Everyone talks about how active duty troops don’t get paid a lot — and that’s a good point, considering the hours and the kind of work involved. But with a few smart decisions, our active duty service men and women can be prepared for their post-military future by the time their first enlistment is over.
And it’s actually really easy — if you have the willpower to leave your money alone. No matter what reason you have for building up a large sum of liquid cash, it only takes a few easy steps and the discipline to follow through to make it happen.
In honor of National Preparedness Month, we did a few calculations using your standard E-1 through E-4 paycheck, our handy memories of high school math, and your common, everyday savings account. Look for a bank with NCUA- or FDIC-insured savings accounts that come with some perks. There are high-yield savings accounts with as much as 2.2 percent interest rates out there.
Once you find the account that will hold your future riches, it’s time to figure out how to fund it. Budgeting may be hard for some military members, as every situation is different and E-1 pay still doesn’t light anyone’s imagination, but it can be done. One simple method is the 50-30-20 rule, which means putting 50 percent of your income toward your needs, 30 percent towards wants, and 20 percent towards savings.
For an E-1, that means $319.00 in savings, but even if we take a more modest sum — say, $200 — and put that toward funding our future, we can still make magic happen. If you find a savings account that yields 1.7 percent interest and add $200 every month over four years, you can walk out with more than $10,000.
Not too bad!
For more information about how to build wealth with your specific military paycheck, visit this link.
Simple boons like using allotments and increasing those allotments every time you get a pay raise can help turn that cool ten grand into even more money.
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