As an enlisted Marine, I wish I had some sound advice in my early years in the Marine Corps for my finances. When I joined there was not really any financial training. On top of that, so many people are bad with money It’s to be expected that no one I worked with was in a better situation to teach me. I have learned a lot about finances over the years and It’s something I’m passionate about. Now I want to help service members get a better financial start.
I even remember seeing a financial counselor on base as a Sergeant and she told me I was doing better than anyone she knew saving 10% of my pay.
I remember her telling me I should enjoy the rest of my money because saving 10% was great. So like I spent everything else because she was the base financial counselor and knew more than me. Boy was I wrong for putting so much trust in her and not really educating myself more into finances. My goal is to educate as many people as possible on how to build a better financial future so you have more freedom and flexibility. This post is of course for the enlisted military member.
Start saving cash in ether a typical savings account, money market account or CD’s. You want to have a cash cushion for those what if’s life seems to always throw at us. Maybe Mom gets sick and you need to buy a plane ticket back home. Or maybe your tire goes flat on your car. I don’t think the typical 6 months of living expenses is needed for military. Instead I recommend enough to cover what if’s like I mention above. Personally I think this is around $1,000-$2,000 of cash.
Debt needs to be looked at and put under control! You need to understand that the more debt you acquire the more your living expenses will be and the less you will be able to save and invest for your future. Tackle the highest interest rate of debt first. Start making extra payments toward it so you pay it down faster. Once that debt is paid off role onto the next one and you will see that this becomes a snowball effect. I would even recommend selling things that you don’t need to get out of debt faster if you can. This includes selling your flashy vehicle for a reliable used car if it would save you money.
Now step two and three can be done at the same time and I highly encourage it. As time is a huge factor when we talk about building wealth. Investing can get a little tricky so I will break this part down into a few parts for simplicity.
Thrift Savings Plan (TSP)
Start with putting 5% into the TSP from the get go! If you have no debt put 15%-20% as a start. Then see if you can up it after a few months simply by 1% at a time. Trust me this will add up quick and you will thank me later.
Which fund should you use in the TSP?
I recommend starting out by putting 100% of it into the C or S fund. This is very basic advice but these are both really solid funds that will do you well for many years to come. I would use the TSP until ether you could max out the contributions or you want to get into different funds than what the TSP offers once you have these steps under control. The TSP is an enlisted military FIRE hack!
I would use this retirement vehicle after the TSP. Now to open a Roth IRA I would look into Vanguard or Fidelity as they typically have the lowest expenses out there for this.
Finally once you have gained some rank and years in and you are maxing both of the above vehicles maybe you have more money you want to invest. I would put the extra into a taxable account again you can open this very easily with Vanguard or Fidelity.
This is a crucial part of your finances and your journey. You must self educate yourself and slowly but surely realize what is your priorities, what do you value, what type of future do you want, how does that really look on paper? These are the hard questions and this is the difficult part. By really digging into this part you will undoubtedly learn that life is fairly cheap. You will probably learn material objects have very little longterm impact on you except that it has a negative impact on your freedom.
I truly wished I had these simple steps when I was a junior enlisted military. If I did I arguably would be worth close to a million dollars. Remember others around you will be making dumb moves with their money. You don’t have to follow their lead instead blaze your own path to your financial future.
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