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.

Interview transcript:

 

Mike Meese When you think about it, [2025] had as many changes for the federal workforce and for military service members as we have had almost in the last 60 years that was not during wartime. You know, if you think about it we had massive changes after 9/11, an external crisis. We had massive changes after the 2008-2009 Great Recession; another economic crisis and obviously massive changes after COVID. But here we had the election of President Trump, and in a lot of ways that he came in was adjusting for the expansions of government that took place during the last three crises, where he peeled back a lot of that. People may agree with it, people may disagree with it, but it certainly had a huge impact on people in the military, people that were veterans that were serving in the civilian workforce and many other aspects of government.

Terry Gerton Give us a couple of examples of things you saw there at Armed Forces Mutual.

Mike Meese A lot of our members, a lot of our folks were former military, they end up now working for the federal government and were given the option of the early retirement. Consequently, many of them had to go through very rapidly and assess, what is my financial situation? How much longer can I work? If I take this fork in the road, so to speak, is my family going to be secure? Again, without knowing the unknown of what happens if you leave federal service, are there going to be jobs that are going to be out there within the economy? At the same time, you had other pretty radical changes. It wasn’t an economy that you knew that you were jumping out into. There was the liberation day, so to speak, on the first of April when the tariffs were put in place, and there was substantial economic uncertainty. So it was, there’s one government train that you were on that you might want to step off of, and if you recall back earlier in this year, many economists felt that we were going to go into a recession. Fortunately, we managed to avoid that. The market continues to do well. The economy actually seems to continue to be doing well in spite of some of the mastications of a lot of economists.

Terry Gerton Were there any changes you saw in the past year that you’d want to make sure continue?

Mike Meese Well, I think being able to be respectful of government workers and giving them the options wherever you did. The people in the Department of Veterans Affairs talked very rapidly about that they were going to try to take down 80,000 workers. Most of those have tended to be by voluntary separations or not hiring new people, and it’s had an impact on the workforce. But as much as possible, respecting the wishes of government workers and being able to do that has been a positive thing. Also, it will be very interesting because, as sort of a studier of this from a public policy perspective, the president has really stretched the bounds of executive power, and now courts and increasingly the Congress are peeling that back. One example was when the president adjusted the collective bargaining rights of many federal workers, Congress has recently started to peel that back. And so the question is, are many of these changes that were done unilaterally by the executive going to stand the test of time as a powerful president doing things? Whether you agree or disagree with them, unless they become institutionalized, we will tend to revert back to where we were before.

Terry Gerton That’s helpful insight. Certainly one of the things that marked the calendar year 2025, the beginning of fiscal year 2026, was the government shutdown, the longest lapse in appropriations ever. I think so many folks don’t understand the tenuousness of many service members and veterans’ financial status. And whether they missed a SNAP payment or they missed up a paycheck, many were really significantly impacted. Talk us through that and what you saw at Armed Forces Mutual.

Mike Meese Yeah, it’s unfortunate, but somewhere in between a quarter and a third of service members are just one or two paychecks away that if they had a $400 extraordinary expense, that would really set them back. And so consequently, although fortunately, the shutdown was resolved and no military paychecks did not take place, there was a heck of a lot of uncertainty in that. For Armed Forces Mutual, for example, we have a lot of people that pay us their insurance payments by allotment. Normally we get those allotments four days before payday, or we get the information from the Defense Finance and Accounting Service four days before payday. We actually did not get them until about 12 hours before payday. So it literally was the federal government putting things together right before the 31st of October to be able to get things done. And that anxiety for us, and I’m sure every other military-supporting organization, all the banks and everybody else, were working right at the last minute. Service members were postponing vacations. The biggest issues that we saw was people that were literally in the middle of a permanent change of station and the funds either would not come through for that, or maybe they were supposed to go into government quarters, but it was not an essential person that was going to inspect those government quarters. So they’re living on the economy having to pay for a hotel bill while they were moving into those quarters. And so although it did not affect everybody across the board, there were selected pockets where people ended up with some very extraordinary expenses that they might not have been prepared for.

Terry Gerton Mike, there was some proposed legislation that would perhaps mitigate this in the future. What’s your sense of its possibility?

Mike Meese The good news was, and I think we talked about this when we talked in October, everything in the law says that people that were going to be furloughed were in fact going to get back pay. And when this passed, part of the law was for individuals to get back pay. That ought to be permanently part of that law so that you remove the uncertainty and the potential threats that people are not going to get paid on that. In fact, what we really ought to do is find a way for Congress and the executive to work together to get all 13 bills passed by the end of the fiscal year. And that way, you don’t run into this challenge. In fact, this shutdown is probably a good example because I don’t think, whether you’re on one side or the other, anybody hugely politically benefited from this one way or the other. People will write op-eds about it, but nobody outside of Washington cares about that. They just know that government didn’t function for almost a month and a half.

Terry Gerton I’m speaking with Mike Meese. He’s the president of Armed Forces Mutual. Mike, what lessons do you want to make sure that service members, families and veterans take from 2025?

Mike Meese Well, the first is, just following up on the shutdown, some people, especially federal civilian workers, they got lump sum pays in November, at the end of November, where they deferred going out to dinner, deferred vacation or deferred other spending in October. When you get that lump sum pay, that’s actually a good opportunity because you can’t go back out to dinner like you were going to in October. Save that money, set it aside in an emergency fund. Prepare for future potential shutdowns and put the money toward your long-term goals. So that, I think, would be a very important thing. The second thing is, be prepared yourself, always. And that’s keeping your skills up, keeping your resume handy, keeping that LinkedIn profile there. I don’t know what will happen in the future in terms of other federal government shutdowns or opportunities for a deferred retirement system, but it’s always something that people should bear in mind that, especially since we have seen that government jobs that they thought were going to be permanent may not be permanent, you’ve got to be able to have other options.

Terry Gerton Well, speaking of that smart financial planning, any advice for folks who are navigating financial stress through the holidays or perhaps just after?

Mike Meese Well, that is always a challenge. What I tell people, we sometimes have gotten a little bit of a habit; back during COVID when you couldn’t travel, you tended to get more extravagant gifts for the family that you were not visiting. Now that you’re visiting and traveling to them, recognize that just being there is part of that gift, so you don’t need to be quite as lavish on the expenditures. The other thing that I talk with military families, there was one Christmas where I had five members of our family, it turned out that visiting two sets of relatives, we actually flew on Christmas day. And if you fly on Christmas, it’s actually a very cheap fare. It’s kind of strange being in the airport on Christmas but all the flight attendants and pilots are wearing hats and singing Christmas carols. They have to work that day and it turned out to save us a lot of money for a family of five. So there are ways that you can get deals even during the holidays.

Terry Gerton And as you turn your attention to 2026, what legislation or policy changes will you be watching for as the new year begins?

Mike Meese Well, it’ll be very interesting what happens with federal government workers as well as the military. Currently in the National Defense Authorization Act, the military pay increase is going to be 3.8%. And so that is actually ahead of inflation. For me as a military retiree, my pay increase as military retiree and Social Security age is only 2.8%, so the military is doing a little bit better. Federal workers, on the other hand, are going to get a 1% increase, except if they are in federal law enforcement positions, like the FBI, Customs and Border Protection, Secret Service and any other federal border law enforcement. The proposal is for them to get a 3.8% increase, the same as the military. So when you do get that pay increase, whether it’s 1% as a civilian worker, well you’ll be a little bit behind inflation, or 3. 8% in the military or law enforcement, be sure to use that judiciously and maybe put some of that away into savings because you don’t know what will end up happening in 2026.

The post From paychecks to policy shifts, 2025 tested military families. How will they fare in 2026? first appeared on Federal News Network.