Money Lessons I Learned in the Army

This post is about money lessons I learned in the Army.  Today, I’m going to share some tips to help Soldiers, NCOs and Officers do a better job managing their money.  I think it’s truly sad that no one in the Army is taught about money.  We have classes about map reading, maintaining equipment, how to do inventories and hundreds of other things, yet there are never any classes about important life skills, such as staying married and planning for your future.

I was very fortunate to have two mentors in the Army who were both very good at handling money.  They taught me many valuable lessons that I try to abide by today.  My first mentor was one of my military professors during ROTC.  The other was my Battalion XO when I was a young Lieutenant.

What I want to do in the paragraphs below is share some of the information they taught me.  And while I am not an accountant, attorney or financial planner (my disclaimer) I do believe these lessons are quite simple and would benefit anyone.

During my senior or college, one of my ROTC professors sat me down and educated me about money.  He didn’t have to, but he showed an interest in me and wanted to pass on his wisdom.  He told me that I was about to be commissioned soon and that I would have all this “new found” money.  Before I went off and spent it all he recommended I do a few things.

The first lesson was to NEVER buy a brand new car OR have a car payment.  He taught me that new cars depreciate in value quickly and that having a car payment was a quick way to stay broke.  He told me to buy a good, affordable used car for cash and also to save 10% of my earnings each month for retirement.  He helped me set up two investment accounts to have my paycheck automatically debited each month.  I started saving money before I even finished college.

Unfortunately, I was young and dumb.  I did NOT follow his advice.  I went out and purchased a brand new Honda Accord and had big car payments (almost $400 per month).  I wanted to look cool but I ended up looking like a fool.  I also stopped my monthly investing (for a few years) because I was poorly disciplined and thought I needed the money for other things (like the car).

I turned out to be the fool.  Had I followed his advice I would have been much better off. I’m still grateful for the lessons though.  It took me a while to get my head out of my you know what, but I finally figured it out.  At the time of this writing I have a car that I’ve had for SEVEN years and NEVER had a payment on it.  I also save some money each month.

My other “money mentor” I had as a young Lieutenant.  He was my Battalion XO.  A lot of other Officers and people laughed at the guy because he drove an old “beat up” pick up truck, while everyone else was driving around in expensive, fancy cars with large car payments.  He also lived in a very modest house.

But the guy was a STUD when it comes to managing your money.

He said that when he retired from the Army (which would be a few years later) he never wanted to have to work again.  He had slowly built up his empire beginning right after he was commissioned, saving and investing most of his paycheck every month.  He also bought a house every where he went and then simply rented it out before he made his next PCS.

If you were to look at him you would have thought he was broke, but I’d be willing to bet now that he was one of the wealthiest people I have ever worked with or personally met. The major lessons I learned from him were to live below your means, stay debt free and invest in real estate.  He also was against owning a new car or having car payments.

These two mentors really helped shape the way I think about money today.  Throw in a few financial planning books that I’ve read and some other financial mentors outside of the Army and I now think about money totally different than I used to.

The bottom line is you can be smart with your money now and live well later on down the road or you can live for the moment and never be able to retire!

Whether you are an Officer, NCO or Soldier I hope you follow this simple advice:

  • Never have a car payment
  • When you buy a car, buy a used car for cash
  • Invest money every paycheck for retirement; 10% or more
  • Invest in real estate
  • Try to stay out of debt, other than your home

Do that and you can really change your life.  Another thing I recommend you do is read the book “The Total Money Makeover” by Dave Ramsey. This is the best financial book I’ve ever read.

What are your thoughts about these money lessons I learned in the Army?  Leave a comment below to let me know what you think. I look forward to hearing from you.

DISCLAIMER: These views are just my opinion.  I am not a financial planner or accountant.  This information is for educational purposes only.

chuck holmes

Chuck Holmes
Former Army Major (resigned)

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