—can add an extra degree of difficulty.

And by the time you’re ready to hang up your boots and retire, or otherwise move on to civilian life, soldiers have other things to consider. Should you stick it out and earn a pension? Or go back to school and earn a degree?

There are many viable paths after serving in the military, but if you want to leave the service with a sense of financial security, you’ll probably want to consider what you’re facing during each phase of your enlistment.

Here are some of the major money challenges that soldiers experience during those phases, from conscripts to commanders, and some tips to help you work through the financial bottlenecks at every stage of your service. Keep in mind that these are only tips, however, as every soldier’s experience is going to be different.

Recruits

Challenges

To-do List

Low pay

Create and stick to a budget

Financial predators

Refrain from making big purchases

Didn't receive financial education in school

Keep up with your bills

Financial baggage (previous debts)

Consider signing up for a retirement plan

As a recruit, you should expect money to be tight—you’ll be earning less than $20,000 per year in base pay as a private at the E1 rank, according to the Department of Defense. For that reason, probably the most important thing you can do is to make a budget, stick to it, and establish healthy money habits.

Also, if you’re packing debt, keep up with your bills. Debt doesn’t disappear just because you’ve joined the military, and ignoring it is only going to hurt you in the long run.

“The number of people joining the military with student loan debt is increasing. The number of [military members] with large student loan debt and no degree to show for it is also increasing,” Lacey Langford, a financial advisor, veteran, and founder of North Carolina-based advisory Sage Services, tells Stash.

Young recruits should also be wary of predatory financial products targeting military members. You’re likely to be offered all sorts of high-interest loans and be tempted to make big purchases, like a car or a house. Stick to your budget, make sure you understand the terms of any loans you take out.

Also, you’ll want to check out the military’s available retirement programs, including the pension system and the Thrift Savings Plan (TSP), which is similar to a 401(k) program.

Mid-career soldiers

Challenges

To-do list

Frequent relocation

Ramp up your saving and investing habits with pay increases

Keeping track of bill payments

Plan for deployment by setting up automatic bill payments

Overseas deployments

Anticipate long-term child care needs in the event one parent is overseas

After a few years in the military, the pay scale ramps up. So, the good news is that your paychecks will be a bit bigger and you’ll have more resources to work with. The bad news, though, is that a military career could start to take a toll, with frequent relocations and deployments.

If you’re deployed, unforeseen issues can arise with family members. “When one spouse is away, all the burdens of running a household, (including) child care, fall on the other,” investment advisor and U.S. Army veteran Eric Nager, of Alabama-based Southern Capital Services, tells Stash.

“Deployments can also create a time-warp effect, making it easy to lose track of when bills are due,” Nager says.

“(Deployment) can be tricky when banking systems, time zones, languages, and postal services are different from home,” Nager says. “If families fall behind, they can be assessed late fees or other unnecessary charges.”

Leaving the service

Challenges

To-do list

Loss of a stable paycheck

Get your financial ducks in a row

Finding work

Plan for employment in the private sector

Overextension of financial resources

Prepare your family for your career change

If you worked for the service for 20 years or more, you’ll qualify for a pension. But most soldiers leave long before that.

So, for most soldiers, getting all of your financial ducks in a row in preparation for a career in the private sector is a good first step. However, many soldiers struggle with two aspects of their new life: Losing a steady, reliable paycheck, and finding a job.

That can make it tough on family members, who rely on soldiers’ earnings. And not just immediate family members; Many soldiers help out extended family, too.

“For many service members, they are the highest earning person in their family,” said Langford. “Because of this, many of them are overextending themselves to help family members out.”

Once out of the service, many veterans have trouble finding jobs. There are a number of reasons why including skill mismatches and stereotyping of service members—many employers don’t understand how military service translates to their needs.

Re-enlistment?

What about re-enlisting? Bonuses typically abound for those willing to extend their time in the armed forces, and the armed services often use them to keep trained soldiers in the ranks. But the military’s retirement system (pensions and the TSP) is generally the primary motivator for keeping soldiers enlisted. The Defense Finance and Accounting Service says that accruing 20 years of honorable service—no less—is the only way to qualify.

Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.

Stash Investments LLC ("Stash") is an SEC registered investment adviser. By using this website, you accept our Terms of Use and Privacy Policy. Stash’s investment advisory services are available only to residents of the United States in jurisdictions where Stash is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a complete description of Stash’s investment advisory services. Certain investments are not suitable for all investors and are not available to all Stash Clients. A full list of available investments on Stash can be found here. Stash does not provide financial planning services to individual investors. Before investing, consider your investment objectives and Stash’s fees and applicable custodial fees. Stash Financial, Inc. is a digital financial services company offering financial products for U.S. based consumers. Deposit Product - (“Debit Account Services” provided by Green Dot Bank, Member FDIC). Advisory products and services are offered through Stash Investments LLC, an SEC-registered. Stash Capital LLC, an SEC registered broker-dealer and member FINRA/SIPC, serves as introducing broker for Stash Clients’ advisory accounts. Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/SIPC, provides clearing and execution services and serves as qualified custodian for advisory assets of Stash Clients. Products offered by Stash Investments LLC and Stash Capital LLC are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. For more information, see our disclosures. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

*1 month equals 30 days from the date of account sign-up. Other fees may apply. Clients may incur ancillary fees charged by Stash and/or it’s custodian that are not included in the monthly Wrap-Fee.