April 26, 2016, by Rachelle Wilber – Transitioning from military living to civilian life can be a daunting task for some military personnel who are leaving the military to return to living life as a civilian. One of the key areas that many discharged veterans deal with is the inability to effectively manage their finances. For most military personnel, they have enjoyed a reduced cost of living based on available on-post living accommodations, or housing allowances for their families. They have also grown accustom to a steady flow of income that they can depend on. It will be immensely important for recently discharged military personnel to immediately develop a financial strategy to ensure their financial security for the short and long term.
Develop a Budget
The first step to creating a viable financial strategy to ensure that the family finances will be properly managed is to develop a budget that will determine how the money will be spent on a weekly or monthly basis. When developing a budget, it will be important to determine necessary expenses, such as mortgage or rent, car payments, utilities, etc. Once the expenses are determined, it will be easier to determine how much money can be reserved for savings and investing. With most banks you can even order checks online through a third-party provider. If at all possible, a minimum of 20 percent of the monthly income should be allocated to some type of interest bearing savings account, or a low risk investment mechanism. The primary purpose of a budget is to establish a specific strategy for spending, saving and investing. It will allow short-term and long-term projections to be made to the progressive growth of the family’s net worth. A part of managing finances, will also include securing a good, inexpensive checking account, through which spending can be managed. Many banks are responding to the highly competitive banking market by offering a number of cost-effective banking features, including free check cards, online banking, and direct deposit.
Secure Some Form of Health Insurance
While veterans have access to health care services through the Veterans Administration, the care received at some facilities may be substandard to the treatment that can be received in the private sector. Medical care can be exceptionally expensive, making it necessary to minimize out-of-pocket costs by securing medical insurance. The best time to sign up for insurance is during an open enrollment period, in which there are little to no restrictions associated with acceptance. Fortunately, most insurance companies have exceptions to their open enrollment periods, meaning that people who have lost their jobs, changed jobs, gained a dependent, experienced the death of a spouse, etc., can secure insurance under the rules of open enrollment, even if the open enrollment period has expired. There are multitudinous medical insurance plans that are designed to meet the specific needs of families and individuals; it will be important for former military personnel to sit down with an agent to determine which plan is best for their particular situation.
Use Money Management Software
There are a number of money management programs, including Microsoft Money, Quick Books, Quicken, Checksoft and more. Using a money management software program, will allow former military personnel to have all of their financial information in one place, ensuring that they will be able to have a better handle on the complete financial picture. Money management software can perform a number of automated functions, such as pay bills, update deposit and withdrawal information, send alerts on certain designated activities, as well as a number of other functions and activities. This type of software is one of the best ways to simplify the money management process.
While it will be more efficient to automate as much of the financial process as possible, there is no substitute for direct, diligent monitoring. Constantly monitoring the financial process for the family will make it easier to make any necessary adjustments.
Bio: Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter: @RachelleWilber