What I Wish Someone Had Told Me About Military Money


This is a guest post from Airman Mildollar, the brains behind the Military Dollar website, featuring simplified personal finance for military members.

I was pretty lucky when I entered the military. I had friends who commissioned before me who warned me that it could take a while for your pay to start. They told me to save money while I was still in college so that if I didn’t get paid for a month or two, I’d be okay. I’m very grateful to them for passing that information.

Unfortunately, there are a lot more quirks about money in the military that nobody warned me about. Here’s what I wish I had known.

Your paycheck is going to be wrong

Most of us know it’ll be wrong when you first enter the military, but it doesn’t end there. It can also get messed up when you PCS, or when you get a raise, or when you get married or divorced or have a child, or when you deploy, or when it’s Tuesday. Keep an eye on it and make sure it’s right. The situation is not going to get better if you ignore it.

Document everything

This is related to the above. If you think your pay is wrong, start printing out your LES and highlighting what’s wrong. But also mark down every time you talk to the Finance office or your supervisor about it. Keep every email. Establish a record that shows you tried to fix any errors.

This is especially important if the error is in your favor. When the government comes for the money – and they will always come for the money! – you want to be able to prove that you tried to fix it. They can and will try to take 100% of your paycheck to pay back money you owe the government. If you can prove you tried to fix it, they are more willing to work out a payment plan instead. I know this because when I was a lieutenant, they tried to take my entire paycheck for 1.5 months. They only agreed to discuss a year-long repayment after I proved that I’d visited Finance six times (!!) the previous year to try to fix the error.

Completing a DITY move is almost never worth the money

Unless you can fit everything you own in your car, it’s usually not worth the hassle to move yourself. Sure, you might make a few hundred dollars. In exchange, you’ll spend days stressing out, slicing your hand on the tape cutter, and popping Advil for the back pain.

Save yourself the trouble. Do a partial DITY for just the items you need with you or the ones that would cause grief if they were destroyed or lost. Let the government move everything else.

And while I’m on the subject of PCSing, here’s a bonus tip from me: you are going to need a modem when you get to your new location, especially when (not if) your household goods are delayed in transit. Bring it with you – don’t let the movers pack it. I’ve PCSed five times and I have five modems to show for it. At $100-$200 each, this is a really annoying expense that could easily be avoided.

Take advantage of the hidden benefits on base

I wish I’d appreciated on base facilities more when I was new to the military. A lot of the benefits that used to be provided no longer exist on most bases (libraries, movie theaters with free popcorn, auto shops, etc). But there are still a lot of free or cheap things available on base.

Morale offices usually have heavily discounted tickets available. These can be everything from half price tickets to theme parks to free concerts in town. Your base chapel may put on retreats for single enlisted members. And you might not realize how good the prices are at the commissary, but go to a regular grocery store sometime and do a price comparison – it’s a pretty big savings.

Appreciate tax-free allowances

Very few other careers allow you to get paid with tax-free money. When you consider that housing, subsistence, and other allowances often make up 20% or more of your overall compensation, this is a huge financial benefit.

There is a financial counselor available at most military installations

They are available free of charge. Seriously. Make an appointment.

Civilians don’t make more money than military members

Of course, some civilians do. But military pay is fairly average for Americans There isn’t the huge pay disparity that so many people would have you believe.

For one, you have to consider the full military compensation package. If you are only considering your base pay when you are comparing your pay to civilians, you are doing a disservice. Civilians don’t get separate pays for their housing and food, and they frequently have to pay all or part of their medical care. Those things alone add thousands of dollars to the comparison.

And if after adding that stuff in you still don’t think our salaries compare, look at the median household (not individual) income in America. In 2016, it was about $57,000. That’s the equivalent of a single 8-year E-5 stationed at Nellis AFB, or a married with dependents first year O-1 at Fort Bliss. In other words, one military member can achieve the same income as the median American household by their mid-20s.

(I’m not saying we are paid “enough” for what we do, as that is impossible to define. I’m just saying our paychecks are enough to afford a middle-class lifestyle)

10% of a civilian paycheck isn’t the same thing as 10% of base pay

This is related to the above comment about needing to count your special pays and allowances when figuring out your compensation. If you are saving 10% of your base pay because you were told that’s a good number to save for retirement, realize that advice is based on how civilians are paid. That is, it’s based on having one lump sum paycheck, not lots of different types of pays and allowances. 10% of base pay might mean you are only saving 6-7% of your compensation. If you really want to follow retirement savings advice, bump it up!

TDYs are a good deal financially – usually

Either you get paid to travel to a new location and can enjoy a nice mini-vacation basically for free, or you can save up your TDY money and get some extra money in your pocket. I’ve made some creative hotel room meals out of microwave mac and cheese.

Just make sure you are following the rules. If you think the military is going to pay for your upgraded rental car and the convenience of dropping it off with an empty tank, think again. It might be fun while it lasts, but you’ll end up paying for that.

Find the person who is 2-5 years ahead of you and drives an older car. Emulate them

That’s the person who is going to know about SCRA benefits, and all the places in town with military discounts, and how to invest money properly. If the guy with 2 years in is driving a BMW, he almost definitely is not a good financial role model.

Put 50% of every pay raise into debt payoff, savings, and/or investments

A consistent high savings rate is the best way to grow wealth. If you do that, you’ll leave the military with plenty of money to start a new life worry free. If you retire from the military, it might be enough to take that pension and your personal savings and never work again.

Don’t Buy That Car

Seriously. Don’t do it.

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