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5 Financial Goals for Junior Military Officers

Managing Your Finances

The first few years of a military career can be really exciting. You're learning to accomplish your wartime duties, likely moving around a fair bit and probably have more income than you've ever had in your life. Setting financial goals may not seem like a priority. But if you get things going in the right direction now, you'll have a much better chance of gaining financial independence.

1. Draft a Monthly Spending Plan

Even though this may seem like a common goal, many people find it hard to complete this task each month and stick to it. But just like you wouldn't conduct a military operation without a plan you shouldn't run your finances without one either. When creating your spending plan, try to make sure that every penny is accounted for including savings, investments, clothing, food, entertainment, etc. It will not only help you realize what you spend each month, but it also will help direct your focus on areas where you can improve and goals you can set for the extra money you may have when sticking to your plan. There are several on-line tools and apps that can help you track your money and help you with this goal.

2. Take Control of Your Debt

If you went to one of the service academies or through ROTC, you may have avoided student loans. That doesn't mean that you can't end up with significant debt and debt can be one of the primary factors that can hold you back from financial success. Make a reasonable plan to reduce your debt and stick to it. You can start by determining a reasonable amount of debt that you would like to reduce for the year, making sure that the goal is attainable. Next, determine how much you will need to pay each month in order to reduce your debt by the goal amount. Prioritize the debt with the highest interest rate to reduce your debt in minimum time. Finally, you will need to look at your budget and find a way to fit this amount each month, even if it means cutting back on other areas of the budget. It is also important to make sure that you do not add any more debt throughout the year.

3. Make an Emergency Fund a Priority

As a military officer your income is pretty stable and predictable. But it isn't guaranteed. Coast Guard members are working without pay as I write this article. There is also the possibility that you will have a big unexpected expense that won't fit in your budget. You should make sure that you have a fund set up specifically to handle these unforeseen expenses or losses of income, so you don't have to alter your monthly budget to accommodate. One rule of thumb for an emergency fund is to start with a month's income plus $1,000. Once this goal is achieved, you should keep saving until you have about three to six months of expenses covered. Have an amount each month in your budget to add to your emergency fund. If you need to use the funds in your emergency account for an emergency during the year, you will need to regrow it.  

4. Prioritize Retirement Savings

Saving for retirement is something often put on the back burner until it is too late. It is essential to realize that the sooner you begin retirement savings, the more time it will have to grow and the larger your nest egg will be. If you are paying down your debt and covered by the Blended Retirement System (BRS), try to contribute 5% of your pay to the Thrift Savings Plan (TSP) so that you receive the full government match. If you don't, you are literally leaving money on the table. If you are covered by the legacy retirement system, you should still shoot for contributing 5% of your pay into TSP. If you do not have to tackle much debt, consider contributing at least 10% to TSP. 

5. Create a Long-Term Financial Plan

Goals can be more difficult to set if you are having difficulty envisioning the rewards that will come with financial stability. Consider any long-term financial goals you may have such as buying a new house or retirement. Draft out a plan that includes savings, investing, and other ways to build the wealth you need to achieve these goals. You can start with smaller goals, so they seem less daunting. Having a plan in place will help you stay on track and guide your financial decisions. 

Making plans and setting goals works. You do it every day for the military. Do it for yourself too. And just like in the military, bringing in experts to help you with the planning process can improve the outcome.


If you found this article useful, you might enjoy these blog posts.

Special Tax break for Junior Military Officers


How to Start Investing as a Newly Commissioned Military Officer


TSP and BRS


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