With every transition comes a new opportunity to set goals, develop plans, and assess where you are at. If you’ve recently been discharged from the military and are evaluating what comes next, it is a perfect time to look at your finances and plan for the future. A solid financial plan will set you up for years of success and prepare you and your loved ones for emergencies.
Whatever your income source, a good rule of thumb is to save 10 to 20 percent of each paycheck you receive. However, if that feels overwhelming or unattainable, then find a percentage that feels right and start consistently saving that amount. Regardless, it’s important to form the habit of saving money for a rainy day.
Building savings may mean you need to cut expenses, so take an aggressive look at where you are spending money by keeping a written record and receipts. To start planning for short-term and long-term emergencies — particularly interruptions in a steady income — you might have to cut back on food expenses, entertainment, monthly subscriptions, or vacations.
Obtaining Insurance Coverage
One certainty we have in life is that we never know what will happen next or when our time will come. So, to help save your loved ones the financial hardship that comes with a sudden loss, get the following two types of insurance:
- Life Insurance — With little to no planning, an unexpected death could leave those who are dependent on you in a tough spot. Term life insurance will save your family from worry by providing them with 10 or more years of your income in the event of your death.
- Burial Insurance — The average cost of a funeral is $9,000. If you die from an incident unrelated to the military, the VA will pay anywhere between $300 and $780 for funeral costs. To prevent your loved ones from having to worry during their time of mourning, plan ahead by making your wishes known and securing burial insurance to help cover the costs.
Finding a New Career
When it comes to being successful as an everyday citizen, a career that helps support your family is at the top of the list. Of course, it would also be nice to find something you enjoy. Based on your background and education, you may find a natural transition in the civilian world. Many veterans choose fields like engineering, healthcare, IT support, and law enforcement, for example.
Of course, some veterans would rather venture out on their own as entrepreneurs than work for someone else. If it’s maximum flexibility and limitless income potential you’re looking for, this may be the ideal career path. The good news is that there are lots of loans, grants, and funding options to help veteran-owned businesses succeed. Just make sure you follow all the formal steps to create your business, starting with setting up a Connecticut LLC that protects your assets, gives you flexible tax options, and remains flexible as you grow.
Investing in Your Future
We never know what the future may hold, but with longer life spans and more potential for a higher quality of life, you should plan to live your best and longest life. If you didn’t invest in a thrift savings plan while you were in active duty, you can start saving now. If your employer offers a 401k and matches, you should contribute up to the amount they will match. Otherwise, consider either a traditional IRA or Roth IRA to benefit from tax savings and save for retirement.
Military personnel are some of the most highly trained and skilled employees in the world. If you find yourself in need of more education, whether for new employment or personal desires, there are many grants available to veterans that can help pay for schooling and subsidize living costs. Many also qualify for the GI Bill and other educational benefits to help cover tuition.
Real estate is always a good investment. If you can buy a house with cash and no mortgage, then that is the way to go. However, if like most Americans you need a little help, then you should consider a VA home loan either directly through the VA or through a private lender, which will afford you better terms than the average private mortgage.
The sooner you can establish a financial plan for yourself, the better of you will be. Use tried and true methods like saving, obtaining life and burial insurance, and investing. Simultaneously, use veterans perks like the GI Bill and VA loans. Having plans in place for you and your family will afford you peace of mind and reassure you that you have a secure path to follow.
Remember, you don’t have to navigate your post-military life on your own. For assistance, contact The American Legion Department of Connecticut at 860.436.9986 or firstname.lastname@example.org.