FINANCIAL MANAGEMENT AND STRESS
You may wonder why this chapter is titled
Financial Management and Stress Management, or
why financial management and stress management are
covered in the same chapter. Although there are many
causes of stress, one primary cause of stress in families
is not having enough money to meet needs. This cause
of stress can result in spouse and child abuse, which is
not acceptable behavior. All commands have a Family
Advocacy Program (FAP) to help families undergoing
Many commands provide financial counselors to
advise Sailors in financial difficulties. Family service
centers or your leading petty officer (LPO) are some
examples of who you can seek for financial counseling.
The Naval Military Personnel Manual section 62 offers
some good advice to all paygrades.
MILITARY PAY SYSTEM
Learning Objectives: When you finish this chapter,
you will be able to
Identify the various types of military pay, the
Leave and Earnings Statement, and the method
used to deposit military pay.
Recognize the responsibilities of making sure
that pay and earnings statements are correct.
Identify liberty and leave and recognize their
The military pay system affects you directly. The
amount you receive every payday is determined by the
military pay system. Therefore, you should have a basic
understanding of the difference between pay and
allowances and the different types of pay and
allowances. You should also understand a little about
allotments and government insurance.
In this section, you will learn about the basics of the
military pay system. The pay system is very complex
and pay and allowances are subject to change. If you
need specific information about your pay, you should
consult your disbursing office.
Pay is money paid to you for services rendered. All
pay is taxable as income. The Navy has three types of
1. Basic pay
2. Incentive pay
3. Special pay
You may receive all three types of pay if you are
qualified, or you may receive only basic pay.
Navy personnel paychecks are deposited
automatically into their checking or savings account via
the Direct Deposit System (DDS). To get paid, you must
open up a savings or checking account.
Basic pay is the pay you receive based upon your
paygrade and your length of service. All people on
active duty in the Navy receive basic pay.
Navy personnel receive longevity (length of
service) raises after 2, 3, and 4 years of service. After
that, they generally receive a longevity raise for every 2
years of service. Personnel in paygrades E-1 and E-2
dont receive longevity raises. An E-3 doesnt receive
longevity raises after 4 years of service. Length of
service for pay purposes includes active-duty and
inactive Reserve time, former service (if you have a
broken-service enlistment), and service in other
branches of the U.S. armed forces.
The policy of the Navy is to promote habits of thrift and encourage
financial affairs in such a manner as to reflect credit upon the naval services." As a
Navy sailor it is your responsibility to seek out financial information to avoid any