By Doug Nordman
Military Spouse Guest Writer and founder of

A few years ago a military retiree shared an observation with me: "The military takes care of you. Getting married? We'll raise your compensation. We'll tend to the medical needs of you and your family. Have another kid? We might give you a bigger house. Having trouble paying your bills? Your boss will see that you get counseling. Getting fat? The system will 'help' you get thinner. The chain of command will see to your needs in exchange for your loyalty and service."

The military is also concerned that you be financially responsible, but your chain of command doesn't have to care whether you're financially independent. "Debt free" is good enough for the service, even if you're living paycheck-to-paycheck. The military will tell you about preparing for retirement, and you'll be offered ways to save for financial independence, but you'll have to do your own planning. The decisions you make in your 20s will have an impact on your financial independence.

Life decisions like education, marriage, family, and career involve far more important considerations than "just" money. Of course if your decisions happen to give you a head start on financial independence then time (and compounding) will take care of the rest. You'll still need to take the reins. Your military skills (and the transition assistance programs) will help you start a bridge career, but you'll have to use your own initiative and planning to achieve retirement. The vast majority of veterans only stay a few years, and only a few stay for 20 years. The work/life balance is a perpetual struggle, and it's important not to be so focused on work that you miss the life opportunities around you. If you'd rather make your own life decisions, then stay alert to opportunities for financial independence.

Let's start with two small but powerful steps. The first step is to start saving.

Start saving early

USAA's advisors and dozens of other resources can handle the details of savings goals and what investments to buy. More books and websites tell you how to feel about money, how to safely use debt, and how to handle risks. But all the advisors, books, websites, and TV shows boil down to one piece of advice: save money. Most of us will never save hundreds of thousands of dollars a year, so the most important factor is time. The only way to maximize that time is to start saving now. Even $50 per paycheck starts a habit that will grow for the rest of your career.

The race to retirement is a marathon, not a sprint, so it's fine to start slow. The first year or two of paychecks may only support a small amount of savings. Once the saving habit is formed, however, it's easier to boost it through every pay raise and promotion.

The "savings mindset" is far more important than the amount. Spend money only when it adds value and joy to your life, and save for the goals that will add even more. Don't ask: "Can I afford it?" The saving questions are: "Which do I value more? Do I want to enjoy this today, or do I want to save the money for retirement?" "How many months do I want to work to pay for this, or would I rather save the money for retirement?"

Focus on the financial decisions that have a big impact on the budget. Saving money doesn't just start with a $5 latte. Instead of agonizing over small daily expenses, consider your big lifestyle choices that will have an immediate and large impact on your savings. Start with your housing costs. Do you want a McMansion across town, or would a more modest home by the base work better? What about transportation? If you're living closer to work, could you bicycle or walk? Do you really need a hot convertible or a big truck? Can you buy a cheap used car and drive it into the ground? What about other possessions? If you're going to spend most of your time in the desert or at sea, do you really need a lot of expensive stuff to care for and pay storage charges on? These decisions will save you hundreds of dollars a week, far more than the latte.

Track your spending

See if your spending matches your values. The only way to understand your progress toward retirement is to track your spending. You want to save money, invest it, track the progress of those investments, and reach a portfolio size that supports your lifetime spending. The only way to calculate how much you'll need to reach your goal is to know how much you're spending. The only way to build a budget and to understand your expenses is to track your spending.

The way you track your spending is up to you: expensive accounting programs, free software, spreadsheets, handwritten notebooks, or even cash in envelopes for different spending categories. You have to develop a habit that works for you. Try saving receipts during the day and entering them onto a computer that night, entering purchases in a smartphone app as you go about your daily routine, or simply spending until that envelope runs out of money.

If you're not already tracking your spending, then start today: write down everything that you spent. Do it again tomorrow, and keep practicing it until it's a habit. You have to start sometime, and you can start today.

About Doug Nordman

I retired from the Navy a decade ago after 20 years in the submarine force. My spouse spent 17 years in the Navy's Meteorology/Oceanography community and eight more in the Navy Reserve. Both of us are enjoying our beach-bum retirement in Hawaii, where we were first stationed in 1989. Today our daughter is a college junior on an NROTC scholarship.

I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other servicemembers and veterans. All royalties are donated to military charities (over $1100 to date), and we're collecting more stories for the second edition at Stop by to learn more about gaining financial independence and retiring on your terms, and share your story!