5 Things New Service Members Should Know About Money

There is a certain segment of the population that marches into the unknown every year.

Okay, maybe that’s a bit dramatic, but these newly minted high school graduates are not headed to college, a gap year, or even into a normal job like their peers, but are instead headed off to the military where they’ll learn to support and defend the Constitution “against all enemies foreign and domestic.”

Before they ever make it that far, they first have to go through the gauntlet of bootcamp, where they’ll get in shape, learn what those stars, chevrons, and hash marks mean, and even learn how they can set up the government’s version of a 401K—the Thrift Savings Plan.

If you know (or are!) a graduating senior heading off to military service, here are some things you should know before shipping out:

1. Make a Plan for Debt Payments While You’re Away

Bootcamp can last anywhere from 7.5 to 12 weeks—and overdue bills are not what you’ll want to deal with when you get done! Get a plan in place for making any debt payments while you’re gone.

2. Make Sure You’re in Good Standing at Your Current Bank

If you don’t have a bank account already, you’ll set one up in Bootcamp, but it’s a good idea to make sure you’re in good standing at your current bank. Remember that some banks charge fees for every day you’re overdrawn and that won’t be a happy surprise when you check your balance after 12 weeks.

3. Practice Using a Budget

Just like you’re training to be physically fit, a budget helps you train to be fiscally fit. If you can practice using a budget now while heading into bootcamp, you’ll be ready when you leave bootcamp (and when it really starts to matter). You’ll be entering a new phase of training, moving on to a permanent duty station, or even deploying overseas. Remember to follow Rule Three and roll with the punches! You’ll be doing a lot of that over the next few years, so it’s a good habit to form now.

4. Protect Yourself from Predatory Lenders

Make yourself a promise right now: If you see a “Buy Here, Pay Here” sign or one that boasts, “Military—0% down!” go the other way. Don’t walk. Run!

There are laws in place to prevent predatory lenders from taking advantage of service members, like the Military Lending Act, that limits interest rates to “just” 36%, but young sailors, soldiers, and marines are still often favorite targets of these lenders.

5. Learn About Your Thrift Savings Plan (TSP)

Research your options now, while you’ve got time to investigate. Remember—there’s no Google in bootcamp! Less than half of service members currently contribute, so make a plan now to contribute. Decide which fund you’ll want to invest in and rest easy knowing that you’re making a wise choice! If you start saving before you ever see your first paycheck, you’ll never miss that money, but your future self will thank you a thousand times over.

Your entire life is about to change. You’re going to go from your parents and teachers telling you what to do, to drill instructors telling you what to do.

Listen, learn, and follow these directions and you’ll be just fine!