February 17, 2017, by Casey Meehan – Joining the service is not an easy decision for most people. For some, it is a way to help their families back at home financially. As such, young soldiers can end up stressed because they feel they are not doing enough to help.
There have been numerous reports over the past decade concerning the harsh life some veterans and their families face, even after being in the service for several decades. However, some of these problems – such as massive debt – can be averted in your years of service, thus positing you for a comfortable life after retirement.
Here is a quick primer on some valuable financial tips that every young soldier ought to know.
Life in the military includes deployment to different states or even overseas assignments. Since you never really know where you are going to be deployed before it happens, it is wise to include relocation money in your budget. As the Department of Defense acknowledges, military families relocate 10 times more than civilian families.
Further, you will probably want to visit your parents and family/friends, and some family members might want to visit, as well. In most instances, you end up paying for travel.
Moving around is one of the big expenses in any soldier’s life. Budget accordingly.
2. Unemployed Civilian Spouses
It’s not easy for your spouse to land a job in a new state. According to CNN Money, 35% of military spouses are in professions that need licenses issued by the state.
Whether as a teacher, nurse, real estate broker or a child-care provider, your spouse will need to transfer that license from state to state every time you move. Before your spouse lands a job, supporting the family financially fall squarely on you, so you need to be prepared for that, too.
The Department of Defense says the unemployment rate for civilian spouses was at 26% in 2012, and the figure has risen over the last five years.
Former first lady Michelle Obama aired this issue when she addressed the National Governors Association. She stressed the importance of putting legislations in place that specially cater for the working rights of spouses to service members. Until then, ensure that funds are set aside to provide a buffer if your spouse cannot find work quickly.
The New York Attorney General issued a stern warning to bill collectors some time ago that exposed the crooked ways that some of them use to scam military personnel. As much as the infrastructure involved with tax collection for service members has undergone rigorous reconstruction, you still need to be wary of scammers.
Also, you need to know that there are certain differences between you and a civilian when you are paying your taxes. A good example is an exemption from federal taxes that you receive if you are in a combat zone. Moreover, you can waive the 10% penalty tax for early withdrawal if you are called to active duty, and it dwindles your finances.
According to U.S News, you need to be prepared for tax nuisances such as maintenance cost for your uniform if you are not allowed to wear it off-duty, among other such expenses.
4. Payday Loans
Young enlisted service members do not receive enough money to spend and send back home to their families. As such, payday lenders are becoming familiar faces to members of the U.S military.
Stay as far away from payday lenders as you can.
AOL Finance points out that these loans can come with astronomical interest rates – sometimes with annual rates of 400% or more. If you fall into this trap, the money you earn will go toward paying off debt, not building a future for you and your family.
A mandate from Congress has said these loans can carry an interest rate no more than 36%, but some states have not yet fully implemented the reform, and young enlisted soldiers pay the price.
Payday lenders can get you out of a fix that might require instant cash, but if you can source that money from somewhere else, please do. If you can’t, make sure the lender follows the procedure and terms stipulated in the lending reform for the U.S Military.
5. Buying Goods Abroad
In all honesty, some of the goods sold overseas tend to be below the standard we are accustomed to in the U.S.
Because of this, soldiers will visit online stores such as Amazon and order something and get it delivered to their locations, which gets expensively quickly because of shipping costs and customs charges.
According to goarmy.com, as an enlisted soldier you have a right to some allowances alongside your salary. You can add to what you are due to make in a year with these subsidies and buy a better version of whatever you wanted to be shipped to you upon your return to the U.S.
Most people struggle with financial problems at some point. For soldiers, money should be the least of your worries. For effectiveness at work and a clear head if called into combat, have these tips in mind and you will never have to count your money twice.
About the Author: Casey Meehan is a business owner and writer. He follows investment news and offers trading tips at this blog Stock Hax.