6 Financial Tips for Military Members in Their 20s

Young military members learn how to responsibly handle their finances.

Congratulations and thank you for choosing to serve in the military. Your experiences during training and deployment can bring big changes and feel overwhelming at times. But no matter where your journey takes you, it’s important to take steps to secure your financial future. Here are the first financial steps you should take as a young adult in the military.

1. Get the Best Bank Accounts for Young Adults

Choosing the right banking accounts is a crucial step in managing your finances as a young adult or military recruit. Start with a trusted financial institution that prioritizes your needs, like a military bank. Make sure the institution is FDIC-insured for added security.

Next, open both a checking account and a savings account to stay on top of your finances no matter where you're stationed. Look for a checking account with low fees and easy access to ATMs for convenient day-to-day transactions. Additionally, consider building an emergency fund in your savings account to cover unexpected expenses. Try to save up enough to cover your living expenses for three months. It will give you peace of mind when times get tough!

2. Know Your Military Programs and Benefits

As a member of the military, you have access to a wide range of financial programs and benefits. Make sure you take full advantage of them to secure your financial future. Here are some key points to keep in mind:

  • Always Ask for Military Discounts: Many businesses offer discounts to military personnel, so don’t hesitate to ask. These savings can add up quickly.
  • Understand Your Education Benefits: The GI Bill is a powerful tool that can help pay for college and graduate school. But it doesn’t stop there—it can also fund vocational training, trade schools, licensing and certification courses, and even flight school.
  • Explore Loan Repayment Programs: If you have student loans, the Loan Repayment Program can help pay off a big chunk of your debt. Depending on your branch of service, this program can repay up to $65,000 of your student loans.
  • Take Advantage of VA Loans: VA loans offer favorable terms for home purchases, helping military members and their families secure affordable housing. These loans often come with lower interest rates and no down payment requirement.

By learning about these benefits early in your military career, you can make smart financial decisions and secure a brighter future.

3. Use a Secured Credit Card to Build Credit

Building credit is one of the most important steps you can take for your financial future (and for your current situation), especially when you’re in the military. Not only does strong credit open doors to future financial opportunities like buying a car or renting an apartment, but it is also important for getting security clearance in the military.

One way to start building credit is by getting a secured credit card designed specifically for this purpose. You'll need to put down some money upfront to get it (usually between $300 and $3,000). This money acts like a safety net for the lender, so they are more likely to give you the card.

Once you have your secured credit card, use it wisely. Make small purchases and pay off the balance in full every month. This shows lenders that you are responsible with credit, which can boost your credit score over time.

4. Make a Budget

Planning a budget is the foundation of financial stability—a roadmap for your money. While it may seem like a hassle, it's more manageable than you realize. Begin by tracking your expenses for a month to better understand your spending habits. Then, separate your expenses into "essentials" (such as rent, groceries, utilities) and "non-essentials" (like dining out, entertainment).

Decide on exact amounts for each category and stick to them. Try using different budgeting apps and tools, like spending calculators and home budget planners. In the end, making a small effort will help you quickly master your budget.

5. Understand Loan Options

Steer clear of payday loans. Yes, they offer quick cash, but their high interest rates and fees can trap you in a cycle of debt. Instead, consider personal loans for military members if you are in a bind. While it's best to avoid borrowing altogether, personal loans typically offer lower interest rates and more manageable repayment terms, helping you stay financially afloat without drowning in debt.

6. Contribute to Your Thrift Savings Plan

Retirement might seem far off, but starting to save early is one of the smartest decisions you can make. Whether you're aiming for a 20-year military career or still deciding your path, you'll eventually return to civilian life regardless. Luckily, even if you serve just a few years, you have access to one of the best retirement savings plans: the Thrift Savings Plan (TSP).

The TSP functions a lot like a 401(k), where you can contribute part of your paycheck before taxes. This means your deposits grow without being taxed until you take them out. To make the most of this benefit, be sure to add enough so you can take full advantage of any matching contributions available—it's basically free money for your future.

Even small deposits can grow significantly over time thanks to compound interest. Plus, when you leave the service, you can roll over your TSP balance into an IRA to keep your money growing.

Your Next Chapter: Reaching Financial Independence

Remember, reaching financial independence takes time. Like mastering new skills, it doesn’t happen overnight.

These first steps are just the beginning, laying the groundwork for a secure financial future. With Armed Forces Bank, you can focus on your role in the military, knowing we are here to help with a range of financial services and resources.

So, welcome to the next chapter of your life! It's tough, but with us by your side, you'll have the support you need to manage your money with confidence.



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