According to a survey done by the National Foundation for Credit Counseling (NFCC), veterans have a higher chance of carrying over debt from month to month at 58% probability; as compared to 34% probability for civilians. The same survey report reveals that nearly an equal percentage of veterans at 55% claim that they feel that they are ill prepared for a financial emergency. This then begs for a question as to whether veterans are poor or uneducated; hence resulting to their poor financial management and preparedness for unforeseen financial obligations.
The answer to the above question is a definite no. When you do a comparison between the veterans and the civilians, there are no clear winners on the factors considered in the comparison. In most cases, it is highly likely that the veteran has completed high school and has acquired some form of college training. In some cases, the veterans will have also pursued an associate degree and have high education credentials than a civilian. The reason veterans are feeling more financial pain than the civilian can therefore not be associated with their education level. The real reason veterans lag behind on matters personal finance is due to the lack of financial literacy training when transitioning from military to civilian life.
Transition to civilian life
Just like any other changing process, transitioning from a veteran into a civilian is equally difficult and it requires a gradual process to be accomplished successfully. While in the military, the government used to manage your finances to give you peace of mind so as you concentrate on protecting the country. However, once you transition to being a civilian, you will need to take back the responsibility of managing your own finances.
As a new veteran, you will need to start learning how to save and invest your income, get new health insurance coverage, work on increasing your credit score, learn about new taxes as well as apply for new jobs to diversify your income sources. There are also new expenses that will crop into your life after leaving the military and you need to be prepared to handle them. Budgeting therefore becomes a very essential financial management tool when you are transitioning into civilian life.
Saving & investing
There are very many ways you can choose to save your money and invest it once you are in full control of your finances. The obvious first step is to have a fixed deposit account where you can be saving regularly on a monthly basis towards a certain goal; or for creating a financial buffer in case of financial emergencies. Besides savings, you can opt to invest in mutual funds and unit trusts or go right into investing in stocks and bonds through the capital markets. You will however need to learn more about these investment options before delving into them.
In this day and age where online trading is booming, you could opt to open an online trading account and make money through trading of forex, commodities or indices. All you will need is to make sure you are updated with the latest market news from SaxonTrade social media sites or other online sources of credible market trends and analyses. Having learnt how to trade and gathered enough market intelligence on your preferred investment assets, you are then able to maximize your returns in online trading and grow your wealth much faster. However, the risk of losing is equally high if you do not sharpen your trading skills through frequent trading.
Get new health insurance cover
Getting a health insurance cover should be a priority for all veterans transitioning into civilian life. Just like in combat, having stable health will determine your success in life as a civilian. You might be having injuries that you are not aware of; or healed injuries might start acting up. Being covered through health insurance will help you to have peace of mind to concentrate on creating wealth for your family; knowing that in case of any health threat you will receive quality healthcare that you deserve.
While you were in the military, you had much of what you needed and your credit score was not much of a bother. In addition, you received tax free house allowance among other benefits. However, now that you are transitioning into being a civilian, you will need to start cleaning up your credit score since you might need to get a mortgage or borrow to buy other assets such as a car. On the other hand, you will need to be braced for tough times ahead as a huge chunk of your incomes gets sliced off by taxes. This is your new reality, and you will need to adjust to it accordingly.
Finally, you will need to look for a new job in order to diversify your income sources and be able to save and invest enough to secure your financial future. The kind of job you choose will be based on your skills and in most cases your passion and interests. However, whatever job you choose to take, ensure that it helps you to earn enough money that you can budget for; and allocate to your monthly expenses, monthly savings and to your investment kitty comfortably.
Posted by Yanira Farray on 8:50 am, With 0 Reads, Filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.