Understanding Military Financial Goals and Savings Goals

Servicemembers face unique financial opportunities and challenges — from deployments and PCS moves to fluctuating pay situations and special allowances. Finding time to figure out your personal finances while serving your country may seem complicated, but with a good plan, your unique circumstances can be powerful tools for financial success, now and in the years ahead. One of the best ways to take control of your money while you’re in the military is to learn how you can understand, balance, and achieve both your short- and long-term savings goals by taking advantage of the Thrift Savings Plan (TSP).

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The Difference Between Short- and Long-Term Goals

Short-Term Goals

“Short-term goals” can impact your long-term future success, but what do they actually look like? Short-term goals are driven by your financial needs in the immediate future, typically within the next 1-3 years. By understanding what your financial picture may look like during that time, you can set achievable goals for your finances that will help ensure you will be able cover any planned or unexpected expenses during that time — without relying on credit cards or high-interest loans.

As a servicemember, your short-term goals may include:

Building an emergency fund (3-6 months of living expenses)

According to MFAN’s latest Military Family Support Programming Survey, 24.9% of respondents indicated they had less than $500 in emergency savings or no emergency savings at all. To build up your emergency fund:

Start small! Even saving $5-10 here and there can add up quickly!
Sell things in your home that no longer serve you.
Cut back on nonessential spending like coffee runs or eating out.

Saving for a PCS move

Planning ahead for the area you’re headed to will help you avoid expenses you won’t be reimbursed for, such as:

Extra hotel days
Homebuying/selling costs
Cleaning supplies, restocking pantries
Interest fees on credit cards
Costs associated with pets, like overseas shipping
Money for leave or family trips
Credit cards or personal loans repayments
Vehicle repairs or insurance premiums

Long-Term Goals

Military life can change quickly — and orders, training schedules, injuries, and deployments can impact your income or expenses. While savings you set aside for the short term can help create stability and reduce stress during rapid transitions, setting long-term goals — typically for five or more years into the future — can help you build lasting financial independence and prepare you for life after service.

As a servicemember, your long-term goals may include:

Adding to your retirement savings through TSP contributions

The Thrift Savings Plan is a retirement savings and investment plan for federal employees and members of the uniformed services, designed to help build long-term financial security. It offers tax advantages through Traditional (pre-tax) and Roth (after-tax) contributions, low administrative costs, and a variety of investment fund options to match different risk levels and time horizons.
Participants can contribute a portion of their pay and benefit from compound growth over time. Servicemembers under the Blended Retirement System (BRS) can receive 5% government matching contributions, which is essentially free money that you can take with you when you leave the service.
All servicemembers who joined on or after January 1, 2018, are covered by the Blended Retirement System and are automatically enrolled in a TSP account after completing 60 days of service. If you weren’t automatically enrolled, it’s a good idea to start your contributions as soon as possible.
- Once you have set up your contributions, log into TSP.gov to determine your allocations. Adjusting your allocations can make a huge difference in the amount of money you’ll have saved when you leave the service. Do your research, and choose from:
  - C Fund: Common Stock Index
  - S Fund: Small Cap Stock Index
  - I Fund: International Stock Index
  - F Fund: Fixed Income Index
  - G Fund: Government Securities
  - Lifecycle Funds: a mix of the other five funds that adjust as you age

Saving or investing special and incentive payments

Such as hazard pay, flight pay, reenlistment bonuses, cost of living adjustments, and deployment tax exclusions.

Understanding your current tax position can help you better understand if a ROTH TSP or a Traditional TSP is the best option for you.

Saving for a down payment on a home

Using a VA Home Loan means you won’t be required to contribute a down payment, but doing so can help lower your monthly mortgage payments. If homeownership is a goal, having a healthy amount in savings will provide you with more options down the road.

Paying off student loans

Hopefully, you’ve taken advantage of your military benefits to help with your education, but if you have student loans, it’s smart to pay them off – especially if they have a high interest rate. Eliminating student loan debt can help make it easier to make bigger life purchases in the future.

Building investment accounts

For retirement, establishing a legacy, and more through:

Mutual funds
Exchange traded funds (ETFs)
Index funds
Single stocks
Certificates of Deposit (CDs)
Target Date Funds (TDF)
Bonds
Real estate
Cryptocurrency and more

Saving for children’s education expenses

If you can, give your children the financial support they’ll need to get started in life without taking on debt. There are a lot of options for this, including the 529 Plan, which has benefits beyond paying for education; current legislation now allows for 529 plans to be converted into ROTH 401(k)s.

Looking to the Future and Setting Goals

Your life beyond the military, whether after one enlistment or a 20-year career, depends heavily on the groundwork you lay today. Even small, consistent contributions to your savings during service can grow dramatically over time thanks to compound interest, tax advantages, and military-specific benefits.

You can set effective financial goals, whether short or long term, and achieve them by:

Being specific. Instead of thinking, “I need to save more money,” tell yourself, “I’m going to save $1500 for an emergency fund within six months.”
Making your goals realistic. Consider your monthly income, BAH/BAS, and lifestyle. Goals should be challenging but achievable.
Setting timelines for each goal. Timelines help clarify priorities. Give yourself 1-3 years to achieve your short-term goals, and 5+ years to reach your long-term goals.
Breaking savings goals down into monthly or biweekly contributions. Military pay periods make it easy to save automatically. For example, you can save $1,500 in six months by setting aside roughly $65 per paycheck through a direct deposit into a savings account.
Tracking your progress. Use a budget app, spreadsheet, bank alerts, or good old-fashioned pen and paper to track milestones and stay motivated.
Paying yourself first. Each year, give yourself the gift of contributing 1% more into your TSP. Over time, that small but regular increase will add up.

Remember: It’s Never Too Soon to Plan for Your Future

Retirement planning is an important part of building long-term financial stability as a military servicemember. Contributing early to programs like the TSP, understanding the BRS, and taking advantage of government matching can significantly increase your future savings through compound growth. Planning also includes setting clear retirement goals, managing debt, and preparing for the transition to civilian life.

A strong financial plan includes both short- and long-term savings goals that incorporate intentional spending and budgeting. Military life can be unpredictable, but your financial stability doesn’t have to be. By clearly defining your goals and taking advantage of the unique financial resources available to you as a servicemember, you can build confidence, flexibility, and peace of mind.

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