One of the incredible benefits of military life is the occasional influx of money, a la bonuses. Whether you’re re-enlisting or about to ride on that tax-free train, it’s time to talk about what to do with that extra scrilla.
Here are 6 things to do with your bonus:
1. Have a strategy
Just as you came up with a method for making your bed the fastest in the barracks and nailed down how many minutes it takes from being horizontal to being in formation, you need a plan for what you’re going to do with the extra money. The best way to accidentally spend it on Ubers and pizza and six packs without even realizing it, is to let it sit in your checking account without a solid plan. Bonuses are an excellent opportunity to establish or update your financial health. Not sure what to do with all that green? Ask a financial advisor to help you. Many of the larger institutions, such as Navy Federal Credit Union, offer financial counseling services.
2. Pay off that debt!
So you booked a trip to Bali right after basic when you had 72 hours of leave and bought all the things there, including round-trip airfare for that girl you met on the beach that had always wanted to see New York. Or, maybe you bought the truck with the options you couldn’t quite afford and you still have 93 months left on your payment plan. We’re not judging. Paying off debt, especially that of the high interest and unsecured varieties is an excellent use of your money. By paying that off now, you’re saving so much in the long run by not having to pay interest.
3. Invest in a Roth IRA
Do future you a giant solid and invest the cash in something that will grow as much as those muscles after a good Crossfit workout. How about a Roth IRA? With a Roth IRA, you pay taxes now and withdraw the funds tax-free when you retire. Wins all around.
4. Invest in a 529 or ESA
It seems like every week we’re reading a different headline on the changes to the GI Bill. Maybe your kids will get it, maybe they won’t. With ever-changing rules and politics always at play, the GI Bill is about as assured in 18 years as your 1-year-old getting that soccer scholarship. It’s always good to have a back-up, so investing in a 529 plan or an Education Savings Account (ESA) for your little Beckham or Hamm isn’t a bad idea. Learn more about the plans, here.
5. Create or establish an emergency fund
Hard to believe the military would ever give you short notice that instead of moving across the state, you’re moving across the world, but alas, here you are trying to figure out how to ship a pet across the Pacific on your own dime. And, you know as well as the next person that as soon as you deploy, your car is going to break, a kid is going to break an arm, your appliances are going to blow, and so is that tiny extra stash of savings you had. Emergencies happen. Whether it’s flying your whole family home for a funeral or paying for the unexpected out of pocket, putting your extra money in a separate account just for these types of occurrences is a great use of your cash. #Life happens, be ready for it.
6. Treat yo’self
You’ve paid off your debt, you have a nice little stash o’ cash and you’re feeling good about your financial future. Well, boo, treat yo’self. Maybe you don’t book the first flight to Sin City, but invest in the photography class you’ve always wanted to take. Or finally take that family vacation (look kids, Big Ben!) you’ve been putting off until you were in a better spot. Whether you’re splurging on Hamilton tickets or a monster truck rally, taking a little of your money for yourself is well-deserved.
No matter how you use the extra cash, Navy Federal Credit Union can help you reach your financial goals and meet all your financial needs. It’s their mission to put you first. Let them.
This post sponsored by Navy Federal Credit Union.