Newly Commissioned Officers — First-Year Money Plan

This is a simple walkthrough, not a firehose. Start at Step 1 and work down. The goal: get paid correctly, build a safety net, start TSP, use your benefits, and avoid common pitfalls.

Last updated: October 18, 2025

Step-by-step checklist Built for new O-1s Real actions, not theory

Work through these steps over your first 3–12 months. You do not need to finish everything in week one. Each card tells you what to do and how to do it in plain language.

Step 1

First paychecks: make sure money hits right

Direct deposit: Set up your bank routing and account so pay goes in automatically.
Taxes: Complete your federal and state W-4 so withholding is close to correct.
Check your first LES: Confirm Basic Pay, BAH (housing), and BAS (meals). If anything looks wrong, go to finance quickly.
Automatic savings: Set up an allotment or auto-transfer for savings every payday.

Save a PDF or screenshot of each LES. It makes fixing any future pay issues much easier.

Step 2

Build a basic safety net

Starter goal: Save your first $1,000 so small emergencies do not go on a credit card.
Next goal: Work toward 1 month of bare-bones expenses, then build to 3–6 months over time.
Use SCRA if you can: For loans and credit you had before service, SCRA can cap interest at 6%. Contact each lender in writing with your orders.

A small emergency fund is more important than paying off every dollar of low-interest debt on day one.

Step 3

Insurance: protect yourself and your stuff

SGLI: Confirm your Servicemembers’ Group Life Insurance amount (up to $500,000) and update your beneficiaries.
Family coverage: Consider FSGLI if you have a spouse or children who rely on your income.
Renters insurance: If you rent, get a small policy to protect your stuff and cover liability.
Auto insurance: Make sure your coverage fits your car and driving. Ask about military discounts.

Step 4

Start your TSP the easy way

Turn it on: Log into TSP and set a contribution of at least 5% of basic pay so you are ready to capture matching under BRS.
Roth vs Traditional: Early in your career, Roth TSP is usually a solid default because your tax rate is often lower now than later.
Pick a simple fund: Choose an L-Fund close to your expected retirement year and leave it alone.
Spread contributions: Contribute across the full year so you do not miss any future match months.

Bare minimum: flip on 5% to TSP and forget it. You can always tweak funds and amounts later.

Step 5

Set up smart banking and credit habits

Pick one main bank: Choose a bank or credit union you like (USAA, Navy Federal, etc.) and use it as your home base.
One simple credit card: No annual fee, autopay set to “pay statement balance,” and keep use under about 10% of your limit.
Track your bills: Put rent, car, phone, and insurance on a simple bill list or calendar so nothing slips.
Protect your credit: If you want extra security, explore a credit freeze or alerts with the bureaus.

Step 6

Career Starter Loan — if you use it

What it is: A low-rate personal loan for new officers from banks like USAA or Navy Federal.
Good uses: Uniforms, reliable car, deposits, or PCS costs — not vacations or toys.
Payment check: Keep the payment small enough that it fits easily in your budget.
End date: Aim to pay it off well before the car or item is worn out.

Ask yourself: “If my pay dropped for a short time, would this payment still feel safe?” If not, scale it down.

Step 7

Housing: rent now, buy later with VA

Rent first: If your training pipeline or PCS timeline is uncertain, renting is usually safer your first tour.
VA loan basics: VA loans often allow $0 down and no PMI, but there is a funding fee (sometimes waived for disabilities).
When to buy: Stronger case if you expect to stay 2–3+ years, your total housing costs are under ~35% of gross pay, and you have savings for repairs.
House-hack option: With VA you can buy up to a 4-plex you live in. Just be sure the numbers still work even with vacancy and repairs.

Step 8

Know your legal protections

SCRA: Can cap interest on pre-service loans and credit cards at 6% and protect you with some contracts.
Orders and leases: PCS orders can sometimes help you end a lease early without penalties.
Base legal: Use base legal for questions about landlords, contracts, or debt collectors. It is free — use it.

Step 9

Your first-year checkpoints

By Day 30: LES cleaned up, direct deposit working, 5% to TSP, SGLI set, first $1,000 saved.
By Day 90: At least 1 month of expenses saved, one good credit card on autopay, basic insurance set.
By Month 6: Savings headed toward 2–3 months; TSP steady; clear plan for any Career Starter Loan.
By Month 12: 3–6 months of expenses saved, TSP and budget on autopilot, housing plan set for next orders.

Do not chase perfection. If you are moving in the right direction each month, you are winning.

Common mistakes to avoid

Ignoring LES errors and assuming pay will fix itself.
Buying a car that eats your whole paycheck.
Skipping TSP because “retirement is far away.”
Letting subscriptions and food delivery quietly drain your budget.
Waiting until an emergency to learn about SCRA or base legal.

Mini glossary (plain words)

LES — Leave and Earnings Statement, your pay stub.
BAH — Basic Allowance for Housing, money for housing costs.
BAS — Basic Allowance for Subsistence, money for food.
TSP — Thrift Savings Plan, your main retirement account.
BRS — Blended Retirement System, current retirement system that includes TSP.
SGLI — Servicemembers’ Group Life Insurance, life insurance for you.
SCRA — Servicemembers Civil Relief Act, interest-rate and contract protections.
PCS — Permanent Change of Station, official move orders.
VA loan — Home loan benefit backed by the Department of Veterans Affairs.

This page is for education, not personal legal or financial advice. Always confirm details with your finance office, TSP.gov, VA, your lender, and base legal.

Sources & references

BRS and TSP information from official DoD and TSP.gov materials.
SGLI and FSGLI coverage details from VA and DFAS resources.
SCRA protections from official Servicemembers Civil Relief Act guidance.
VA loan basics and funding fee information from VA home loan resources.
Career Starter Loan examples based on common USAA and Navy Federal programs.