The Six Most Important Financial Tips for Young Military Families

03/10/2015 04:08 pm ET | Updated May 09, 2015

As a Soldier, Sailor, Airman, Marine, or Coast Guardsman, your sworn duty and responsibility to defend the Nation sets you apart from most other Americans. But that's not all -- your financial circumstances are also different. Caring for your military family today and in the future requires a specialized approach to money management that is geared to your unique military life. Following these six tips can help you make the most of your hard-earned military income:

1. Avoid the debt trap. As a member of the American Armed Forces, you have a steady, government-issued paycheck, which means you will likely qualify for loans and credit cards. Unfortunately, you will also find that many business are eager to "help" you purchase expensive items with their credit because they charge exceptionally high interest rates. In nearly all cases, military pay and allowances can cover all your necessary expenses, so live within your income and do not take on expensive consumer debt.

2. Build up a rainy day fund - one month at a time. You should save three to six times the amount of your monthly expenses in a rainy day fund so that when a major car repair pops up, or you have to replace that old refrigerator, or travel across country for a family emergency, you don't have to go into debt to make ends meet. Simply save 1/12th of your paycheck each month and you will fill your emergency fund in less than three years.

3. Use salary increases to save for long term goals. As a servicemember, you benefit from annual cost-of-living increases and well-deserved raises for longevity and promotions. When your income goes up, put at least half of each raise into long-term savings. By implementing this simple savings strategy throughout your career, you can build substantial long-term savings for things like buying a home, paying for college, or transitioning out of the military, while still steadily improving your quality of life.

4. Use special pay to boost your financial security. The military compensates you for the extraordinary risks and stresses of deployments and moves with special pay and entitlements. Combat zone pay and tax exemptions while deployed can provide the extra funds needed to get out of debt, set up an emergency fund, or boost long-term savings. Similarly, when you are assigned to a new duty station, careful planning could put you financially ahead. In addition to military allowances that should cover all your moving expenses, you can earn money by doing a partial self-move, selling unwanted items for extra cash, and visiting relatives "rent free" while you are not paying for housing.

5. Protect your family for less through military associations. You have a hazardous job. Should you die prematurely, even the maximum Servicemembers Group Life Insurance (SGLI) coverage of $400,000 along with the military Death Gratuity of $100,000 may not be enough to support your family. Fortunately, you can supplement SGLI with affordable coverage from non-profit organizations that exclusively provide military life insurance. Tools such as life insurance calculators allow you to see if your family has enough protection.

6. Take advantage of available resources. Each military service has its own "Relief Society," which provides financial assistance to servicemembers in need. Most military bases have trained financial counselors to help you establish and maintain a budget, get out of debt, deal with creditors, and address other financial issues. The Department of Defense Military OneSource website has many financial and other tools--including free online tax preparation services. Finally, the Department of Labor Veterans' Employment and Training Service has many resources to help servicemembers and their spouses find employment when they transition. All of these resources are free, official, and can help you achieve your goals for a better financial future.

The earlier in your career that you implement these tips, the sooner you'll achieve financial stability and the stronger your personal finances will be able to grow throughout your life.

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