5 Money Management Tips for New Recruits
Joining the armed forces is an exciting and educational career path that offers many experiences and challenges for any new recruit. Yet with this new role comes greater responsibility — especially when it comes to managing your money. Between bootcamp and your first deployment, there’s not a lot of time to get your finances in order. It’s nice to know military lenders can help if you ever get stuck in a financial jam, but sorting your money matters out before you leave will give you a solid financial foundation to build on while you’re serving our country.
The following are some money management tips that will keep new recruits on solid financial ground before, during, and after deployment.
1. Spend less, save more!
Don’t get in the habit of living paycheck to paycheck. To avoid this scenario, it’s important to evaluate your spending habits. The best way to do this is to keep track of everything you spend for an entire month. Then create a budget that allocates money for necessary expenses, savings, and other miscellaneous costs, such as shopping, entertainment, etc. Stick to your budget and your savings account will grow!
2. Build a good credit score.
Credit cards, mortgages, and other loans can be helpful in building your credit score … if you use them properly. To ensure a solid score, pay all your bills on time each and every month and don’t take out more credit than you need. Having different types of credit, such as a credit card and a student loan, instead of just one, also helps to build your score.
3. Be smart with credit cards.
Credit cards, especially those offering introductory low interest rates, can be tempting if you’re in a cash crunch. However, you should only open a credit card and use it if you can pay off the balance in full each month. Carrying a balance isn’t necessarily a bad thing, but you will pay interest charges, which can vary from 1% to more than 30%, depending on your card. This is money you could be saving, instead of handing it over to the credit card company!
4. Build an emergency fund.
Life is full of twists and turns, so it’s important to have an emergency fund just in case the unexpected happens. Your fund should include enough money to cover three months of living expenses. Remember that budget? Multiply it by three and that’s how much you need to stash away.
5. Save for the future.
Set your sights on a long-term savings goal — whether it’s a new house, car, college education, or retirement. You’re always going to have every day expenses, but having a savings goal (and working toward it!) will keep you motivated to live and spend within your budget.
Being a new member of the military can be a chaotic time, but that doesn’t mean your finances have to follow suit! Get your finances in order now, and you’ll be marching towards a successful professional and financial future.
Do you have another money management tips for new recruits? Want to share your story about making sense of your military finances? Please tell us your thoughts!