As an American veteran, your service and defense of the nation sets you apart from most other Americans. But that's not all — your financial circumstances are also different. Caring for your family today and in the future requires a specialized approach to money management that is geared toward your experience as a veteran. Financial skills can be complex, but fundamentally they consist of three components:

  • Budgeting for today
  • Saving and investing for tomorrow
  • Protecting against unexpected risks

Think of these tasks as three legs of a stool: Neglecting any of them will unbalance the stool and topple your financial stability. Additionally, these components evolve from active-duty service, to transitioning from the military, and finally to retirement.

This is the first of three articles and it addresses the specific habits needed by active-duty military families to develop the right financial habits today so that they will be set up for financial success throughout their lives.


Few military operations take place without a written plan, but many families never write down their financial goals or estimate what they should spend each month. Military pay and allowances should be able to cover all of your necessary expenses, so you should develop a plan and have the discipline to stick to it.

Related: 8 ways to be financially prepared for civilian life »

Budgeting helps you to avoid debt. In the military, you have a steady,government-issued paycheck, which means you will likely qualify for loans and credit cards. Unfortunately, many businesses are eager to “help” you purchase expensive items with their credit so they can charge exceptionally high interest rates. By living within your income, you can avoid expensive consumer debt.

Saving and investing.

Your “rainy day fund” should include three to six times the amount of your monthly expenses so you can pay for a major car repair, replace that old refrigerator, or travel for a family emergency without going into debt. Saving one-twelfth of your paycheck each month will fill your emergency fund in under three years.

After starting your emergency fund, save for long term goals like buying a home, paying for college, or transitioning out of the military. While in the service, you benefit from annual cost-of-living increases and well-deserved raises for longevity and promotions. When your income goes up, put at least half of each raise into long-term savings. By implementing this simple savings strategy throughout your career, you can build substantial long-term savings while still steadily improving your quality of life.


Losing a valuable asset — such as your car, your property, or your life — can be a financial disaster unless you are protected against that risk. That is why insurance is important so that if the unexpected happens, your family will not be financially devastated.

Shop around for insurance to save money each month, because those savings really add up. Even the government-provided $400,000 of Servicemembers Group Life Insurance, or SGLI, which costs $28 per month, is not the least expensive. There are non-profit associations, such as AAFMAA, that provide the same benefits as SGLI for a lesser monthly fee and the insurance continues after you leave the service.