If you want to serve your country and make a difference, you may consider a career in the military. There’s the opportunity to live and explore new places, and with a military career, you can retire in 20 years. However, because you move around often, getting a handle on your finances can prove challenging. Additionally, military income is low during the initial years, which can make it difficult to save and plan for the future. But despite the challenges, you can maintain a firm grasp on your income. Here are five practical and simple ways to keep your money on the right track:
1. Rent a house, don’t buy
With the availability of VA home loans and low mortgage rates, you may be tempted to purchase a home for your family. Buying a home is a smart investment. However, because you’re likely to move every 2 to 3 years, buying a home can be more of a headache than a joy. Each time you move, there is the hassle of selling your home and buying a new one. And if the housing market isn’t strong where you live, it can take several months or longer to sell your existing home. And if unable to sell, you’re forced to rent out the house or make double housing payments until the house sells. But as a renter, simply give your landlord notice and move to the next location.
2. Take advantage of military discounts
If you do not earn a lot of money, it can be difficult to enjoy the simple things in life, such as a movie, a night out on the town or a vacation. However, as military personnel you may be eligible for certain discounts. Some discounts are unadvertised, therefore, you have to know about them in advance or simply ask. For example, some restaurants will discount or comp your meal if you can show a valid military ID.
3. Manage your money while overseas
With the Internet and online account management, it’s easy to pay your mortgage, your credit card bills and manage other accounts from any location in the world. Unfortunately, if you’re stationed in a remote area, such as Afghanistan, accessing the Internet can prove challenging. And if you’re unable to access your online accounts, this could result in late payments and fees. To keep your money and credit on track while you’re away, ask someone in the states to assist with managing your account. Choose someone you trust, such as a parent, a sibling, a spouse or a best friend. This person can be your backup. In the event that you are unable to sign onto your accounts, they can schedule payments for you from the states.
4. Don’t forget your savings
Understandably, it’s difficult to save when you don’t have a lot of disposable income. However, always pay yourself first. This can be 5% or 10% of your income. Look into savings deposit programs which offer as much as a 10% return per year. And if you receive a bonus for reenlisting in the military, consider a high-yield Certificate of Deposit.
And while you’re saving for a rainy day, don’t forget about retirement planning. If you decide to make a career out of the military, you’re eligible for retirement in 20 years. Unfortunately, some military personnel do not plan well. And when they’re ready to retire, they don’t have enough income set aside. However, a Thrift Savings program makes it easier to plan for retirement. Similar to an employer-sponsored 401(k) plan, there are few fees to get started, and you can contribute up to $17,000 to $50,000 per year
4. Get education while in the military
Regardless of whether you plan to stay in the military for 20 years, attend college while you’re enlisted. You may qualify for free tuition or tuition assistance. The skills you learn in college can help further your military career, or prepare you for life outside the military.
5. Check your credit report every year
Always check your US credit report at least once a year. Go to AnnualCreditReport.com and order all three reports in less than 10 minutes. Provide simple information to verify your identity, and then view reports from your computer. This is the best way to ensure that all your accounts are accurate, and that you’re not a victim of identity theft. If there are problems with your report, contact the reporting creditor or file an online dispute. It can be hard to manage your personal finances when you’re away, but it’s certainly doable. Follow the aforementioned tips and you’ll pave the way for a better financial future – a good credit score, a rainy day fund and a solid retirement plan.