Financial Readiness For Junior Enlisted Troops
Serving in the military can bring financial challenges, especially for junior enlisted personnel. The usual cost of living issues can be complicated by changes in the federal tax code, tariffs that increase the price of necessities, permanent change of station moves, and other variables.
Navigating the complexities of military life, coupled with the responsibilities of financial independence, can sometimes lead to periods of financial difficulty. How can junior enlisted troops help themselves before and during financial hardships?
Recognize and Evaluate Financial Challenges
The first step towards resolving financial hardship is acknowledging its presence. Ignoring financial difficulties will not alleviate them. To gain a clear picture of your finances, start tracking your spending using a budgeting app, spreadsheet, or notebook.
Review your bank statements regularly to identify recurring expenses and areas where you might be overspending. Honestly assess your financial situation to determine if the issue is a one-time occurrence or a pattern you need to change.
Be sure to take advantage of on-post or on-base options such as financial literacy training or financial readiness options available online from official sources.
Read next: Military Aid Societies and Education Benefits
Military Support Services
The military offers various resources specifically designed to assist service members experiencing financial hardship. Each branch maintains its own aid society, and these organizations offer financial assistance programs that may include grants, interest-free loans, and other help.
- Army Emergency Relief
- Navy-Marine Corps Relief Society
- Air Force Aid Society (Space Force support available)
- Coast Guard Mutual Assistance
Government Programs and Protections
Beyond military-specific resources, several government programs offer assistance. The Servicemembers Civil Relief Act (SCRA) provides legal protections for service members, including limitations on interest rates for pre-service debt and safeguards against eviction and foreclosure.
Familiarize yourself with the SCRA to understand your rights. The Consumer Financial Protection Bureau (CFPB) can also help with issues related to credit, buying a home, and consumer rights.
Read next: Military Aid Societies and Education Benefits
Financial Strategy
There are a number of steps to take proactively to help avoid or manage financial difficulty. They include budgeting, saving for emergencies, and exploring your options for part-time jobs or side hustles to improve your financial outlook.
Maintain a Budget
Budgeting is essential for financial stability. Explore different budgeting methods and create realistic financial goals. Review your budget regularly as needed. You can find resources to get started at MilitaryOneSource.
List all your debts, including the creditor, total amount owed, interest rate, and minimum monthly payment. Prioritize paying down high-interest debt first.
Some may need to consolidate their debts into a single loan to pay off the accounts more efficiently. If you struggle to make payments, communicate with your creditors to discuss potential options to manage your current payments.
Create An Emergency Fund
Some recommend building an emergency fund with 3-6 months’ worth of living expenses to provide a financial safety net. To automate the process, set up automatic transfers to your savings account each payday.
Start with a small amount and gradually increase your contributions as your budget allows. This is a process to grow into, not out of, so start saving a small amount and see how it affects your financial bottom line before increasing the amount.
Read next: Military Aid Societies and Education Benefits
Explore Supplemental Income Opportunities
If your current income is insufficient to cover your expenses, consider ways to earn extra money. Identify your skills and interests and think about how to leverage them to generate income.
Explore freelance opportunities on websites like Upwork and Fiverr. A side hustle or part-time job may be helpful to get your finances back on track.
Avoid Predatory Lenders
When facing financial difficulties, it can be tempting for some to turn to quick solutions like payday loans or title loans. Don’t give in to that temptation.
Such loans may have high interest rates and perpetuate a cycle of debt. Try to avoid going into more debt as you work to add stability to your finances. As an alternative, you may be able to borrow money from a military aid society including:
- Army Emergency Relief
- Navy-Marine Corps Relief Society
- Air Force Aid Society (Space Force support available)
- Coast Guard Mutual Assistance
Improving your financial knowledge will empower you to make informed decisions. Many military installations offer financial literacy workshops and classes.
You can also find help at the CFPB, National Foundation for Credit Counseling (NFCC), and MyMoney.gov. Take a financial literacy course to improve your understanding of budgeting, saving, investing, and credit management.
Read next: Military Aid Societies and Education Benefits
About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
