A Financial Assessment for Young Military Recruits
Young recruits
in the US military will tend to go on a spending spree after basic training and
soon after every pay period. These recruits do not see the need to save for
living expenses since the government will provide them with the basic
necessities, including meals, housing, health care, laundry, etc. Even after
they get out of the military, the government can provide them with a monthly check
through the Montgomery GI Bill, which is part of their educational benefits. Currently,
the GI Bill pays $1,473 per month for full-time students. Hence, many soldiers
do not see the need to save money while in the military.
Local
businesses are aware of the spending spree and prey on young recruits who are
inexperienced in credit matters. For instance, businesses often offer "the
inferior quality of their existing product portfolio" to younger recruits,
including lower-quality vehicles, expensive flat-screen televisions, and luxury
furniture. I do not advise anyone to buy vehicles around military bases. Honestly,
young, single soldiers do not need a vehicle since everything they need, on the
military base, is within walking distance; including convenience stores, barber
shops, gym, medical clinics, etc. When it comes to the flat-screen televisions and
furniture, chances are, these recruits will sell them at bargain prices since they
will be moved to another duty station within a year or two.
The first
thing the recruit should do…is “not to buy a vehicle as many of them do,” but
to open an account with USAA, which is a financial institution for military
personnel and their families. USAA offers insurance services, banking, and
investment opportunities. USAA has the best customer services in the nation
among major financial institutions and insurance companies. USAA provides
no-monthly-fee checking accounts. Moreover, USAA pays for ATM fees and the
customer can re-order checks for free. All military personnel can become
members of USAA. Once they become members, they are members for life.
The
recruit should also open a personal savings account with American Express,
which pays 0.90% APY. http://personalsavings.americanexpress.com/open-account.html. The recruit should start a monthly
allotment of $300 dollars to be sent to the American Express personal savings
account. The allotment can be started at www.MyPay.Gov (which is the
government pay roll website). At the end of a 3-yearsmilitary commitment, as an
example, the recruit would have saved close to $11,000. It is important to understand the
meaning of savings and the need for it. For example, the $11,000 savings can be
used towards a down payment for a house. I wish for them to open a savings account
with American Express, not only because of the competitive interest rate (one
of the highest in the nation), but because money is not readily accessible,
making it less likely for the soldier to spend that money.
The first
thing soldiers should do when they get out of the military is to file for
unemployment (while enrolling for college and looking for a part-time job). It
is almost guaranteed unemployment benefits will be granted. The veteran
should not get student loans to pay for college. There are many programs
for veterans to pay for college, including scholarships, financial aid, and student
work-study programs. The veteran can apply for military
scholarships, such as including Pat Tillman Military Scholarship (http://www.pattillmanfoundation.org/tillman-military-scholars/apply/). If the veteran served in Afghanistan
or Iraq, he or she didn’t pay federal income tax for that year (which is an added
benefit for serving overseas); making the veteran eligible for free student
financial aid once they get out of the military. Also, the veteran should get
on the student work-study program for part-time employment, which is paid by
the GI Bill (1888-442- 4551).
Lastly,
soldiers should be seen by military medical personnel for any type of injury,
regardless of severity, including exposure to loud noises, knee, elbow, and
ankle injuries. Veterans can get a monthly compensation for injuries incurred
on active duty. For instance, a soldier can get $125 monthly compensation for
the constant ringing in his or hers’ ear.
Some of the mistakes common
mistakes made while serving in the military and after your service is complete,
include:
-
Buying a
vehicle after basic training; the car broke down two months later.
-
Getting
student loans (up to $28,000) when there was no need for it.
-
Not
applying for unemployment benefits after the military.
-
Not
applying for military scholarships.
-
Not
having an allotment to save money while in the military.
-
Applying
for too many credit cards while in the military.
-
Not
saving, no even a penny, in college.
I hope you do not
make these same mistakes. If you do, don’t be afraid to talk to a financial expert
to get some necessary help.
