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).
Download: Building Budgets Worksheet
“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:
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:
Planning ahead for the area you’re headed to will help you avoid expenses you won’t be reimbursed for, such as:
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:
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.
Read also: Unlocking Extra Pay: How Military Continuation Pay Can Boost Your Finances
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.
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.
For retirement, establishing a legacy, and more through:
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.
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:
Read also: How to Build Your Savings for the Years Ahead
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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