For Gen Z military families, navigating life in their early-to-mid 20s means wading their way through unique challenges that can get overwhelming pretty quickly. Between frequent relocations, long deployments, unpredictable life schedules and limited early-career earnings, financial planning is more than a good idea — it’s essential for long-term stability.

According to the Congressional Research Service, 40% of active-duty military personnel are age 25 or younger, right within the Gen Z age group. Yet these same service members face the brunt of frequent moves, deployments and today’s rising cost of living.

This guide is designed specifically for Gen Z service members and their spouses, helping them understand their financial situations, insurance options, avoid common financial pitfalls and build stable careers, all while dealing with the real-world pressures of military life.

Financial pressures Gen Z military families face

While budgeting, insurance and retirement planning are critical, it’s also important to get a real sense of the actual financial stressors younger military families are grappling with:

• Living paycheck to paycheck. Even with basic allowance for housing and basic allowance for subsistence, many junior enlisted families still find it hard to keep up with rising living costs. This becomes even more of a precarious situation when you add in dependents.
• Delayed reimbursements during permanent change of station (PCS) moves, creating short-term cash crunches.
• Limited emergency savings. The Military Family Advisory Network’s (MFAN) 2023 survey found 22.2% of military families had less than $500 in savings.
• Predatory lending, with high-interest auto or payday lenders near bases disproportionately targeting young servicemembers.
• Military spouse underemployment, leaving household income vulnerable when frequent moves disrupt career continuity.

MFAN also found that nearly 80% of respondents spend more on housing than they can comfortably afford, and 57% experienced a financial emergency in the past two years. These aren’t abstract concerns that most young servicemembers and their families can just ignore, hoping that they’ll never be impacted; these are everyday realities for Gen Z military families.

Insurance best practices

Adult life is just getting started in your 20s, and navigating insurance options can feel overwhelming. But taking the time to learn your choices will set your family up for a secure financial future.

• Life insurance: Most servicemembers are automatically enrolled in Service Members’ Group Life Insurance (SGLI), with Family Servicemembers’ Group Life Insurance (FSGLI) extending coverage to spouses and children. Review coverage annually. Also, compare options across SGLI, FSGLI and trusted military nonprofits to find what fits your family best.
• Disability insurance: Often overlooked, this protects your family if an injury prevents you from working, even off-duty. Supplemental private coverage can be wise if your lifestyle expenses exceed your military pay.
• Renters insurance: Essential for families who move often; it protects your belongings through relocations.
• Healthcare: TRICARE provides strong coverage, but learn the details on copays and referrals, especially when stationed overseas.

Common financial missteps and how to fix them

Mistake #1: Overbudgeting and lack of budgeting

BAH and BAS are designed to offset housing and food costs, not fund lifestyle inflation. Stick to a budget that keeps fixed expenses well below your income. Free tools from Military OneSource can help track spending.

Mistake #2: Not saving for retirement

Retirement may feel far away, but starting early has an outsized impact. Contribute at least 5% to your Thrift Savings Plan (TSP) — a military contribution retirement program similar to that of a 401k — to secure the full Defense Department match. Even small contributions now can grow into hundreds of thousands later.

Mistake #3: Misusing credit or loans

Predatory lenders near bases often target young servicemembers. Try to avoid any predatory or misleading lenders. Instead, consider a secured credit card or an on-base credit union to build credit responsibly. Always be sure to pay your balance in full.

Mistake #4: Skipping an emergency fund

PCS moves, car repairs or medical costs can’t always be predicted. Start small: Even $10 to $20 per week automatically transferred to savings helps to build a safety net. According to MFAN’s 2023 survey, enlisted families with children that have undergone recent PCS moves are most likely to face financial hardship, making an emergency cushion critical.

In addition to avoiding pitfalls, here are realistic strategies to strengthen your finances:

• Tap military relief organizations like Army Emergency Relief (AER) or Navy-Marine Corps Relief Society (NMCRS) for interest-free loans or grants during emergencies.
• Plan for post-military life: Keep in mind that SGLI and other benefits change once you leave active duty. Compare nonprofit alternatives early to avoid gaps.
• Leverage nonprofits you can trust: Some offer competitive life insurance, savings products or financial counseling designed for servicemembers’ long-term interests.
• Budget with inflation in mind: Rising costs are hitting Gen Z hard. Nearly 48% say they don’t feel financially secure, and over 40% say they’re struggling to make ends meet. Prioritize life’s essentials and be realistic about what you can afford outside of them.

Maintaining a career as a military spouse

Frequent relocations are undoubtedly disruptive, but they don’t have to end career growth. Military spouses may want to focus on careers that can easily move around with them, like healthcare, education, IT or freelancing.

Take advantage of programs like MyCAA, which offers $4,000 in tuition assistance for career training; Military OneSource, which offers resume assistance, free career coaching and financial counseling; and Hiring Our Heroes, which offers networking opportunities and job placement assistance for military spouses. These programs can help reduce underemployment and strengthen household stability, especially during tempestuous times like during and after a PCS move.

Putting it all together

Starting adulthood, a military career and a family all at once is an incredibly challenging undertaking. The financial pressures are real, but with the right knowledge and proactive steps, Gen Z military families can turn instability and uncertainty into long-term security.

By understanding insurance options, making smart money moves, tapping into military-specific resources and planning ahead for life after service, families can not only weather the unpredictability of military life, but also build strong financial foundations for the future.

Alejandra Cortes-Camargo is a brand marketing coordinator at Armed Forces Mutual.

The post Navigating insurance, maintaining careers and making smart money moves as a Gen Z military family first appeared on Federal News Network.