Managing money isn’t a new concept. It’s just more important to do it properly when going through big life changes, especially during a time of global uncertainty. Aside from finding a job, I think managing your finances as you leave the military is probably the second most important thing to square away. This is even more true if you’re bringing family members along for the ride, but a solid plan will put you on the right footing to be ready for whatever comes next.
Cash is King
Once you make the decision to leave the military, you should start an aggressive savings plan. Leaving the military is already a journey of uncertainty without a global pandemic in the mix. You’ll want to make triple-sure that you have money in the bank. Having cash on hand for the unexpected will put you in a better position to handle what may come, so start saving while you have a guaranteed paycheck from the military. Worse-case scenario, you have a nice nest egg tucked away for a rainy day. Trust me, even after you’ve successfully transitioned from the military, Murphy’s Law can still pop up and that nest egg could come in handy.
Another part of your financial planning should be debt management. If you have debt, you need to develop a plan to handle it, meaning maintain your commitment to pay, even as you transition. In my opinion, you don’t have to be completely debt free before you leave the military. If you have a plan to make sure your debts are paid, you should be fine. If you’re facing hardships with debt payments, you may qualify for various COVID-19 relief programs offered by debt collectors. If you’re debt free now or will be before your final out date, this will only enhance your financial standing and may allow you to tuck away even more money into savings.
There are some good discussions about finances during TAP, but everyone’s financial situation is different. If you’re having a hard time nailing down a solid financial plan, get some help. It’s perfectly fine if you need additional assistance with developing and executing a financial plan. In this case, Google is your friend because there are so many sources of information about financial competency online, including podcasts and videos. You’re bound to find something that works for you. If you want to take it a step further, make an appointment with a financial advisor to get more personalized support.