When transitioning from the military it's important to understand all aspects of your finances to ensure that you are able to provide for your family and meet all of your financial obligations that you may be carrying over with you. There is a difference between what you take home in the military and what you will take home in the civilian sector. In the military there are portions of your income that are not taxed while in the civilian sector most everything is taxed. This typically becomes a big shock to Veterans who don't realize or understand how significant the tax break is that comes through the housing and food allowances.
There are some steps you should take when building your financial plan:
Step 1 - If you have not already done so document all expenses that you incur on a Monthly, Quarterly and Annual basis. Include in these expenses your daily living costs for food, transportation, entertainment etc.
Step 2 - Determine what your savings goals are for cash on hand, retirement and education (if applicable). These are just as important as any debt you have incurred to plan for putting aside.
Step 3 - Determine what geographical location you intend to live in. From this determine what the average cost for a house or rental is based on your needs, understand what the average salary is for that area for the industry you plan to work in, and any other locality based costs that may be relevant.
Step 4 - Once you have determined all of this information (Debt, Savings and anticipated Income) put them all together in a cohesive monthly budget and see how it flushes out based on actual numbers and in relation to what your expectations are.
Step 5 - Make any adjustments necessary to bring your financial plan in line with the income you anticipate being able to realistically make. You may need to contact a financial advisor or use an online financial tool to determine estimates on tax bracket for Federal/State/Local and average premiums for the various benefits you may receive.
Step 6 - Set some milestones to adjust your living to this financial plan and execute with passion as this is your future!
Your financial goals should be both near term and long term. Having goals and actions that will set you up for financial independence is key to living a fulfilling life. Be sure not to develop a plan based on keeping up with the Jones's or having all those things you always wished you could afford. In time this will all be possible with the right planning and execution. I would highly encourage you to estimate costs and income conservatively so that you don't have a plan that is not executable.
Landmark Life Coaching's Mission is to honorably and respectfully serve courageous groundbreakers and transitioning veterans to persevere in defining and executing their future by providing an atmosphere of comradery and trust that honors their dedication and commitment. This will empower our clients to feel whole, honored, respected and fulfilled in defining and living their life purpose.
Veteran's Coach/Speaker/Writer Dwayne.paro@landmarklifecoaching.com