When it comes to military veterans transitioning to civilian life, statistics aren’t so encouraging. According to a study conducted by the National Foundation for Credit Counseling (NFCC), it was revealed that a whopping 58% of vets carry debt over from month to month. By comparison, civilians are at around 34%. Also, 55% of veterans feel that they are not well prepared in the event of a financial emergency.
To make matters worse, veterans who report having relatively minor financial problems, such as going over their credit limit or bouncing a check, are four times more likely to become homeless in the next year than veterans without such problems.
So what’s the issue, exactly? A lack of education can’t really be the culprit since the average of military vets who have completed high school or an associate’s degree is higher than that of civilians. The actual reason here is a lack of financial literacy, which is an absolute must for anyone returning home from service. Below are several steps that every vet should take to keep their finances on track.
As a serviceman or woman, you’ve been receiving a tax-free housing allowance. You also may not have been paying any state income tax while on active duty. But once you transition to civilian life, things are a bit different. While civilian salaries may look great on the surface, many veterans don’t realize just how much of it will go into taxes. You should use this military pay calculator to see the difference.
Taking care of your health should be a top priority, particularly if you have less than 20 years of tenure. Your injuries may start to act up, or you may have a health issue that you may not be aware of yet. In any case, you should secure health insurance ASAP. You should look to get a job that will cover you. But if this isn’t possible right away, try getting coverage through your spouse’s plan. Another option is to sign up for the Continued Health Care Benefit Program, which will give you 18 months of coverage.
Improve Your Credit Score
As a civilian, your credit score will have a tremendous impact. A good score will help you get a mortgage, a new loan, a car, etc., and all at better terms than otherwise. A minimum score in the mid-700’s, for instance, will allow you the lowest interest rates on a mortgage. By getting one or two credit cards, paying the balance in full every month, and never coming close to the limit will help you increase your score.
Keeping a Budget
Being financially literate means that you know how to manage your money. To do so, you’ll have to create a budget and stick to it. As a veteran, you’ll need to keep track of some spending categories such as:
- Health Care – primary care, dental care, medication, vision, etc.
- Housing – mortgage, rent, repairs, utilities, property taxes, HOA fees, etc.
- Transportation – car loan, car insurance, repairs, gas, maintenance, etc.
- Insurance – homeowner’s insurance, renter’s insurance, life insurance, disability insurance, etc.
- Education – anything not covered by the military.
- Emergency Fund – putting money aside every month is a critical aspect of every budget.
Last, but not least, veterans should stay away from predatory lenders. They will drag you in an almost inescapable cycle of debt that will keep you below the poverty line.
Invest in Your Education
Investing in your betterment and education is yet another critical aspect of financial literacy. When choosing a career path, Information Technology (IT) is among the best alternatives. As one of the fastest-growing sectors, landing a well-paying job will be far easier than almost anywhere else.
With MyComputerCareer, you will be well on your way to landing a job in IT We will also help you during your job-seeking process. Contact us today and find out more about what MyComputerCareer can do for you.