Financial Tips For Enlisted Service Members

financial tips for enlisted service members

More than the GI Bill: College Bound, Service Member Financial Tips

With a little planning you can stretch the GI Bill into a graduate degree.  Here are a few tips that should help you create a five-year plan to get you through one enlistment and in to college.  There are tips spanning those looking to join, thinking about their schooling or planning to leave the military.

Delayed Entry Program Advancement and Enlistment Bonuses

Earn a promotion before you even ship to boot camp. Recruits who spend time in the Delayed Entry Program/Future Soldiers Program can earn the rank of E-3 by completing a few tasks while hanging around the recruiting station.

The easiest way to get your first promotion to E-2 is to pass a knowledge and skills test encompassing basic military information and physical fitness.

To earn the E-3 paygrade you will have to put in a little more time and effort, but it can be accomplished a number of ways including referring other people to enlist.

Though you would automatically promote from E-1 to E-2 after six months of service, starting out as an E-2 will net you $1,200 more in earnings than an E-1 would earn in those first six months.

Monthly Enlistment Pay for Members with less than Two Years of Service for 2020

(Defense Finance and Accounting Service)

E-1 E-2 E-3 E-4
$1,680 $1,884 $1,981 $2,194

Enlistment Bonuses

Additionally, each branch of the military offer enlistment bonuses that can be upwards of $50,000 for members who sign-up for certain jobs.

The jobs and payouts vary according to need, so be sure to discuss with your recruiter. Be aware that some bonuses are not paid out until you complete the requisite training and may come with lengthened service contract agreements.

Location, Location, Location

Save ~$750/mo or $9,000/yr

Feeling adventurous? Consider requesting a duty station overseas, specifically where an automobile is not required.

Places like Japan or Yongsan, Korea near Seoul have robust public transportation systems which will leave you questioning why you ever wanted to own a car in the first place.

According to the US Bureau of Labor Statistics, the average cost of owning and maintaining a car is around $9,000 a year including car payments, gas, maintenance, and insurance.

Many other duty stations offer up to $150 a month for being assigned there. This is called hardship duty pay. These places include areas in Alaska, Turkey, Djibouti, Diego Garcia, and more.

These assignments are not necessarily dangerous, but the quality of life may be somewhat substandard compared to the average lifestyle of Americans.

Bonuses and Extra Pay

Depending or your job and the mission you have been assigned to, the government may authorize extra pay to incentivize certain duties. Take a look at some common incentive pay the government offers. You might decide being a submariner or infantryman is worth the extra money.

Additionally, if you are deployed to a designated Combat Zone like Afghanistan or the Arabian Peninsula Area, your earnings will be untaxed.

Sampling of Various Incentive Pay

(Defense Finance and Accounting Service)

Type Base Monthly Amount/Monthly Amount
Career Sea Pay E-1 with less than two years of service: $50

E-4 with over three years of service: $350

Submarine Duty Pay (in addition to Sea Pay) E-1 with less than two years of service: $80

E-4 with over three years of service: $ 100

Hazardous Duty Incentive Pay (Flight Deck Duty, Parachute Jumping, and more) $150
Imminent Danger/Hostile Fire Pay $225/month
Maritime Visit Board Search and Seizure $150/month
Overseas Tour Extension Incentive Pay $80/month
Foreign Language Proficiency Bonus $100-$500, based on skill level

Life on Base

Junior enlisted spend a lot a time on base. Take advantage of this by eating balanced meals for cheap/free at the galley or mess.  Them stock up your barracks room with foodstuff from the commissary who boast a worldwide average savings of 25% compared to civilian grocers.

Utilize your post’s Morale, Welfare, and Recreation (MWR) programs and tours. MWR offers free or reasonably priced services on everything from automobile shop time to golf and movies.

Tuition Assistance

After you adjust to military life consider tackling some 100 level college courses to help jump start your degree.

Each branch of service offers its own tuition assistance program, but the general idea is that your tuition and fees will be 100% covered so long as you pass your classes.

Leaving the service with even 12 credits of classes completed will go a long way to preserve your GI Bill benefits. That would save you a semester’s worth of courses.

Be warned that taking college courses while deployed may be challenging or infeasible.

See our related articles here and here.

Post Enlistment

So, your enlistment is up. What to do now? First, sign up for your state’s unemployment benefits. This will help ease your financial burden while you wait for your semester to begin.

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Next, consider paying out of pocket for two years at a community college near your home of record. Tuition for two years should total about $7,000, then you can transfer those credits to a university and start using your GI Bill to earn your bachelor’s degree.

This will help stretch your benefits into a graduate degree. If you use your GI Bill wholly for undergraduate studies, you will pay out of pocket or apply for loans for your graduate degree which will be tens of thousands of dollars.

Next, research and apply to scholarships and grants. These are financial gifts you do not have to repay, so there is no harm in applying to as many as you can. There are a great variety of scholarships ranging $50 to “full ride.”

There are even veteran specific scholarships, and your state may offer education benefits as part of their veteran’s programs. Finally, be sure to apply for a Pell Grant, which is an income based federal grant.

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Then, if you are not living at home, find a roommate or two. The GI Bill pays a housing allowance while you are attending school, but splitting costs with one or two people will save thousands per year.

Rental and Housing Stipend Savings

Housing Allowance Based on E-5, with Dependents (GI Bill rate) in Philadelphia (2020 Defense Travel Management Office)

BAH: $2,049

One Bedroom Two Bedroom Three Bedroom
Housing Cost  $1,200 $1,600 $2,000
Rent per Roommate $1,200 $800 $666
Cable and Internet $80 $40 $27
Utilities $150 $75 $50
Total Cost $1,430 $915 $743
Savings on Rent and Utilities

 

N/A $515  $687
Monthly Stipend Savings $619 $1,134 $1,362

You will not get rich from the military or the GI Bill, but you can put yourself in the incredible financial position of being debt-free after college with a potential graduate degree.

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About the author

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Gregory App is a navy veteran and current military spouse. He studied writing at Temple University and has worked in a variety of fields including jobs with the federal government and non-profit organizations.