4 Important Financial Tips For New Veterans
by Guest Author - Kelli Brewer on Feb 11, 2021
If you’ve been recently discharged from the armed forces — or are about to be discharged — you’re intimately aware that civilian life is vastly different from military life. The transition you’re facing is a major change in just about all aspects of your life and will have a dramatic impact on your finances. The choices and actions you take during this time can make things harder or set you up for success
The following tips can help you get your civilian life off to a strong financial start.
1. Take Advantage of Education and Career Perks
While you’ve been serving and protecting your country, your peers and classmates have been going to school and learning their way around the metaphorical career ladder. Don’t worry, though, as there are many resources available to new veterans to help level the playing field. The Department of Veterans Affairs, for example, has several programs designed to help you find and land your dream career. Zety notes there are also many private career resources to assist veterans with the job search process, too.
If your dream job requires you to get additional education, there are benefits to help with that as well. The best-known is the Montgomery GI Bill, but the VA also offers the Post-9/11 GI Bill for veterans who served at least 90 days of active duty on or after Sept. 11, 2001.
2. Capitalize on Your Existing Skills
You probably developed some pretty amazing life skills during your time in the military, such as leadership, integrity, adaptability, and responsibility, not to mention those problem-solving and communication skills. All those capabilities can translate nicely into a polished resume, but you can also consider putting those key entrepreneurial abilities to use by starting your own business. Now could be the perfect time to turn one of your big ideas into a rewarding career!
If you go this route, it’s worth looking into forming a limited liability corporation. An LLC can be a good way to protect yourself and your shifting financial situation while you get your business up and running. If you’re working from home, you’ll have a home office deduction to consider, too. Take all the necessary steps for business formation and tax setup, which is easily facilitated through a formation service. Once established, a financial advisor can help you with setting up your accounts for moving forward with confidence.
3. Create an Emergency Fund
Veterans, like civilians in the U.S., are less prepared today than in past generations to weather a financial emergency. Per Military.com, 55% of veterans say they could not survive a monetary crisis. This is especially problematic given that veterans are also at a higher risk than their civilian counterparts of being in a car accident, developing substance dependency issues, and suffering from PTSD and other mental health problems.
Without an emergency fund, a car accident or health issue could be financially devastating. Experts recommend setting a savings goal, then setting up an automatic transfer into your savings account each pay period until you reach your goal.
4. Develop a Budget
Many veterans get an unpleasant surprise when they receive their first civilian paychecks: Many of the taxes and expenses that are commonly deducted from civilian pay aren’t deducted from active-duty pay. This means that if you get a civilian job making the same amount as you made in the military, your take-home pay will likely be dramatically less.
To make things worse, there are many expenses in the civilian world that you never had to think about in the military, for example, the higher price of groceries, or hidden costs like security deposits. Fortunately, there are many budgeting tools available that take the guesswork out of setting and sticking to a budget. Take advantage of these tools so you can stretch your new take-home pay as far as possible.
The transition to civilian life can be difficult, but you’re never alone. There are lots of resources along the way to help you meet this challenge with flying colors.