Congratulations—and thank you—on your decision to join the military. You're now part of more than 2 million active and reserve personnel in the United States Armed Forces.
Before, during and after deployment, your initial military duty can seem like a blur, which is why it's important to ensure you're taking the right steps to help secure your financial future. Here are seven tips:
Find a financial resource you trust.
Not all financial institutions are equal—or treat their customers equally well. Some sock customers with fees and charges, including monthly fees just to have a savings account. Establish a relationship with a financial institution you trust to put your needs first, like a credit union, which is run by members, not shareholders.
Open savings and checking accounts.
Be selective when opening your financial accounts to make your money go further. Look for free online and mobile banking so you can stay on top of your finances from wherever you're stationed.
Live within your means, which means not taking on excessive debt. When you make a major purchase, like a car, motorcycle or home, shop around to get the best interest rate. Also investigate government-supported financial assistance for military members and their families, such as VA loans and the GI Bill. Navy Federal can provide input on these resources.
As tempting as it may be to spend an enlistment bonus or other pay right away, you're better off saving. Put that money into an interest-earning account for use later. A new set of wheels, big-screen television or fancy tattoo won't help pay future bills. Save enough to cover three months' worth of living expenses, in case the unexpected happens. You'll be glad you did!
Use credit cards wisely.
Credit cards can help manage and track monthly spending, with some attractive rewards. However, only use credit cards when you can pay off the balance each month or within a short amount of time. Otherwise, interest charges can add up quickly, and that's money you could be saving!
Build credit.When you use credit wisely, you'll build and improve your credit score—a ranking that determines your future credit interest rate. Paying off loans, making payments on time and not using credit excessively will put you on the right path.
Beware the costs of payday loans.
If you're in financial difficulty and can't pay monthly bills, you might be tempted by a payday loan. This is a short-term loan, generally for less than $500, typically due on your next payday. At first, the fee to borrow money may not seem expensive. For example, it might be $15 to borrow $100. That wouldn't be too bad if you paid back the loan on time and didn't borrow again, but that's not what usually happens. More than 80 percent of payday loans are rolled over or renewed by another advance within 14 days.* Instead, look into taking out a small personal loan or applying for a checking line of credit.
Navy Federal: Ideal for New Recruits
Navy Federal makes it easy for new recruits to join and enjoy the multiple benefits of membership, tailor-made for military members and their families. It takes just $5 to open an account, and your spouse and other family members can join, too! We're even open to those in the Delayed Entry Program (DEP). Open an account online, call 1-888-842-6328 or visit a Navy Federal branch today!
*Source: Consumer Financial Protection Bureau
This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.