Saving helps you build a solid financial foundation and budget for bills, transitions, emergencies, unexpected expenses, and vacations.
Consider the reasons you’re saving (retirement, buying a home, funding a major purchase), and set a savings goal and timeline to match. Plan to invest over a long time.
Use automatic allotments to set aside savings from every paycheck. Start small and gradually increase until you can save at least 10 percent of your income. Keep this money in a checking or savings account that you can get to quickly and easily.
Open a different savings account for future-focused expenses like potential job loss, emergencies, or large purchases. Work toward saving an additional 10 percent or 20 percent to keep in this account.
Keep funds from savings in separate accounts to focus on particular goals and avoid getting tempted to spend them on other things.
Start now. The younger you are when you start saving for retirement, the more time your money has to grow and work for you. Start retirement savings immediately through the Thrift Savings Plan (TSP). Your contributions are matched by the government up to a certain percent. Servicemembers’ contributions are deducted pre-tax, meaning you don’t owe tax today on what you contribute. Taxes are deferred until you withdraw your contributions. Talk to your PFM about your best options.
Take the FINRED Financial Well-Being Assessment to help you assess your financial health. Deployments can give you extra income and a chance to boost savings. Check out the DoD Savings Deposit Program, which pays a 10 percent guaranteed interest rate on balances up to $10,000. In a Combat Zone Tax Exclusion Area, some or all of your normal pay may be tax-free while you’re on duty. If you re-enlist in a combat area, you may be entitled to a tax-free bonus.
