Save Your First $1,000 $10,000 or $100,000 in the Military | Military Money Manual Podcast Episode 73

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How to save your first $1,000 $10,000 or $100,000 in the US military.

Military Money Manual Podcast Episode #73 Links

Outline of Episode:

  • Jamie and Spencer’s personal milestone timeline
  • How to know if you're on track-what might be a normal timeline?
  • Tips to get to the first $1,000
  • Why is the first $1,000 the hardest?
  • What are some goals that I could start out with? 
  • Habit building resources
  • Military Installation resources

Military Money Manual Podcast Episode #73 Transcript

[00:00:00] Spencer: You can only make so much money an hour, but your money can make an unlimited amount of money per hour, because once compounding interest kicks in a meaningful way, which I think for most people, they start noticing it when they get to that $100,000 mark and they realize, “Oh, even if I just put this money into a 4% CD, that's $4,000 a year.”

That might be a substantial chunk of the amount of money that you are making a year. But you can use the rule of 72 to see how fast your savings will double. 

Hello everyone. Welcome to the Military Money Manual Podcast. Today Jamie and I are going to walk through how to save your first $1,000 while you're in the military.

Jamie, I don't think it matters what level of net worth or savings we're talking about, but getting to that first level of savings is always the hardest. Money begets money and good habits begets good habits. Once you've saved your first $1,000, the next thousand comes much quicker and easier. And the same is true for the next $10,000 and the next $100,000.

[00:01:24] Jamie: $1,000 is a very important psychological milestone for many young officers and enlisted service members. If you're digging yourself out from under a mountain of debt, it can be extremely rewarding to have this target that's easy to achieve. 

Spencer, you know what else is rewarding though?

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[00:01:51] Spencer: We do appreciate it. So true, Jamie. 

Okay. Back to our regularly scheduled program.

So in my net worth tracker, it's just a Google spreadsheet where I've been keeping track. I just update it every month. I go in and add up our assets and I put in our liabilities, and at the end of the row, the spreadsheet just kicks out, “Hey, this is how much you're worth, at least monetary.” It's great because I can go back and I can tell you exactly the month where we went to $1,000 net worth.

It was in June 2012, so it was two years after I started active duty. We were still paying off my student loans, but we had $16,000 saved in our Roth IRA and $20,000 in cash. So we had $36,000 of assets and I had $31,000 of student loan debt. So that left us with a $5,000 net worth. So that was the first data point I have in my spreadsheet where we went, we actually, so the month before, I think we were like negative $300, and then in that month we bumped up to $5,000. 

So that was to get to our first thousand, Jamie, it took us two years of active duty. We actually hit the next milestone, the $10,000 positive net worth just three months later after that. So it took us two years and three months of active duty time to get to a $10,000 positive net worth.

And remember, we were starting from pretty far in the red between us. We had over $100,000 of student loan debt. And then eight months after we've hit that first $10,000 milestone, we hit $20,000. And then it was only three months after that we hit $30,000. So you can see, just in my own personal experience, it snowballs rapidly where to get to whatever level of wealth you're talking about, whether it's $1,000, $10,000, or $100,000, the first one is always gonna take the longest.

Again, in my case, the first $100,000 took us four years and two months to get to. But the next $100,000 only took one year and eight months, so less than half the time to get to the second $100,000. Wow.

[00:03:49] Jamie: Yeah. We didn't really track it early on when we were starting out our finance journey, but I do know that we had a similar experience of, once it starts rolling, it goes quick.

But we didn't really start tracking until we were about $200,000 of net worth. And once we had that, then we saw that within about three or four years, it tripled and we went from $200,000 to 600,000 very quickly. So that's a similar experience, but not quite the same historical data. But really the important thing is, like you said earlier, Spencer, is once you get a thousand, then it becomes $2000 and $5,000 and $10,000, and next thing you know you're pushing the $100,000.

Is this meant to make someone feel bad or what? Why are we sharing our personal experiences here with these timelines?

[00:04:34] Spencer: Yeah, I think it's good to share these timelines, to help normalize that savings, just like Rome, it was not built in a day or overnight. It takes weeks and sometimes months, and, for a lot of people they might get that, that fire inside or that, that bug where they're like, man, like something's missing.

I'm not doing something right with my finances. I feel like I'm just treading water, or I'm moving backward, or I'm still living paycheck to paycheck. And they go out there and they might read a bunch of blogs or listen to a bunch of podcasts. Maybe this one they might go read some books like The Military Money Manual for instance.

And they get this, this huge motivation, this gazelle-like intensity you might hear and they buckle down. They're like, okay, we're gonna, we're gonna, cut our expenses, we're gonna increase our income, we're gonna invest the difference. And then a couple of weeks go by and they're like, man, I'm still treading water.

I feel like I'm not getting anywhere. And the point of mentioning all these numbers is that it takes weeks and months and sometimes, often years to get the ball rolling. But once it's going, once the snowball is rolling downhill and picking up more snow, it's hard to stop it. It might seem like your actions are inconsequential in the moment or in the week, in the month, or in the year, but it adds up so much more rapidly than you can anticipate, and time goes by whether you're saving or not.

And so if you get to a year from now or two years from now, and you look at your bank account balance or your investment statement, or your TSP account, for instance, and you think, “Man, like that's a lot higher than I thought it was gonna be, or, that's a lot lower than I thought it was gonna be.” It's all because of the little actions that you took along the way and the automation that you put in place to basically send money from your present self to your future self.

[00:06:25] Jamie: We were talking before the show about how to know if you're on track or what might be the normal timeline, and Spencer and I decided that maybe about three years of active duty service, or maybe three years from now if you're just getting into personal finance, if you've been in three years and you don't have $1,000 saved, then that should probably be a wake-up call or a red flag to you.

There's nothing magical about that date. We just made it up, but that might be a good rule of thumb for you to look at. If you've been in three years, or you've been working towards personal finance improvements for three years and you haven't made this yet, then you're probably not quite focused as you need to be.

Those same habits that got you to $1,000, we'll get you to $10,000 and then $100,000. These are all the principles that you talk about in your book, Spencer, at The Military Money Manual. In order to get your first $1,000, it can be as simple as decreasing your expenses.

Increasing your income and you automatically invest the difference. Ideally, you do them both. You decrease your expenses and increase your income at the same. Some other ways to help get that first thousand dollars, or at least get a big chunk of that all at once is maybe during a PCS you get a payment at the end, or you save half of your dislocation allowance for some airmen, some soldiers, Marines, that could be several thousand dollars for dislocation allowance.

Maybe you set some of that aside that is unused and use that to start your initial savings goal. Maybe during A TDY, you have a long TDY where you go overseas to Ramstein, for example. And per diem there is, I don't know, $110, $130 a day or something like that. You eat real frugally and you come home and you got a five or $600 paycheck towards your first $1,000, and that's pretty awesome.

Maybe your spouse works occasionally and next time they do get some variable income, you put the whole thing towards your goal. 

When we had Ben Miller on from the ChroniFI team, that was episode 65. And remember, you can find all of our show notes on and Ben Miller had the analogy of when you increase your income and decrease your expenses at the same time, it's like you're running a race faster and the finish line is also moving closer to you at the same time.

[00:08:32] Spencer: Yeah I saw this really dumb social media meme the other day, Jamie, where it's basically trying to, build a savings habit.

But week one you save a dollar, week two, you save $2, week three you save $3, and so on and so forth. Until week 25, you're setting aside $52 and at the end of the year you have something over, a thousand, $1,300 or something. But all I could think of was what a waste of time and willpower those first few weeks.

If you're logging into your USAA app or your Navy Federal Credit Union app, and you're transferring a dollar from your checking account to your savings account every Sunday. If that's what it takes to get you to build a savings habit. Awesome, great. But I know for me I would give up on that within probably the first week.

Honestly. I would move that first dollar and I would say, what is the point? Like a dollar, maybe 20, 30 years ago a dollar got you a little bit of gas, but today that's just not gonna cut it. 

So rather than doing something so manual and hands-on, why not just set up an automatic withdrawal from your checking account on the first and the 15th, or you could log into MyPay and set up a, what do they call it?

An allotment and you could just have on the first and 15th of every month, a hundred dollars pulled out of your checking account and go into your Vanguard Roth IRA or go into your emergency fund, and at the end of the year, twice as much money you get $2,400 saved now a hundred dollars every paycheck.

If you're just, if you're brand new, that might be a bridge too far, but what about $50 a paycheck? What about $25 a paycheck? Setting up those automatic savings and just making that one decision that removes a hundred future decisions, because from now on, you're not even gonna notice that money's gone.

Once or twice a month, you're gonna glance at that savings account and be like, oh, wow. Look, there's another, a hundred dollars in there. There's a, yeah, that's $500 more than I remember it being. And that's just because you've taken yourself out of the loop. So rather than staying motivated, just stay automated, right?

Don't use your limited willpower to set a financial goal and then to work towards a financial goal. Use your willpower for other things, like eating a better diet or hanging out with better people or it could be as simple as just getting to the gym every day, right? Use your willpower for those kinds of things, but not for your money.

That's the beauty of our modern capitalist digital economy, is that you can automate all of your savings. You can automate all of your investing. And then you don't have to worry about it. You just set it up once and you can max out your Roth IRA. You can max out your TSP for the year because you logged in December and you changed your percentage to the correct percentage to max out your TSP by the end of the following year in December and earn your 5% match.

Again, you can find there's a chart I have on my website. You can just Google “BRS TSP 5% match”. And you can find the chart that I build every year on the website, and you can just go in November or December and change that percentage. And if you want to max out your TSP every year, there's a financial independence website,, and he's got a great blog post on why the first thousand is the hardest.

If you Google, “Why is the first thousand the hardest?” His website should pop up, but he explains that it's primarily due to compounding interest, and it makes sense if you think about it. 

So if you're going from $1 to $2 or $1,000 to $2,000 or $10,000 to $20,000, right? If you're doubling your money, that's a hundred percent increase.

But then to go from $2 to $3 is only a 50% increase. And if you think about that logically all the way through going from $9 to $10 is only an 11% increase. So if your money is making an 11% return, then that last dollar in the year to get from, $9 to $10 is just coming from your interest. So to expand the point further, the first $100,000, the first $1,000, Is the hardest because it's primarily coming from your labor and your savings. So yeah, you're, you can only make so much money an hour, but your money can make an unlimited amount of money per hour because once compounding interest kicks in a meaningful way, which I think for most people, they start noticing it when they get to that a $100,000 mark and they realize, “Oh, like even if I just put this money into a 4% D, that's $4,000 a year.”

That might be a. Chunk of the amount of money that you are making a year, but you can use the rule of 72 to see how fast your savings will double. So for instance, if the rate of return is 7.2%, you just divide 72 by 7.2 and you get 10. And so that's 10 years to double. So you can Google “rule of 72”.

It's one of those nice little finance shortcuts that you can use. But basically, you can take any interest rate, divide 72 by that interest rate, and then you can figure out how many years it's gonna take for your money to double. Now, for most things, other than, bank accounts and CDs, where the rate of return is usually fixed for a period of time.

And the stock market, we can estimate, we can guess, but we have no idea what the stock market's gonna return every year. So you can plug numbers in there and think, oh it's, for the last 10 years, it's averaged a 12% return. So my money should double in six years. It might not do exactly that in the next couple of years, but you're gonna be making contributions along the way, and you're going to further be reducing that timeline while your money is compounding as well.

So I think for almost everyone, the first $100,000 is the hardest because. You're getting to that number with your sweat, blood, and tears, and your manual labor. Once you've hit that a $100,000 mark. And even before, you know there's nothing magical about ticking over from $99,999 to $100,000.

But once you've hit that mark, your compounding interest starts to go to work and you keep making contributions as well. So it's gonna reduce the timeline from, your first $100,000 might take you five years, 10 years to get to, but the next one you could probably cut that time in half.

And then for the next one, cut that time in half again. And that's when you really start to see that exponential growth curve take off.

[00:14:58] Jamie: Yeah, a lot of times our listeners have probably heard us talk about your accounts doubling every 7 to 10 years, 8 to 10 years. And so that's kinda where that comes from is the average, eight to 10, 12% return, plus additional contributions. So that's a good explanation of that. 

Spencer, I would add that the most important factor in your first $1,000 isn't necessarily the dollars there. It's the habits that you develop along the way, the skills, and the experience that comes with them. So $1,000 today isn't really that much money.

It doesn't go very far anymore. Probably not even a month's rent. Maybe a couple of months of food, but maybe not even one month of food. If you have a family. But it can make a massive difference in your mental health and help reduce stress when you have that starter emergency fund of $1,000 saved and you're no longer living paycheck to paycheck.

I just saw the 2023 study from January that said that 57% of Americans do not have $1,000 saved. So because the military is a microcosm of society, that means that probably about 60% of your coworkers are dealing with the stress of not having anything in savings either. So when your windshield gets a crack in it, when you have a pop tire, or you need two new tires, all those things add stress to your life.

So those habits you develop along the way. Are more important than necessarily saving that first thousand dollars. And if you can get that thousand dollars mark, you can get to the $10,000 mark. If you can save $10,000. It's just a matter of time before you hit $100,000. And then if you can do $100,000, you see where I'm going with this?

It's only a matter of time till you get a million dollars and we'll be cheering you along the whole time.

[00:16:35] Spencer: Yeah, I think that's so important for people to realize that. They might want to be a millionaire or they might want to be wealthy, but I think it was Lazu, the Chinese philosopher said the journey of a thousand miles begins with a single step.

Yeah, I would say just do something.

[00:16:55] Spencer: So for most people, you're going to start by saving that first $1,000 and then it's gonna be $10,000, then $100,000, and then $1,000,000.

On that journey towards the $100,000 mark, for instance, that's a great time to dive deep into the world of personal finance investing and financial independence and understand, “Okay, why am I setting all this money aside? What is the finish line? Is there a finish line? Can I get there?”

And I think what you'll realize reading a lot of the financial independence greats out there, Mr. Money Mustache, Mad FIentist, Doug Nordman, any of my stuff, what you'll realize is that financial independence can be a finish line of sorts. I'll caveat it that way because essentially what you are doing is you are removing the requirement to work, but I think what you'll find is that most people don't follow up on the RE side of the fire movement. So FIRE, Financial Independence Retire Early. Most people get to the FI side, the financial independence side, but choose not to do the retire early side because they usually are pretty young and motivated and they want to keep working. They want to keep contributing, but it's on their terms now.

So if that means that you reach financial independence while you're still on active duty and you don't want to take that 365 deployment to Saudi Arabia, guess what? You can get out and go to the Guard or Reserve and finish up your 20 years of service in the Guard or Reserve part-time, and you have those savings. 

You have that financial independence backstop where you know that, hey, if this doesn't work out or you don't get enough orders or whatever, you're gonna be okay. You have the savings. And I think for a lot of people, they get fixated on, “Oh, I have to hit that FI number, I have to hit that.”

But what you realize as you journey towards that FI number is you hit milestones along the way, right? Like you might hit a milestone of, Okay, I can cover the average month's rent in any American city at whatever, might be a million dollars, right? $40,000 a year. You can pretty much live wherever you want to live.

And then maybe you add another $200,000 to that and you realize, okay, now I can cover groceries for the rest of my life. I'll never have to worry for me and my family for the rest of our life. And you start hitting these milestones as you continue your journey and you realize that it's just buying you more and more freedom. And if you are flexible in your lifestyle, if you can adjust and say, okay, right now we're living in Hawaii and it's really expensive, but in a worst-case scenario, let's say I lost my job and we or I had some kind of disability and I couldn't work anymore, we can move to Utah where the cost of living is much lower.

We have family there and guess what? We're gonna be okay. We have a lot of savings. 

I think that's what a lot of people on the FI journey don't realize is that if you're the kind of person who can set aside, 25, 30, 50% of your paycheck and invest it in low-cost index funds, you are so far ahead of the rest of the American population.

You can do literally anything. You have so much freedom and flexibility when you have a big chunk set aside. Most people are living paycheck to paycheck and have zero savings. A lot of people are even worse off than that. They have debt. So if you are in a position where you can have enough control over your finances that you can save, and financial independence is one of your, one of your financial goals, I think what you'll realize is that even before you get to your FI number, you'll have so much freedom and flexibility that you can really dictate the terms of your life.

[00:20:50] Jamie: That's what I've learned over the years for sure. That's what I experienced. 

Spencer, let me break it down a little bit for, say a young E-3 or E-4, maybe they're hearing this and they're, how do I start? 

What are some goals that I could start out with? 

So I got some ideas that just maybe get the ball rolling mentally, let's say young, E-3, E-4 type.

It might take you maybe 5 to 10 months, but it should probably be less than a year to do that. And one way to do that, one idea for you might be maybe $100 or $200 a month, which is only 25 or $50 a week if you want to break it down that far. So that might mean eating at the DFAC a little bit more instead of Burger King. 

A Chipotle burrito's $12,  plus chips and guac, you can't go to Chipotle and not get chips and guac, so then Chipotle is basically a $20 meal every time you go now. So maybe skipping Chipotle once a week, if you go multiple times, those little changes, that little change once a week is going to make a big difference for you once a week, and then that can set you up.

But you have to invest the difference that you're not spending. So as Jeremy Schneider from Personal Finance Club says, spend less than you earn and invest the difference. You have to put the money to work. It's not just about cutting out a bunch of stuff from your life. Now, if you're more of an NCO or maybe a senior NCO, you might be able to hit $1,000 in maybe four months or less, maybe $250 a month of savings.

And if you have a working spouse, you could probably do it in even less. Then for the young officers out there, you could probably put $1,000 away with your first paycheck or two within a couple of months. Especially if you're coming out of the Service Academy or an ROTC scholarship with no student loan debt, you might be able to get it out of your very first paycheck.

If you're a more senior CGO or FGO. You could probably do it like right now if you wanted to just decide to save $1,000, if you haven't done that yet, you might just be spending so much money that you just pause some of your, I don't know, frivolous is probably a strong word, but some of your lifestyle choices that are not necessarily necessary expenses, you just pause them and then you have $1,000 saved like that.

So those are some ideas to get you going if you need a little practical tip for your first $1,000,

[00:23:00] Spencer: Yeah. So now that you have your first $1,000 saved, how are you gonna build the next thousand? There are lots of options out there, but if you're intending to build the money into your emergency fund, then I would recommend cash in a checking or savings account, or a cash equivalent, like a certificate of deposit, CD, or money market funds.

At the time of this recording, CD rates are over 4%. This is in 2023. Navy Federal Credit Union, NFCU offered a 5% 18-month CD just a few months ago. And some bank accounts, just straight savings accounts are paying over 4%, and investing your savings is gonna help you to get to your next savings goal that much faster.

Jamie, what about getting to the next milestone, let's say $10,000? Does anything really change between $1,000 and $10,000?

[00:23:46] Jamie: It's not really that much different, I think, but mentally, just knowing that there are more savings there if you have a big PCS coming up this summer maybe, and the reimbursement is delayed. It's just more peace of mind, but it can start funding other savings goals if it's not needed.

So maybe you're reevaluating and saying, I don't actually need this much money, but I had the new tires pop up and you can do that, or your Christmas presents or next year's vacation. So the habit of keeping your expenses aligned with your values, increasing your income, and saving the difference is essential to getting you to your first $10,000.

Once you've got the first $1,000 under your belt, it's a good time while you're waiting for your $10,000 to build up, to continue learning about money and continuing your education, and getting ready to start investing in a more automatic and systemic fashion. Thankfully, those of us in the military, have the TSP, the Thrift Savings Plan, and you don't know what else to do.

The Life Cycle retirement funds in the TSP are an easy way to get started, and you'll probably be fine from an asset allocation perspective if you just do that. After that, it's just a matter of time until you get from 10,000 to $100,000, and those same habits that got you there will get you to the $100,000 mark as well.

The only real change is that you'll probably want to start investing in your IRA and your spouse's IRA, if applicable, Roth IRA probably at first, and your Roth TSP account. As you build up that money and as you work towards maximizing those amounts or maxing out those contribution limits each year on an annual basis, then the first a hundred thousand will come even quicker.

[00:25:23] Spencer: Lots of talk today, Jamie, about habit building. I just wanted to give a shout-out to two resources. One is I've been reading that one for probably over a decade now, I think almost maybe 20 years. I think I started reading it in high school or college. And then the book, Atomic Habits by James Clear.

I got that one on Audible with my free audible credit from my Amex Platinum card and that one was just a great summary of why we build habits and how to build good habits. And in personal finance, a lot of what we do is habit-driven and small habits compounded over long periods of time equals results.

[00:26:05] Jamie: Hey Spencer, before we close, I just want to say one thing. If any of the listeners are feeling overwhelmed by this, like, “I just can't even think about saving right now because I'm worried about inflation. We're paycheck to paycheck. We feel so behind. Anything about money is stressful”. Or maybe you have an airman or a soldier, a troop that works for you, who is in that boat.

Get them help and there are some good resources out there between Military One Source and the Military Family Readiness Center. The fleet center. Each of your bases or your posts is going to have some free resources that will have someone, like an accredited financial counselor that can sit down with your troop or with you and your family and go over a budget and some spending habits, some things like that to help get you going in the right direction.

So if you're feeling overwhelmed by this conversation just know you don't have to do it alone. Contact your first sergeant or your supervisor and they can help get you in touch with the resources to get you pointed in the right direction.

[00:27:02] Spencer: Hey, podcast listener. If you found this episode valuable, the easiest way you can say thank you is by leaving us a five-star review on Spotify, Apple, or wherever you listen.

Thanks for all the great reviews we received so far. As of this recording, 87,000 downloads. We're pretty stoked. We're narrowing in on 100,000 downloads of the podcast, which is pretty crazy. Jamie, I don't really consider myself a podcaster, and yet here we are with almost a hundred thousand downloads of our podcast.

Hey, if you have any questions or feedback, message us on Instagram@MilitaryMoneyManual, or for those of you that still use email We'll catch you in the next episode of the Military Money Manual Podcast.

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