Financial Plan for Military Families Transitioning to Civilian Life

Helping You Financially Prepare for Everyday Expenses

Being in the military provides families benefits such as free healthcare, secure housing and employment. Unfortunately, you can’t take those perks with you when you leave.

Getting reacquainted with civilian life means finding a new job, getting a new home and figuring out what's the best health, auto and other insurance plans for you and your family’s needs. These tasks can be overwhelming (especially with the increase of housing, insurance and other costs) unless you create a financial roadmap to guide you. 

In this article, we’ll discuss the importance of creating a financial plan that covers the bases of these necessities as you transition back into civilian life.

When Should Start Your Financial Plan?

As soon as possible! 

At Fyvie Financial, we understand life can get in the way—however, the shift from military to civilian life can present some serious challenges when you aren’t prepared. It’s unfortunate but veterans can take a significant pay cut when they leave the service.

We suggest preparing your financial plan at least one year before you separate or retire from the military.

 Even better, once you know your ETS (expiration of time-in-service), it’s time to start planning to avoid financial burden. Your income will change once you leave, and it’s best to get the ball rolling on how you’ll manage your expenses.

What Should Your Financial Plan Include?

Your financial plan for transitioning back into civilian life should include the following:

●      Setting your financial short and long-term goals

○      Consider moving, housing, insurance and automobile expenses

○      Also think about retirement and estate planning

●      Creating your desired income and tracking your cash flow

○      This includes finding work and/or starting a business

○      You can work with a Financial Planner or accountant at this step to ensure you are making the most of your funds

○      It’s important to also open checking and savings accounts (especially for emergency funds), as well as retirement accounts such as a 401(k) or IRA

●      Paying off any high-interest debts and build your credit

●      Finding VA benefits and/or filing disability claims

○      The Transition Assistance Program and other programs for healthcare, education, housing and even caregiving may be available in your state

○      Get started on your disability claim if you need it as the process can take up to four months before you receive your first payment

Your financial plan should tackle the most important tasks first, such as affirming your financial SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals, as well as assigning them deadlines so you can organize your finances accordingly.

If you’re starting your plan a year out from your ETS, each step of your plan should look something like this:

●      12 months out: Begin your job search and look into your benefit options from your service’s Transition Assistance Program

●      9 months out: Apply for education programs and/or scholarships for any schools you want to attend.

●      6 months out: Meet with a Financial Planner, if you’d like, to review your financial plan, and help you with money management and investment options.

●      3 months out: Work on relocating your family by searching for housing and/or an automobile. Also look for health, dental, car, home, life and/or disability insurance for yourself or your spouse who is leaving the military.

●      1 month out: Review your service record for your final payout, follow up with job leads and get ready for moving expenses.