Financial resilience for military families: Overcoming common challenges

May is Military Appreciation Month. While we’re often quick to show our appreciation to our military for their service at home and overseas, we may not recognize the financial and lifestyle sacrifices they’ve made.

Military families face unique financial challenges that often differ from their civilian counterparts. From frequent relocations to deployment uncertainties, these circumstances can create financial strain even for the most disciplined households. Understanding these challenges is the first step toward building financial resilience and long-term security.

Common financial challenges for military families

At the outset of a career in the military, you and your family should be prepared for a few common financial challenges that may be thrown your way. The better you prepare for them at the outset, the less likely they are to blindside you and cause major life disruptions.

• Frequent relocations: Military families typically move every two to three years, which creates significant financial pressure. Each permanent change of station (PCS) move involves upfront costs that may not be fully reimbursed, temporary housing expenses, potential periods of spouse unemployment, and housing market fluctuations that can affect home sales or rentals.
• Spouse employment challenges: Military spouses face unemployment rates nearly three times the national average. Frequent relocations make it difficult to maintain career progression, build seniority, or establish professional networks. This “military spouse penalty” can reduce household income substantially over a 20-year military career.
• Deployment-related expenses: Deployments often bring additional costs: communication services to stay connected, care packages, and sometimes the need for additional childcare or household help. While service members receive some deployment-related pay increases, these may not fully offset the associated expenses.
• Transition to civilian life: The shift from military to civilian employment represents a significant financial inflection point. Most benefits, such as Servicemembers Group Life Insurance and free healthcare end when servicemembers take off the uniform. Many military families experience a temporary income reduction during this transition, and navigating civilian benefits systems can be complex after years in the military’s comprehensive structure.

To overcome some of these challenges there are several strategies that military families can consider.

Maximize military-specific benefits

It can be difficult to know where to look for financial assistance, especially when a service member is just getting their civilian life started. However, there are several readily available benefits that service members ought to take advantage of to help them with any financial issues or savings.

• Thrift Savings Plan (TSP): The military’s version of a 401(k) offers low-fee investment options. The Blended Retirement System provides matching contributions of up to 5% of base payments, which are essentially free money toward retirement.
• Military STAR Card: Unlike predatory lenders targeting military personnel, the Exchange Credit Program offers this exclusive card, which can be used on most military installations with reasonable interest rates and benefits that support military communities.
• Credible military organizations and benefits: Military OneSource is a useful source of information, including free tax preparation software. Every military service has relief societies and community service organizations that can assist with advice, financial counselling and even short-term loans or grants to help military families address financial challenges. Additionally, some associations can provide free objective financial information tailored for military families.

Create portable career paths for spouses

Beyond the servicemember themselves, there are many ways that military spouses can aid their family’s financial situation, even if they have to move several times throughout their spouse’s military career.

• Remote-friendly careers: Fields like virtual assistance, digital marketing, telehealth and online education offer flexibility across relocations.
• Military Spouse Employment Partnership (MSEP): This Defense Department program connects spouses with employer partners who commit to recruiting, hiring and retaining military spouses. Many employers participate in MSEP and the Blue Star Families 4+1 program supporting military spouses.
• Spouse scholarship program: The DoD My Career Advancement Account (MyCAA) provides up to $4,000 in tuition assistance for eligible military spouses pursuing licenses, certifications or associate degrees in portable career fields.

Develop financial strategies for “expected” emergencies

Sometimes financial hardships come upon you out of nowhere, but others can be planned for to a degree. There are several ways military families can prepare themselves for difficult times or unexpected lifestyle changes that may come their way.

• PCS emergency fund: Beyond a general emergency fund, maintain a dedicated PCS fund of $2,000-$3,000 to cover unreimbursed moving expenses.
• Dislocation allowance (DLA) planning: Request advance DLA payments to cover upfront moving costs rather than relying on credit cards.
• Deployment budget adjustments: Create a modified budget that accounts for deployment-related changes in expenses and income.
• Savings acceleration: With reduced expenses during deployment, try to save at least 50% of deployment-related special pay.

Prepare for military-to-civilian transition

Leaving the military is a life-altering transition that challenges many veterans as they start a new and different chapter of their lives. Thankfully, there are several tools that veterans can use to help ease this transition and set themselves and their families up for a successful life when their military days are behind them.

• Transition emergency fund: Build savings equivalent to 6-12 months of expenses before separation to provide a financial cushion so that you have the flexibility to choose the right job — not just the first one that is available.
• Education benefits optimization: Strategically use GI Bill benefits for yourself or transfer those benefits to your family members to maximize their value. Ensure that you check with colleges to leverage “yellow ribbon” programs that may cover the difference between what the military pays and full tuition.
• VA loan planning: Understand how to leverage VA home loan benefits even after transition to civilian life. As a veteran, you are likely able to use your benefits to purchase a home with little or no down payment.
• Life insurance: While still in uniform, ensure that you secure life insurance that will continue to protect your family after you leave the service.

Military families possess unique strengths — discipline, adaptability and resourcefulness — that serve as powerful assets in building financial security. By recognizing these capabilities and leveraging military-specific benefits, service members and their families can take control of their financial future regardless of the challenges military life presents. Servicemembers’ commitment to serving the nation should be matched with the financial freedom to pursue their dreams both during and after their military career.

Michael Meese is president of Armed Forces Mutual.

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