Military Money Tips: How to Make Your Finances Grow 

Young military members that recently joined the service can find themselves with a lot of extra money that they have never had before. If you are like me, you are seeing your savings account grow and grow above and beyond 3-6 months of your expenses, and you do not know how to make that money work for you. 

This article will discuss financial tips on how to make your military money grow like funding your thrift savings plan account, leveraging a VA loan, military side hustles to make extra money, and more.

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Retirement Accounts: Thrift Savings Plan / Individual Retirement Account

Possibly the best way and first step to make your military money grow is by investing in a retirement account. 

Being a federal employee, you will be able to make contributions to a Thrift Savings Plan account that is similar to a 401K in the civilian world. These retirement accounts will grow until you reach the age of 59.5, and then they are eligible to be withdrawn without penalty.  There are two different Thrift Savings Plan accounts: Roth and Traditional. 

Roth accounts are taxed as you put the money in and grow tax free. This is where I contribute to my Thrift Saving Plan because it is tax advantaged. You will not have to pay income taxes on this money as you make withdrawals from it after you turn 59.5. 

Traditional accounts are not taxed as you put money in, but as you make withdrawals from the account after you turn 59.5, you will have to pay taxes on it like it is your income. The match you get will be automatically put into a traditional account. 

Under the new blended retirement system, you will receive a match up to 5% after two years of service. Military service members should try to make tsp contributions to receive the full match because it has a 100% rate of return as soon as the money is put into the thrift savings plan. 

I recommend reading my article, TSP Millionaire: How to Save for Military Retirement

A combination of your TSP accounts (Roth and traditional) will be a large percentage of your net worth when you reach retirement if you start early.

Individual Retirement Accounts or IRA’s are a great way to save money for retirement. These can supplement any employer sponsored retirement plan. What is cool about IRA’s is that you can choose how to invest for your retirement through mutual funds, ETFs, Index Funds, the stock market, and even more. 

 As long as you have income to file taxes on, you can contribute to an IRA. What I recommend to all of my troops that are interested in becoming wealthy through making smart money decisions is to make contributions to a Roth IRA because it is tax advantaged. 

Just like the Roth Thrift Savings Plan account, the Roth IRA income is taxed as you put it in, and it grows tax free. When you make withdrawals later in life, you will not have to pay income taxes on it. 

Just like TSP, you cannot make withdrawals without penalty until the age of 59.5. 

Debt: Credit Cards /  Loans / Servicemembers Civil Relief Act

Debt from credit cards and high interest rate loans can be a financial burden, and prevent you from becoming wealthy. 

Don’t believe me? If you have $2000 on a credit card with an interest rate of 18%, and you made a minimum payment every month of 35$, you would pay the credit card company $4574.43 over the 10 years and 11 months.

That is $2574.43 extra that you could use to fund a retirement account or another kind of investment.

Are you struggling with Military Star Card debt? Read How to Get AAFES Military Star Card Debt Relief   

I have seen car loans take over my troops’ lives and eat up the majority of their paychecks. If you want your military money to grow, and increase the potential of earning extra money, you should pay for your vehicle with cash. 

Slimy car dealerships right off a military installation are known for giving out car loans to young military personnel that they cannot afford with extremely high interest rates. (Sometimes as much as 20%) It is not worth it! Pay for a car in cash that does not cost more than a quarter of your yearly income.  

Another thing to look out for is payday loan centers right off of military installations. They are willing to give you a loan for an outrageous interest rate because they know that you will be able to pay it back over a long period of time due to your steady income from the department of defense. 

The best way to keep your savings account growing is to stay away from high interest rate debt. You want a maximum cash flow to fund money making accounts and assets.

Pay off all of your high interest debt as soon as you can.  

If you have debt from before you entered into military service, you will be able to reduce the interest rate to a maximum of 6% through The Servicemembers Civil Relief Act. 

Benefits: VA Loans / GI Bill / FAFSA

In addition to The Servicemembers Civil Relief Act, there are other benefits that can help you make extra money in the military. 

VA Loan

The VA Loan is a lifetime benefit for servicemembers and veterans. It can be used to buy a home with a small or no down payment. This VA Home Loan can be used to buy a single family home, townhouse, or multi-family up to 4 units.

I wouldn’t recommend using a VA Home Loan unless your monthly Basic Housing Allowance covered your 30 year mortgage if you’re active duty.  

Of course, using the VA Home Loan would put you into debt, but house hacking could be a good way to increase your cash flow. House hacking is where you buy a property, and rent out extra units or rooms to increase your positive cash flow. 

I did a version of house hacking as a single Airman in the Air Force when I was stationed in Idaho. I had a roommate, and we split our 2 bedroom, 2 bathroom, apartment’s rent and bills right down the middle. We both pocket an extra $500 a month by doing this. 

The advantage of owning the property that you split bills with though, is that real estate is an appreciating asset. You should be able to sell it for more than you paid for it in a normal real estate market environment. 

GI Bill

The GI Bill is a benefit that you can use to jump start your income generation after you leave the military service. It can be used to fund your education, give you a housing allowance, or pay you to work in a qualified apprenticeship. 

The Montgomery GI Bill will pay you a fixed rate as you go to school or a sliding down scale if you go through an apprenticeship program. It requires you to pay in $1200 over the first year of your military service. 

The Post 9/11 GI Bill will pay 100% of your in state tuition and provide you with a housing stipend, or just a sliding down scale of a housing stipend if you go through an apprenticeship program. This version of the GI Bill does not require to be paid into. 

FAFSA

While the Free Application for Federal Student Aid or FAFSA is not a military benefit, it can be used to supplement your income if you are interested in taking college classes while you are in the military. 

Within your first 2 years of military service is where using FAFSA can make you up to $6895 of extra income per year through Pell Grants. This is because when you fill out the FAFSA, it uses your income tax returns to determine how much money you qualify for. 

By using your tuition assistance of $4500, you can take 6 classes a year or 18 college credit hours. That is considered a full time student. Your taxable income will be relatively low as an E-1 through E-3, and even lower if you apply before your first time filing taxes in the military. 

After you get enrolled in each class through your university or college, you will receive a check in the mail. This is designed to help you afford school expenses such as laptops, notebooks, or housing. However, if you do not need any of this, you can spend, save, or invest the extra cash!

Extra Money From Military Travel: TDY / Deployments / Combat Zone / DITY Moves

In the military, we travel a lot. Whether it be TDY (Temporary duty), deployment, or a PCS, we get compensated for it. 

TDY

Depending on your career field, you may TDY a lot. There are multiple types of TDY’s to include exercises, schools, public affairs, etc., but they are all compensated roughly the same. They last anywhere from 1 day to 3 months.  

There isn’t much you can control when it comes to how much you will get compensated from a TDY, but if you want to make as much money from the military as possible, you should volunteer for each one that comes up. Here’s why. 

Per diem pay: You’ll get paid for every day that you were gone to cover meals costs. Depending on the location of the TDY, if you are on or off base, or if meals were provided for you, this amount will vary. You will get the highest rates if you are staying off base. When this happens, save money by buying groceries at a grocery store and avoid eating out for every meal, because you’re still receiving Basic Allowance for Subsistence (BAS).  

Family Separation Allowance – If you have dependents, and you go on a TDY or deployment for more than 30 continuous days, you will be entitled to $250.00 a month. This is a benefit for military families You will file for this at the base finance office when you get back. 

Deployment

When you deploy, you will receive a small amount of per diem, but it isn’t worth writing about. Where you are going to be saving big is your income tax. Combat Zones are approved for tax free base pay. 

Enlistment bonuses are also tax free if the timing works out for you to reenlist in a tax free combat zone.

In addition to tax free income, you may be entitled to extra pay depending on your career field and deployed location. Hostile fire pay, imminent danger pay, hazardous duty pay, and more can make you an extra $225 a month. 

Family Separation Allowance is also allotted for each month you are removed from your immediate family. 

There is also a program called the Savings Deposit Program. You can fund an account up to $10,000 that will gain 10 percent annually and is paid out every quarter. That means over a 12  month deployment, a fully funded account will gain $1000! This is an easy way to get some guaranteed returns over the time you’re deployed. 

Permanent Change Of Station (PCS)

When it comes time to PCS, it is going to be a very stressful time, but you can get paid to do a Do it Yourself or DITY move. This usually only works when you PCS from a base inside of the continental United States (CONUS) to another CONUS base. DITY moves can make you between $5000-$7000 if you execute it properly and stay on a budget.  

Military Discounts

Many companies offer military discounts. Take advantage of them. They usually range from 5-15%. I always ask if a business offers a military discount if I am unfamiliar with them, and I will always make sure that I get the discount if I know it is offered. 

I find myself using it at Lowes or Home Depot most often. 

Military Side Hustles

Consider getting a military side hustle. There are many ways to make money today. 

• Invest in a brokerage account (after you have maxed out a Roth IRA). Use a financial advisor to help you with an investment plan. 
• If you have mechanical ability, instead of buying an expensive car to fix up for yourself, buy cheap cars that need work, fix them and flip them. 
• Mow grass for people who are TDY or deployed.
• If you have a gift of being able to write, create a blog and try to monetize your work. 
• If you like to drive, consider driving for Uber or Lyft. This could also increase your social network. 
• If you are interested in carpentry, pick up the skill and try making extra money from woodworking. 
• Etsy can be a great way to sell art, digital files, wood pieces, or really anything. 
• Instacart: You can grocery shop for people and deliver groceries on your days off. 
• If you love dogs, you could walk dogs or pet sit for people who are TDY. You could also do it through Rover. 

Do a lot of research and consider finding a way to create some income on the side that you enjoy doing. 

Enlisted Experience

Making extra money in the military and making your savings grow is not entirely difficult. If you make good money decisions while in the military, you will be well on your way to being financially independent. The military provides us with a lot of benefits where managing our money can be as easy or as hard as we want to make it on ourselves.

For more tips on saving money, read How to Grow Your Savings Account While in the Military

Set yourself some financial goals, set your mind to them, and meet them!

– The NCO You Never Had