Military pay. Signing bonuses. Basic allowances. If you’re new to military service, these are just some of the forms of financial support you may receive from the start. While these are great resources, think about how you’ll keep those resources working for you — while you serve our country.
Five ways to keep your money secure and growing:
- Avoid impulse buying. One of the first challenges you’ll want to manage — even before you’re on active duty — is how to best handle that attractive enlistment or signing bonus. Depending on your service branch, you may be eligible for up to $40,000 in cash bonuses. Don’t view this incentive pay as disposable cash — to throw at a new sports car or designer clothing — but as initial seed money for costlier items like a home, a college education or your retirement.
- Open a savings and checking account at a bank or credit union. Of course, you can’t expect your money to grow particularly fast in a bank or credit union account, because these institutions aren’t designed to work that way. However, you can use a bank or credit union as vehicles to store your cash reserves, save for short-term purchases, get a loan and execute financial transactions. What’s more, unlike your locker at the gym, banks and credit unions are considered a safe place to keep your money — provided they’re covered by the Federal Deposit Insurance Corporation or the National Credit Union Administration. Also, banks and credit unions often offer nice incentives for those serving in the military, so you may want to check them out.
- Create a financial plan at a reputable financial services company. View a financial plan as a broad game plan for your life — encompassing a strategy for building income, paying off debt, planning for health care, paying for your kids’ college, retirement planning and supporting loved ones after you die. You may find it beneficial to go to a company that will partner you with a professional financial advisor or planner, who will help you build a portfolio of investments designed to help you reach all your short- and long-term goals.
- Limit your credit card spending. While those shiny credit cards in your wallet may seem irresistible, keep your savings healthy by not being a slave to them. Personal debt can eat away at your savings quickly. You see, interest and debt build if you only pay the requested minimum or miss monthly payments. And remember, your credit score rises and falls with your ability to honor your debt responsibilities, so only take on what you can pay off quickly.
- Invest in the Thrift Savings Plan. Retirement planning is not just a smart idea for your parents or grandparents; young people can get in on this tax-friendly retirement plan sponsored by the federal government. The TSP is similar to the popular 401(k) plans available to those who work for private corporations.
Acting now when it comes to saving and growing your money will offer you peace of mind, especially during a time when you’re facing a series of new challenges. In the future, you’ll be thankful that you took those first steps today!
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