6 Budgeting Tips for Veterans
Military families, whether by individuals on active duty or veterans, face various financial challenges. Although these challenges are unique, these problems are still wealth-building and budgeting problems at their core.
Veterans and Money Problems
According to the New York Times, although veterans are more likely to have a 3-month savings fund, veterans have more credit issues than other consumers. The Times goes on to say that military service members have “worse spending habits than comparable individuals” due to the uncommon nature of their jobs.
Service members and veterans are often moved and deployed on short notice as part of the job. Frequent deployments, often at inopportune times, results in less than ideal financial and mortgage decisions, extra costs and financial strain.
Develop Good Budgeting Habits
While the government has set several measures in place to help our servicemen (ex. online personal loans for veterans and similar programs), these alone are not enough. If you’re a veteran or a military serviceman planning to retire, think of the long haul. As early as now, it’s necessary to develop good budgeting habits for better success in financial sustainability in the future.
1. Take a moment to review your budget.
Income changes post-deployment and this will definitely impact your budget. Take a moment to reassess your budget and ensure the details of your earnings are correct. Review your bills and expenses against your income for a clear picture of your budget moving forward.
2. Track your spending.
One of the most important things in budgeting is knowing where your money went. Track down your spending to the last penny so you can identify essential and non-essential expenses (or needs vs. wants) and cut down your spending accordingly.
Whether using a simple spreadsheet or taking it to another level by using budgeting apps, tracking your money can help you in achieving your wealth-building goals. Here are a few free budgeting apps to help you track your cash flow:
● Mint
● EveryDollar
● Clarity Money
● Goodbudget
● Personal Capital
3. Stick to your budget.
It’s easy to make a budget. However, the challenge is sticking to it. One way to make sure you’ll stick to a budget is by tracking all your expenses (#2). You may also find these tips helpful:
a. Spend within your means and your budget
b. Be aware of needs vs wants
c. Leave your credit card when going out to refrain from spending beyond your budget
d. Make your meals from scratch as much as possible; refrain from eating out
e. Ditch the latte and the bar; make your drinks at home
f. If you need to buy something, always try to look for discounts, vouchers or offers to help you save
g. Stop being wasteful
h. Avoid taking loans (like online personal loans for veterans) if you don’t need them OR without first counting the cost
4. Pay off debt as early as you can.
Financial experts (like the famous Dave Ramsey) recommend paying off your debt first before building your wealth. This also applies to you as a veteran; if you’ve accrued credit card debt or mortgage through the years, don’t let them get out of hand. Deal with debt with urgency to avoid accumulating late fees and other interests on top of your debt.
Dave Ramsey recommends the snowball method, which entails tackling your debt from the lowest to the highest. The snowball allows you to pay off your debt starting from the smallest, working your way through the highest debt you have.
However, if you still feel incapable of snowballing your debt, at least make sure to pay the minimum monthly repayment to cushion the interest blow. Also, try to put bonuses or any extra income into paying debt so you can pay it off sooner. Remember, the less debt you have, the more you’re able to put money towards savings, investments or retirement.
5. Make savings a non-negotiable.
Regardless of your financial shape, make sure to set aside a portion of your budget for savings. We recommend putting your savings first when making a budget (not last), regardless of your budget for savings. You can do this manually or you can also set-up automatic payments to your savings account.
In the previous points, we’ve talked about reviewing your budget and cutting down “wants” to free a portion of your budget. As you cut down non-essential expenditures, you can use the extra money for savings.
6. Don’t be afraid to ask for help.
This new phase can be confusing and it’s easy to get overwhelmed with it all. But know that you’re not alone—there are thousands (or maybe millions) of veterans like you that are struggling to get their finances right.
If you feel that this is beyond you, don’t be afraid to seek help. There are many institutions focused on helping the military, from debt relief and wealth management to securing a good financial future after retirement. Chances are, there are organizations like these in your area, but in case they aren’t, you can always seek online help.
Remember, it is possible to avoid financial problems when leaving the military and there are steps you can take as early as now to ensure a bright financial future.