Army National Guard Capt. Jordan M. Thompson found himself in a familiar position on his last deployment: that of listening to his troops’ financial shortcomings. Budgeting, he was reminded, was a common shortfall.
“Most service members may have had a 30-minute class in basic on things like TSPs (Thrift Savings Plans), but the military needs to do a better job of educating soldiers about the overall financial side of things,” said Thompson, a financial planner in civilian life. “The effort is there, but they’re not quite hitting the mark.”
But in the transition back to civilian life, budgeting doesn’t have to be scary. Read on for tried-and-true ways to make finances work for you while exiting the service:
- Learn and plan early — don’t wait until folding your uniform for the final time to learn how to craft and stick to a budget. Take advantage of on-base or virtual courses on budgeting, or ask a financial mentor to show you the first steps. More than anything, don’t procrastinate.
- Recognize your new expenses — military members don’t usually have to worry about things like medical care and housing. But separated military, Thompson said, are usually “on their own” for almost everything. You might even lose your military discount in places like private schools or certain businesses. It doesn’t have to be intimidating, however. As soon as you determine your civilian income — even if it’s temporary while you find a new job — set aside adequate portions for necessities like off- base shelter, food and short-term health insurance. Don’t forget about new-to-you expenses like clothing appropriate for your civilian job, sales tax at off-base stores or non-Child Development Centers child care prices.
- Assign every dollar a job — “Everybody is in different circumstances, but if you allocate your money before you actually spend it, you’ll end up saving more in the long run,” Thompson said. This means making a list of incoming funds and outgoing expenses before paying a single bill. It can be as simple as making two columns on a piece of paper, adding the total of each and comparing the resulting numbers.
- Start building an emergency savings fund now — Thompson said the general rule is three months of all expenses (cell phone, car payment, groceries, rent, etc.) for a single person, and six months for a family. “Building an emergency fund is an ‘and’ discussion, not an ‘or’ discussion,” he said. “Although having an emergency fund is a ‘first-thing’ sort of financial strategy, you can also look at other defensive strategies, like purchasing life insurance, while you’re building it up.”
- Get comfortable with telling yourself “no” — patience is a virtue, including money matters. When you’re on a stretched-thin budget, Thompson said, denying yourself in the short-term will ultimately pay off. “You might be spending money on energy drinks every week, but that’s not a necessity,” he said. “You’ve got to learn the art of delayed gratification.”
- Make a “fun” budget category — Being smart with your money as you transition into a veteran doesn’t have to be all dull. Thompson recommends having a “fun money” category in every budget, even if it’s miniscule. So go out for a drink with your buddies once or twice a month — as long as it’s already built into your budget.
- Always ask — a small, delightful way to stretch your budget is by finding unexpected discounts and perks in the marketplace. You might be surprised at who offers what to former military. Though some businesses reserve their discounts for those still active in service, the worst someone can tell you is “no.”
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MAXIMIZING BUDGET AFTER THE MILITARY
Use these resources and discounts to save some serious cash:
- GovX.com: this San Diego- based website offers deals on travel, merchandise, tickets and more for veterans while supporting military-connected nonprofits.
- VetTix.org: More than 13 million tickets to concerts, sporting events and other major occasions have been gifted to military families through this organization.
- VA Home Loans: Home ownership is in reach for veterans with this no-money- down home loan program.
- ID.me: Verify your veteran status almost instantly and securely while finding deals and special military-related discounts at thousands of stores and brands.
- Cell phone plans for veterans:
- Companies like AT&T, Verizon and T-Mobile all offer deep discounts for veterans. Plus, they often come with extras, like a Netflix subscription. And don’t be afraid to check for new rates and discounts each year.
- Cable & internet plans for veterans: Check with major internet providers like Xfinity and Verizon for deep discounts and extras for those who have served.
- Flights: Airlines like United and American Airlines offer discounts and special perks for service members, including veterans.
This article was originally published in the 2022 Veterans Financial Readiness Toolkit.