Life in the military can be tough. Whether it’s being on the job 24/7, difficult work environments, or long and dangerous deployments there is never a shortage of stress.
One area that seems to be a major point of struggle for military families is finances. The factors that lead to financial struggles in the military are numerous. I know, because I lived it.
Change Your Financial Future With These Military Benefits
I spent nearly a decade in the Navy and had my fair share of financial struggles. In the early days of my military career, I made some pretty dumb purchases. I was young and had a steady paycheck so I thought it was all going to be fine.
A few years after joining the Navy, Cassie and I found ourselves with over $30,000 of interest building debt. We knew this wasn’t sustainable so we had to make some changes.
We spent a lot of time learning about things like budgeting, how to pay off debt, and investing in our future. There were a lot of late nights sorting out our finances and planning out our future.
All our hard work was worth it because we paid off over $30,000 in debt in just under 3 years! Not only that, we were able to build a 6-figure retirement account within 5 years of becoming debt free!!
I’m here to tell you that if you learn to control your finances it is possible to live a very comfortable life while serving in the military. Better yet, I’m going to show you how we made it possible.
I’m going to share with you the tips and tricks we used to get out of debt so you change your financial situation too!
Military Benefits Make Paying Off Debt Easy
I get a lot of questions about what our secret to success was. I’m happy to let you know, it’s not a secret.
We were able to crush that mountain of debt and build our retirement accounts with just a few simple changes to our lifestyle. The first change we made was living on a budget.
Build A Better Budget
Building a budget, and sticking to it, was definitely the best thing we could have done for ourselves. If you aren’t living on a budget right now, what are you waiting for?? Start budgeting today!!
Your budget is going to be the key to your success with saving money and paying off debt.
If you’re having trouble building your budget, CLICK HEREand join our FREE Organize Your Finances Challenge.
Take Financial Advice From The Pros
The second thing that really helped us pay off our debt wasDave Ramsey’s Debt Snowball method. The technique is simple yet effective. I can’t even explain how exhilarating it was the day we made that final payment and became debt free!!
The basic idea is that you pay off your smallest debt first. Once that debt is paid off, you use the money that would have gone towards that payment to pay down the next smallest debt. It compounds how much money you pay on your debt each month.
The third thing that helped us change our financial future was using the benefits of being in the military. There are so many benefits that go unused or are unknown to service members that could really help you financially.
To really make the most of your time in the service, it’s important that you ask your leaders about the benefits afforded to you. Try to learn about what benefits are available to you both in the service and once you get out.
Benefits Of Joining The Military
When it comes to military benefits there are quite a few of them. Many of them are well known, but some slide in under the radar and rarely get used.
I believe that if you want to really get the most out of your military career, you have to understand what resources are available to help you. There are many benefits in the military, and they’re not all just for the service member. There are plenty of military benefits for your spouse as well.
Here is a list of active duty military benefits that helped us get debt free!
1| Basic Allowance for Housing
When it comes to housing in the military you really have two options, you either buy a house and live in it for a couple of years before you’re transferred or you rent. We chose to rent the entire time I was in the Navy.
Always make sure the house your rent has a military clause. Therefore, you are able to get out of any lease if you get orders to transfer somewhere new.
One thing that the military does a good job of is ensuring you have a roof over your head. That’s where Basic Allowance for Housing (BAH) comes in. BAH is a tax-free sum of money the military pays its members every month for housing.
The amount you’re paid will depend on where you are stationed, what your rank is, and if you have a family or not. This allowance can be a major benefit if you find housing that costs less than the rate you’re paid. All that extra money can be used for paying off debt or paying bills.
If you want to calculate how much BAH you will get at your next duty station, you can do that here.
2| Basic Allowance for Subsistence
We all know putting food on the table can get tough from time to time. The military wants to ensure you have some money to do that so they offer a Basic Allowance for Subsistence (BAS).
BAS is a small amount of money that is paid to service members to help offset the cost of food each month. It’s a great way to ensure that people have a way to put food on the table.
3| Military Benefits For Your Family At The Commissary
When it comes to shopping for groceries, the Commissary is the place to go. There is an organization within the Department of Defense that runs over 200 grocery stores, or commissaries, on military bases around the world.
If you’re in the military and you’re not shopping at the Commissary, you’re wasting money. The food is generally cheaper and they do not charge a state or local food tax.
If you’re married, your spouse can also access the awesomeness of the Commissary as long as they have a military spouse ID card.
4| It Doesn’t Get Any Better Than Free HealthCare
Yea, you read that right. In the military, you get free healthcare. Over the 10 years, I spent in the military, I can’t ever remember paying one medical bill or prescription for anyone in our family. That includes both of our children being born!
It might not be the highest quality healthcare, but what can you expect for it being free!! I can confidently say that, after having been out of the military for over a year now, free health care is the biggest benefit of the military.
5| You Make A Lot Of Money On Deployment
I’ll be honest, going on deployment was one of the most difficult but coolest experiences I had in the Navy. Deployments are difficult in the sense that you have to be away from your family for months on end. Deployments are cool because you’ll make some life-long friends and you’re going to see your bank account grow!
That’s right, being on deployment is a great way to make and save money. On both of my deployments we were able to save a lot of money, I’m talking tens of thousands of dollars saved. It turns out it’s pretty hard to spend money when you’re floating around on the ocean.
One thing that really helped us on deployment was that I was in a hazardous duty zone so we got paid extra for that. Not to mention, there were no taxes taken out of my paychecks while I was out there due to being in a tax-free zone.
6| Tax Breaks For Service Members
One thing that I didn’t really know about when I got out of the Navy was just how good the tax advantages of being in the military are. On the civilian side, taxes take a huge portion of my income every month.
In the military, you have a lot of tax advantages. Remember how I told you about Basic Allowance for Housing and Basic Allowance for Subsistence? Yea, both of those are tax-free dollars that you get in the military.
Those two allowances made up almost half my income so when the tax man came knocking, I only had to report half my income. Remember how I said I spent 8 months on deployment? For 6 of those 8 months, I was in a tax-free zone so I got to bring home 100% of my paycheck.
Let’s not forget about re-enlisting in a tax-free zone. If you’re lucky enough to get a re-enlistment bonus and you do it in a tax-free zone, you get to bring 100% of that bonus home with you.
The tax breaks you get while being in the military are a huge part of what helped us pay off our debt and save over $100,000 in 5 years.
7| Everyone Wants A Free Education
With the rising cost of higher level education, wouldn’t it be nice to get your 4-year degree and not have student loans? Well, in the military that’s a real possibility.
I obtained a 4-year degree (maybe it took me 5 years) without ever accumulating any debt. That’s right, my whole degree was funded by the military while I was in. That degree helped me land my dream job after I got out of the Navy!
Now, for those service members who don’t get their degree while they’re in, there are options after the service as well. There’s this really cool thing called the GI Bill that helps cover the cost of a college degree. I won’t get into the specifics of it but just know that it’s there to help veterans get higher education without incurring debt.
One other thing that can help with education costs after you get out is The Yellow Ribbon Program. This program partners with schools that are veteran friendly and will offer additional funds to help you cover the cost of your education. Make sure you ask about it when you’re applying for schools!
Let’s not forget about military spouses. They also can receive some financial assistance through the MyCAA. So if you’re a military spouse looking to start your degree, now is the time!
Everything you’ve read up to this point has been ways we used the benefits of the military to pay off debt, stay out of debt, or save more money. Well, once you start saving money you have to make a plan for it.
One of the cool things we found is that there is never a shortage of financial advisors that want to help service members. We were lucky enough to be set up with a free financial advisor from our bank. He helped us plan out our investment accounts so we could get maximum returns.
I guarantee that without his help, we would not have hit the 6-figure mark on our retirement account in our mid 20’s.
Navy Federal Credit Union and USAA are very popular banks with military members. If you have an account with them I would suggest reaching out and seeing if they can set you up with a financial advisor.
During my time in the Navy, and even after I got out, I get asked by a lot of people if I ever regretted the decision to join. My answer to them is that I wouldn’t change a single thing.
Yea, some bad decisions were made, but I learned from them and I became better. Being in the military was tough on both Cassie and I but we cherish the experience and know that it set us up to have an amazing future for our now family of 4.
My advice for anyone that’s in the military, or is thinking of joining, would be to learn about all the benefits. Find out how you can use them to improve your financial future. There is a life after the military and you want to set yourself up for success when you get out!
