Top 10 things to do when starting your military career

Thank you for your decision to join the military and to serve our nation. Military life is a high calling, and while it's an exciting time, it can also be overwhelming.

When I left for basic training, I remember having a one-track mind with a singular goal: Learn what I needed to learn so I didn't get yelled at.

Now that I've retired from the military, I have the benefit of some wisdom that comes with hindsight. Read these 10 important steps as you begin your military career.

1. Join USAA.
2. Set up direct deposit.
3. Draw up a will.
4. Protect your life, loved ones and possessions.
5. Create a budget.
6. Save for emergencies.
7. Take advantage of the Thrift Savings Plan.
8. Purchase an affordable vehicle.
9. Beware of predatory lenders.
10. Save money through military discounts.

1. Join USAA.

USAA was formed in 1922 when 25 Army officers met in San Antonio to mutually insure each other's vehicles. Obviously, I'm a bit biased, but I believe USAA membership is one of the most valuable benefits of military service.

That's because USAA serves military members during their time of service. And when military service ends, the products USAA offers are theirs to keep and to pass down to family members. In fact, my kids were each about two weeks old when they became USAA members.

2. Set up direct deposit.

One of the first things you'll do as you join the military is set up direct deposit. This will be at the bank where you want your military paycheck to be deposited.

Be sure to choose a bank that fits your new military career. You want the ability to access your money no matter where you are.

3. Draw up a will.

Although you might not have much stuff now, you'll accumulate more over time. That's why a will is important: It lets everyone know what you want done with your possessions and money if you die.

The good news is that in the military, you can get a no-cost will through the Judge Advocate General, or JAG, office. JAG professionals are knowledgeable and helpful — a major benefit of military life.

4. Protect your life, loved ones and possessions.

As you join the military, make insurance a priority. Start by securing the following:

Life insurance

The military lifestyle is inherently dangerous. Servicemembers' Group Life Insurance, or SGLI, is a great benefit, and we strongly recommend taking advantage of it. However, SGLI may not be enough to meet your needs. Plus, you'll eventually need your own policy when you leave the military since you can't take SGLI with you. To help determine how much life insurance you need, read our article, Servicemembers' Group Life Insurance: How to know if it's enough.

Renters insurance

If your items were destroyed in a fire today, do you have enough cash on hand to replace them? Most of us don't. Renters insurance can protect you from things like theft, flooding and even slip-and-fall accidents. Check out this article on Why you need renters insurance, especially in the military.

Auto Insurance

Getting a new, or new to you, car is exciting, but auto insurance… not so much. Nevertheless, you need it because military installations and states require it. To make sure you are adequately covered, learn more about auto insurance.

5. Create a budget.

When you join the military, it might be the first time you are earning a consistent paycheck. It's important to get the most out of what you earn — and that means creating a spending plan that gives each dollar a mission.

The mission of one dollar might be to pay for rent, another dollar might be to buy groceries, and another for entertainment. To make sure you know what each dollar's mission is, it's helpful to create a budget. This can also help you achieve the important financial goal of spending less than you earn.

One expense many people forget to budget is uniforms. If you're an officer, you'll need to budget for uniform purchases. If you're enlisted, you'll have a clothing allowance, but use it wisely so you can use your paycheck to fund other financial goals.

6. Save for emergencies.

In the military, emergencies will happen. Your car will break down unexpectedly. You'll need to fly back for a family member's funeral. Or the water heater in your home will need replacing. That's why it's important to build an emergency fund.

We recommend having three to six months of living expenses saved in an emergency fund. When you're just getting started in military life, three to six months is a large number. So, start with a short-term goal of $1,000. Then continue to save, working toward the bigger goal.

It will take time, but if you're disciplined in your saving habits, you can get there sooner than you think.

7. Take advantage of the Thrift Savings Plan.

One of the best ways to achieve your retirement goals is to save early and save often. The military's version of a 401(k) is the TSP or Thrift Savings Plan.^{See note1}

The graph below shows when you become eligible for the different aspects of the Blended Retirement System. We recommend contributing at least 10% of your pay toward retirement goals.

If 10% seems like a hefty amount and you can't quite get there due to debt or other obligations, it's OK. The important thing is to get into the habit of saving. Remember, you can change your TSP contribution anytime.

It's important to note that the Department of Defense's 1% automatic match is given to you even if you don't contribute anything to your TSP.

8. Purchase an affordable vehicle.

While a fancy sports car or the newest truck might look appealing on the dealership lot, is it really what you need to get to work and back? For most people, probably not. Plus, it might not fit within your budget — and if you can afford it, it might take up too much of your budget. Remember, each dollar has a mission.

Your goal should be to keep the total cost of car ownership, which includes car payment, insurance, fuel and maintenance costs, to around 10 to 15% of your monthly income. This might mean buying a reliable used vehicle instead of a brand-new one.

Learn more about how much car you can afford.

9. Beware of predatory lenders.

It's no accident that payday loan companies camp right outside many military installations. They're ready to lend you the money you need at high interest rates, which are unfavorable to you.

If you need cash fast and don't have an emergency fund, military aid groups like the ones listed below are available to help and are a much better option.

• Air Force Aid Society^{See note1}
• Army Emergency Relief^{See note1}
• Navy and Marine Corps Relief Society^{See note1}
• Coast Guard Mutual Assistance^{See note1}

Once the situation is resolved, prioritize your emergency fund to be better prepared if another financial emergency arises.

10. Save money through military discounts.

Many U.S. companies value your military service and demonstrate this by offering military discounts. These discounts help free up money to put toward your other financial goals, such as saving for an emergency, paying down debt or investing for retirement.

To discover where you can save, check out these military discounts.

You're ready for this.

Know that USAA stands beside you throughout your military career.

From joining, to leaving the military, and everything in between, let us help you maintain financial security. Check out the following pages specifically created to help you navigate your military life.

• Joining
• Military Move or PCS
• Deploying
• Leaving the Military

Congratulations on starting a great life journey!