Making the Bonus Round

Uses for Your Reenlistment Bonus


The U.S Navy’s Leap Frog team performs a mid-air reenlistment ceremony as a Navy SEAL (bottom left) administers the oath of enlistment to a member of the team (bottom right). Source:

Getting a bonus can be a huge factor in whether or not someone reenlists in the military. With amounts ranging from $2,000 to upwards of $90,000 depending on rank, branch, and rating if in the Navy, Air Force Specialty Code, or Military Occupational Specialty if in the Army and Marine Corps, these bonuses provide you with a fantastic opportunity to do a few things.

The question is: what are the best options?

Paying off debt

If you lean toward the practical, paying down or off your debt would be the first thing to do. Why? Because paying off a $5,000 credit card with 12% interest could immediately save you nearly $2,000 in interest payments.

If you have a car payment, getting that knocked out would also be a good choice. But if you have some interest-free financing (like, say, at a furniture store) that can wait because it’s not costing you anything extra.

Keeping it

Having some money put aside for emergencies would offer peace of mind should your car need new brakes and rotors. Or you could make a huge deposit into a retirement account, where that money could spend a few decades earning interest and helping you enjoy your golden years. Either one would be a great option for that bonus.

Getting a new ride

Need a new car? A $20,000 bonus would help you get something reliable. Or you could use part of it as a down payment on a higher-end vehicle, or as the “cash due at signing” part of a lease. Regardless, having that chunk of change would make getting a car a lot easier. 

Some other big expense

If you need a couch (thanks to the dogs), some new carpet (thanks to the kids), or some new exterior paint and roof (thanks to time), your bonus could help, as it’d keep you from having to finance any (or even all) of them. 

Taking a vacation

Taking the spouse on a trip to Hawaii, the family to a place like Disneyworld, or yourself on a fly fishing trip to Alaska would all be really solid (and fun!) choices. Given the price of airfare and lodging (not to mention food and souvenirs), a bonus could go a long way to making one or even more of these trips a reality without destroying your budget.


Of course, depending on the size of the bonus, you could even do a mix of these—pay down the card, take a less-expensive trip, and get that new roof or furniture. Who know, you might even have enough left over to stash in savings.

No matter what you choose to do with your reenlistment bonus, remember that taxes will be taken out of it unless you receive it while serving in a combat zone. So don’t spend any of that money until you actually get it. Once you do, though, put it to good use—you’ll thank yourself later.

Mark Dye

About the author: Mark Dye

Mark Dye has been writing articles, recording podcasts, and putting together books on personal finance for nearly a decade. His work has been recognized by the American Bankers Association and the Institute for Financial Literacy, and received an 2011 APEX Grand Award for Writing. Follow Mark on Google+.

Contact: Mark Dye


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