Home > Personal Finance > 6 Money Issues I Wish I Had Considered When I Joined the Military

Comments 0 Comments

Hindsight is 20/20. Looking back on your life, there will always be areas you wish you had handled differently.

By joining the US Air Force, I had many opportunities to start my financial future off right. Unfortunately, I didn’t take the time to understand or find out about some of those opportunities.

These are the six things I wish I’d known about money and the military from day one.

1. Allotments for Saving

I’d wish I’d known to start making my savings automatic by using allotments.

An allotment is a distribution of a set amount of your pay to the person or account you determine through MyPay. A great advantage of using allotments is that you can set up a certain amount to be automatically sent to your savings account each month. By doing this, you can adjust to not having that money to spend each month while you build your savings.

2. Thrift Savings Plan and Blended Retirement System

I wish I’d known there was a way to start saving for retirement the day I joined.

The Thrift Savings Plan (TSP) is the government version of a 401(k). It allows you to save money for retirement within a tax-advantaged account. If I had started my retirement savings at 18 or even 20 years old, I would have had a great head start. The Department of Defense (DoD) is doing something else to help qualified new recruits save for their future as well. It’s called the Blended Retirement System (BRS), and it does just what it sounds like—it blends the old retirement system with the TSP. There will still be a pension after 20 years of service, but it will be a reduced amount. To adjust for this, the DoD will now match member contributions to their TSP up to 5%.

3. Extra Pay

I wish I’d known to make a plan for what to do when I received extra money.

When you’re serving, you may have to go on a temporary duty (TDY) assignment or a deployment that will increase your pay. Promotions will also increase your income. When you receive increases in income, you should make a plan for what to do with that extra cash. For example, you might take half the money you receive from a promotion to increase your savings and the other half to increase your quality of life. By having a plan for increases in income, you’ll reach your financial goals faster and easier.

4. Frivolous Spending

I wish I’d known that I would have nothing to show for all my frivolous spending.

When you’re 19, you have no idea how unimportant some of your spending can be. All the clothes, club cover charges, and gas money add up quick. When you look back, you’ll wish you put a larger portion of your money in savings instead of spending it on things that won’t last or be relevant 20 years from now. Spending money on experiences can be a rewarding part of life, but you’ll want to think critically about which experiences you decide to spend your money on when it could impact your quality of life later on.

5. Free Credit Reports

I wish I’d known what the heck a credit report was and why it was important to my financial future.

Your credit report is your good name. Having negative information on it will lead to lenders charging you more to borrow money or, even worse, not loaning you money at all. Many servicemembers don’t realize the significance of on-time payments and not taking on too much debt until they’re already in the thick of it. And an issue with your credit report can be an even bigger problem when you are a servicemember. An excessive amount of debt can result in the loss of your security clearance—or never being able to obtain one in the first place. Take the time to gain basic knowledge of your credit report and get a copy every four to six months to make sure everything is accurate. You can check your credit report for free on Credit.com.

6. Leave and Earnings Statements

I wish I’d known to check my LES for errors every month.

We all know mistakes happen. So it shouldn’t come as a surprise that mistakes happen on servicemembers’ leave and earning statements (LES) too. Whatever the mistake, it’s compounded when it isn’t caught in a timely manner. If you don’t pay attention and you’re paid more than you’re due, the Defense Finance and Accounting Services (DFAS) will take that money back in the next pay period. If you’ve spent the money, you’ll still be expected to pay it back even though it was a mistake. If your leave balance is higher than what you’ve actually earned, you may find out you don’t have enough leave when you try to take a vacation. Check your LES every month to ensure all the information is accurate.

These are six things I wish I would have known about since my first day in the military. Hopefully, you can learn from my experience and use them to achieve your financial goals. For even more tips and tricks, visit Credit.com’s Personal Finance Learning Center.

Image: asiseeit 

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team