By: Kaylah Jackson
The initial transition out of the military is often stressful in a variety of ways. It might be the first time in a while you don’t have a consistent pay cycle or a familiar environment of people to feel comfortable around. You might be moving to a new city and are acquiring bills you didn’t have to worry about. Planning is crucial when thinking about personal finance. We reached out to Ryan Guina, founder of The Military Wallet,an Air Force veteran and current National Guardsmen to give us some helpful advice for managing your money after having Uncle Sam do it for you.
Reduce your debt as much as possible.
While you have a few months left on your contract, start inching away at the debt that you have. You want those payments as low as you can get them. So if it’s a credit card or student loans, try tackling those now before newer bills and fixed expenses set it. You will most likely be looking for a new place to live and maybe even a new car, handling these important things will be less of a burden without added monthly debt payments.
Create a “Cash Cushion”
Life happens but you never want to be down to your last few cents. It’s important to start putting away several months worth of living expenses ahead of time. Factor in the the cost of living in the new city you might be moving to. Is rent more expensive in certain areas? If you’re coming from active duty they will help with moving to your next location but think about items like initial costs. Setting up utilities like cable and electric can become costly for that first month’s installment of rent. Take into account small fees too so you wont be surprised when you sign for a new lease or looking to purchase a home.
Have a Rainy Day Fund
An emergency fund is cash you set aside that you don’t plan to use unless its a serious emergency. Now regular maintenance on a car you’ve had for a few years is not an emergency, but a flat tire is. Try to aim for $1,000 to $1.500 for an emergency fund. If you’re overseas think about how much it would cost to fly home in at a moments notice. The important thing to remember about this fund is not to squander it away on a shopping trip or pizza night, chances are you might need to come back to it in the long run.
Live within your means
You don’t lock yourself in long term payments that you wont be able to handle once you have a civilian job. As a single individual with no family, sure you might not think the payment for a 2018 Dodge Charger or Ram truck will hit your pockets hard, but when the truth is you have no idea what you will be making once you get out. Assume the life the amount you’ll be receiving after the military could be a lot less than what you had on active duty. Living within your means is the mantra you should abide by.
Budgeting is an operation–plan for it
Nothing happens in the military without a plan. Think of your personal finances in the same way. Keep an itemized list of all of your monthly expenses: from rent and car payments to smaller electric or phone bills. Also, add a rough estimate of what you spend on groceries every month and incidentals like entertainment and eating out at restaurants. This will ensure when you start getting the paycheck from that new civilian job, you can allocate accordingly
“It was hard for me on a pycological standpoint more than anything because I missed being apart of that community