Taking control of your financial future can feel like an overwhelming endeavor, especially for many of our nation's veterans and active duty service members.
The unique demands of military service, including overseas deployments and frequent relocations, often create substantial roadblocks for building financial consistency and good credit. Education and awareness early in their careers can help military families overcome obstacles and establish healthy financial habits for the long haul.
As the former senior enlisted leaders for their branches of service, Kenneth O. Preston and Denise Jelinski-Hall saw countless young service members struggle with credit and finances. They also learned some hard lessons during their own three-decade military careers.
Here, these two retired military leaders share four tips to help you chart a path to financial readiness.
Create a budget
Developing a budget is the foundation for good money management. Instead of playing a guessing game, budgeting forces you to track monthly expenses and tell your money where to go.
For Jelinski-Hall, the 3rd Senior Enlisted Advisor of the National Guard Bureau, following a budget allowed her and her husband, also a service member, to stay out of debt and maintain good financial health.
But that doesn't mean it was easy. Budgeting took discipline to create a plan and stick to it.
"Sometimes it was painful, but it forces you to weigh your needs against your wants," said Jelinski-Hall, who held the highest position ever by an enlisted female in the history of the U.S. Armed Forces.
It can take a few months to get comfortable with this new habit, but Jelinski-Hall said it's essential to achieve your short-term goals and your bigger ones — like starting a family or owning a home.
"I believe the biggest thing service members can do is to develop and stick to a budget," Jelinski-Hall said. "By staying the course and making smart financial decisions we were able to buy our first home in Hawaii during our service."
Preston, the 13th Sergeant Major of the Army, points military members to online budgeting tools like Mint and EveryDollar.
"Understand that financial discipline can be difficult at times but having goals and keeping an eye on those goals is important," Preston said.
Use credit cards responsibly
There's no question that credit cards offer convenience and play a role in determining your ability to borrow money. But they can be a pitfall on your road to financial health, allowing you to spend beyond your means and accrue debt that can feel like a burden.
Jelinski-Hall began her service at the rank of airman without a credit card, let alone knowledge about her credit scores. She recommends service members use credit cards sparingly and responsibly.
Start by thinking about how you want to use the credit card. Jelinski-Hall uses credit cards for emergencies and prefers not to use them for every day purchases.
It's also important to pay your balance off in full every month. Carrying balances over month to month can have an unfortunate snowball effect depending on your interest rate.
"Credit card debt can get out of hand fast—avoid that trap," said Jelinski-Hall, who suggests looking for cards with low interest rates and annual fees.
Have an emergency fund
Life isn't always predictable. An emergency fund gives you an opportunity to absorb and recover from those can't-plan-for expenses.
Preston recommends saving three months' worth of pay and entitlements or putting aside 5 percent of your income each month.
"Planning for the unexpected costs is important for preventing unexpected debt," Preston said. "By having a reserve, you can be self-sustainable and avoid payday lenders or high interest loans. Instead, you get to pay yourself during the tough times."
Prepare early for life post-separation
One day every military member will transition back to civilian life. Advanced planning is essential to making this transition a smooth one, according to Preston.
That's why each branch of the U.S. Armed Forces has resources to support veterans and their families through the process.
"The transition assistance programs provided by each of the respective services encourage service members to begin a minimum of one year in advance," Preston said. "It can be stressful to reintegrate back into the workforce and the more time you take to prepare, the easier it is to ease some of that burden."
Sometimes it can be important to plan for a period of unemployment by building up some savings to cover monthly expenses such as rent, food, daycare and more.
Ultimately, Jelinski-Hall said it's not about remaking your finances overnight or managing everything perfectly. "You're going to make mistakes," she shared. "The key is to slow down, learn from your mistakes and keep heading in the right direction." To hear all the tips and information from these veterans, and to get smarter about the financial realities of life in the Armed Forces, listen to this episode of Experian Insider.
You can also learn more about credit, finance and lending on our Experian podcasts, available in the Apple Podcasts section of the iTunes store.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Experian.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on May 5, 2017, and has been updated.