Back
🛡️ TKN Financial

Newly Commissioned Officers — First‑Year Money Plan

A simple checklist for your first 90 days and year: make sure you get paid correctly, protect yourself with the right insurance, start retirement savings, set up good bank and credit habits, and use loans wisely. Acronyms are explained inline.

Last updated:

BRS / TSP quick note
Put in 5% now — get DoD match later
SGLI (life insurance)
$500,000 typical max
SCRA protection
6% cap on some pre-service interest
Short glossary: LES = pay stub; BAH = housing money; BAS = meal money; TSP = retirement account; BRS = military retirement system.

Step‑by‑Step Setup

1️⃣ Set up pay & check your pay stub (LES)

  • Direct deposit: Put your bank routing and account into the finance system so your pay goes into your account automatically.
  • W‑4 & state tax: Fill out federal and state tax withholding forms so the right taxes are taken out.
  • Check your first LES (pay stub): Make sure the numbers make sense — Basic Pay, BAH (housing money), BAS (meal money). If something is wrong, contact finance right away.
  • Automatic savings: Set small allotments from your pay for emergency savings and TSP so you pay yourself first.
Tip: Save a screenshot or PDF of each LES so you have a record if something needs to be fixed.

2️⃣ Build a quick emergency fund

  • Starter $1,000: Save $1,000 as soon as you can — this covers small surprises and keeps you out of high‑interest debt.
  • One month then 3–6 months: Aim for 1 month of expenses in 90 days, then 3–6 months by the end of year for bigger safety.
  • SCRA explained: If you had loans or credit before you started active duty, SCRA (Servicemembers Civil Relief Act) may cap interest at 6% — ask your lender and keep copies of your orders.

3️⃣ Important insurance basics (easy words)

  • SGLI — life insurance: Military life insurance. Typical max is $500,000. Set your beneficiary (who gets the money).
  • FSGLI — family life insurance: Optional life insurance for a spouse or family member.
  • Renters insurance: Covers your stuff and liability if you rent — inexpensive and useful.
  • Car insurance: Make sure your coverage fits your car and driving; ask about military discounts.

4️⃣ Start your retirement account (TSP) — simple steps

  • Put in 5% now: TSP is like a 401(k). Put at least 5% of your pay so you will catch the DoD match later. (DoD gives 1% automatically after ~60 days, then may match more after 2 years.)
  • Roth vs Traditional: Roth means you pay taxes now and take tax-free money later — often good when you are early in your career. Traditional means you pay taxes later.
  • Simple fund choice: L‑Fund is a one-click mix that gets safer as you near retirement. Good default.
  • Watch the yearly limit: Don’t accidentally put in the annual max too early in the year and miss matching opportunities later.
Open TSP Planner

5️⃣ Set up good bank and credit habits

  • Choose a main bank: Examples: USAA or Navy Federal. Look for low fees and a good mobile app.
  • One credit card to build credit: No annual fee, pay the full balance each month, keep usage under 10% of the limit.
  • Protect your credit: You can freeze or monitor your credit if worried about identity theft.

6️⃣ Career Starter Loan — when it makes sense

  • What it is: A small personal loan (banks like Navy Federal or USAA offer them) to help with start‑up costs (uniforms, car for work, moving).
  • Use it for needs, not wants: Good for things you must have to do your job; avoid using it for luxury items.
  • Plan to pay it off: Model monthly payments so they fit your budget; avoid long terms that cost more interest.
Run the Loan Model

7️⃣ Renting now vs buying with the VA loan (plain talk)

  • VA loan simple: A home loan for eligible veterans/service members that often requires no down payment and does not need private mortgage insurance (PMI). There is an upfront "funding fee" you may finance into the loan (sometimes waived for certain disabilities).
  • When to rent: If your job or location might change soon, or you don’t have 3–6 months of savings, rent until things are stable.
  • House‑hack idea: Buy a property with up to 4 units, live in one and rent the others — but run numbers conservatively and keep money set aside for repairs.
Estimate Payment

8️⃣ Know simple legal protections

  • SCRA (simple): If you had loans before you joined, SCRA can lower some interest rates to 6% while you are on active duty. Send your orders to the lender and ask them to apply it in writing.
  • Leases & contracts: If you get orders to move, some leases or phone contracts can be ended early — keep your orders and ask base legal if unsure.
  • Use base legal help: Free legal aid on base can help with landlord or contract questions.

9️⃣ Easy milestones for year one

  • Month 1: Check your LES (pay stub); put 5% into TSP; set SGLI beneficiaries; save $1,000.
  • Month 2–3: Make a budget; check renters/auto insurance; request SCRA if needed.
  • Month 4–6: Increase emergency fund to 1–2 months; consider a Roth IRA if you can.
  • End of Year: Aim for 3–6 months savings; TSP on track; tax documents organized.
Quick rule: Try to save about 20% of your base pay + BAS/BAH if possible. If not, increase contributions a little each pay period.

Quickstart: Your 30/60/90 + 12‑Month Path

  1. Days 1–30: Verify LES, set 5% TSP (Roth), save $1,000, set SGLI/beneficiaries, request SCRA if applicable.
  2. Days 31–60: Build to 1 month expenses; open 1 no‑fee credit card (autopay in full); get renters & proper auto coverage.
  3. Days 61–90: Automate bills/savings; map debt strategy (snowball/avalanche); price out cell/internet/insurance; track spending.
  4. Month 12: Emergency fund at 3–6 months; contributions on pace for TSP annual goal; evaluate housing (renew lease vs. VA pre‑approval); review insurance and credit.
Rule: Pay yourself first. Put savings on autopay the day you get paid.
Target Savings: If you can, save 20% of your base pay plus BAS/BAH. If not yet possible, add 1–2% each pay period until you reach your goal.

Your First Budget (Military‑Tuned 50/30/20)

  • 50% Needs: rent/mortgage (aim ≤30–35% gross), groceries, utilities, insurance, transport, minimum debt payments.
  • 30% Wants: restaurants, travel, hobbies, subscriptions—trim here first during tight months/TDY.
  • 20% Saving/Investing: emergency fund, TSP/IRA, sinking funds (car repair, gear, travel), extra debt paydown.
Use BAH/BAS to cover needs and route most of Base Pay toward savings/investing when possible.

Example per-pay (every 2 weeks)

Emergency Fund
$150
TSP (Roth)
5–10%
Sinking Funds
$100

Adjust to your BAH and pay grade. Automate transfers so saving happens without thinking about it.

TSP (retirement savings) — plain guide

  • What is TSP? A retirement account similar to a 401(k). You choose how much of your pay to save.
  • Roth vs Traditional: Roth = pay taxes now, money comes out tax-free later (good when taxes are low). Traditional = tax now later.
  • Simple pick: L‑Fund is an easy default mix that gets more conservative as you near retirement.
  • Don't max out too early: Spreading contributions through the year helps make sure you get employer match every month.
Minimum to get match: Set at least 5% now so you won't miss out when DoD starts matching your contributions.

Career Starter Loan — Guardrails

  • Acceptable uses: uniforms/PCS costs, reliable vehicle (needs‑based), moving deposits, high‑interest debt refinance.
  • Red flags: luxury purchases, investing borrowed funds without risk plan, long loan term that outlasts the car.
  • Decision checks: Monthly payment ≤10% of take‑home; cash reserve ≥1 month after taking the loan; insurance affordable.
Pro move: If refinancing pre‑service debt under SCRA (6% cap), compare the total interest saved before consolidating.

Rent Now or VA Loan?

  • Rent when: training pipeline/PCS uncertain, short tour length, or you lack a 3–6 month reserve.
  • Buy (VA) when: stable billet ≥2–3 years, total housing costs ≤35% gross, and you can cash‑flow repairs.
  • House‑hack idea: buy up to a 4‑plex, live in one unit, rent others; model vacancy/CapEx conservatively.
VA Loan Guide
Remember the funding fee (unless waived). VA = no PMI and $0 down with entitlement.

Tax‑Time Checklist

Common money mistakes — how to fix them

Mini Glossary

LES — Leave and Earnings Statement: your military pay stub that shows pay, allowances, and deductions.
BAH — Basic Allowance for Housing: money to help pay for housing (rent or mortgage).
BAS — Basic Allowance for Subsistence: money to help pay for food/meals.
TSP — Thrift Savings Plan: your retirement account (like a 401(k)).
BRS — Blended Retirement System: the military retirement system that includes automatic and matching TSP money.
SGLI — Servicemembers' Group Life Insurance: low-cost life insurance for service members.
TSGLI — Traumatic SGLI: extra payout if you suffer a severe injury.
SCRA — Servicemembers Civil Relief Act: rules that can lower some interest rates and protect leases/contracts while you are on active duty.
PMI — Private Mortgage Insurance: extra insurance usually required if you make a small down payment on a home (VA loans often avoid this).

Education only. Policies and rates change; verify with your finance office, TSP.gov, VA, and your lender/insurer.

Sources & references
  • BRS/TSP matching timeline & 1% automatic contributions — DoD/FINRED guidance.
  • SGLI $500k maximum; $0.05 per $1,000 premium + $1 TSGLI; FSGLI discount updates.
  • SCRA 6% cap on pre‑service debts and process overview.
  • VA loan: funding fee & closing costs; waiver criteria.
  • Navy Federal Career Kickoff program details; rates vary by program; USAA Career Starter overview.