APRIL 6, 2022 – You served your country and are planning for honorable discharge. You could re-enlist, but your time has been well spent and it’s now time to start a new chapter. In addition to get acclimated with civilian life, you also need to think about a job. If you served less than 20 years, you probably won’t receive a pension. That means you need to find a way to support yourself. While some previous service members find work easily, others have trouble finding a new job. To make the process just a little easier, we created a guide to help you get your finances in order after you leave the military.
Rethink Your Budget
If you lived on base, you probably didn’t have to worry about paying rent or utilities. You may have eaten for free as well. Once you’re a civilian, all that changes. You now need to figure out a budget to cover all of your expenses. The first step is to figure out housing, if you don’t already own a home. Look for places that are within your budget and are close to employment opportunities. This will reduce commute time and how much you pay for gas. You also need to eliminate any high-interest debt you have. If you’ve been using a credit card with a high interest rate, you might not be able to afford it when you’re no longer on active duty.
Consider Investing
You should also think about investing prior to your discharge. There are several ways to go about it. If you’ve been saving money and are looking to earn passive income, you could invest in rental homes or buy shares of rental properties. When it comes to investing in real estate vs stocks, the choice is up to you. Some people prefer the long-term stability of rentals over the often-turbulent stock market.
Use Your TSP Account
When you leave the military, you’ll be given the option to cash out your thrift saving plan or roll it over into a traditional IRA. It’s important to note that unless you’re near retirement age, you may be penalized for early withdraw.
Open a Savings Account
While you should already have a savings account, it’s also okay to start now. Stash away as much money as you can without having to sacrifice comfort. If you still have several months left before your discharge, you can use this time to stockpile as much cash as possible.
Use the GI Bill
If you think continued education can help you get hired for a new job, make the most of the resources the GI bill has to offer. You can receive financial help to cover your tuition, books and even housing. You’re allowed to sign while you’re still active duty and are also eligible for up to three years of help afterwards. How much you’ll receive depends on how long you’ve served. If you serve three years or more, you may receive up to $2050 per month. For those serve less than three years, you’ll be put on a sliding scale.