Military members serve their country with honor and duty. Often signing up right out of high school or during college, they sometimes need some extra help navigating the civilian world upon retiring from duty.
If you are serving—or have served—in the military, you may need some ideas on preparing for the future, especially in terms of your finances.
Here are four ways you can set yourself up for a successful future during and after your service in the military:
1. Don’t Let Fear Overwhelm You
If you have served in the military for several years, the idea of leaving and living a civilian life may feel strange and frightening. It doesn’t help that veterans are often warned of hardships. Fellow veteran H.V. MacArthur recommends that you “don’t believe the hype” since doing so tends to lead to anxiety, especially when taking on a new job. In a Forbes article, she says to remember that starting a civilian career path is like anything else you have learned in your military training and experience. Take a deep breath and focus on the tasks set before you. Sure, there will be speed bumps and roadblocks, but there will also be helping hands.
2. Start Saving Money
Starting a savings account is as important for military personnel as it is for civilians. You work hard for your money from the U.S. government, so do your best not to take it for granted. The sooner you start saving money before leaving the military, the easier your transition will likely be. By doing so, you may not need to start the job hunting process right away, giving you a chance to rest, breathe and decide what you want to do — whether that means moving to a new city, investing in a special training program, or simply waiting for the right job opportunity to open up. Try to start saving a significant amount each paycheck at least six months to a year before leaving your post.
3. Cushion Your Finances
Even with a solid savings account, a credit card is a handy tool, especially if it comes with customer benefits. USAA, for examples, offers reward and cash-back credit cards that include features such as:
- No annual benefits
- No penalty APR
- Travel and purchase benefits
- Cardholders receive 1.5% cashback
The company offers various cards, including the Military Affiliate Visa Signature and American Express cards. You can earn 5% back on your first $3,000 in combined military base and gas station purchases yearly. Reward and cashback programs allow you to make money while spending money, which offers a bit of a cushion to your overall budget.
4. Learn About Any Tax Changes
One tough reality associated with civilian life is a bigger tax bill. As a service member, you receive various tax benefits, such as tax-exempt basic allowance for housing. Prepare to adjust your budget and lifestyle to accommodate a bigger tax fee each year for the first few years until you adjust to the change. Of course, your taxes will depend a lot on where you live and how much you make, but it’s an important piece of the puzzle to consider when transitioning back into the civilian workforce. A free online tool such as SmartAsset can help you calculate your federal income tax depending on your household income, location and filing status.
A Whole New Phase of Life
With good planning and drawing on the best resources, transitioning from military to civilian life should run smoothly. Preparing for any tax changes, saving money and preparing for a civilian job are important and achievable steps toward a successful future. Good luck!
