Time spent in service can affect veterans both physically and emotionally, making it tough to find a job that suits their lifestyle. Furthermore, those that rely on credit cards and high-interest loans during their time of unemployment can experience added stress and worry about getting into a helpless financial situation.
In fact, 80% of military and veteran families carry debt, and over 50% have less than $500 or no money at all saved for emergencies. This makes looking for a job feel even harder, but some of the stress can be taken away by following these tips for managing debt.
Plan a budget to suit your finances
It may sound simple, but drawing up a budget based on one’s bank account can make a huge difference to a veteran’s financial situation while looking for a job. Budgets can be calculated by reviewing their current bank balance, money coming in, money coming out, and typical monthly spending. Next, veterans should make a note of all their debts, who they owe, and for how much.
This provides a raw summary of the financial situation they have to work with. A budget can then be created by categorizing typical spending into what is essential – such as food, living expenses, and transport. Then, what is non-essential – such as coffee, hobbies, and luxuries. Review the non-essential expenses and consider limiting them to help free up some funds. The money saved by avoiding non-essential expenses should then be used to build a $1,000 emergency fund.
Strategize your debt repayments
Veterans burdened with debt don’t have to feel so overwhelmed with their various repayments. The stress can be minimized by following a strategy that suits them. For those that are struggling with excessive debt worry, it may be a good idea to follow a strategy that prioritizes paying off debts that are giving them the most anxiety. For those currently struggling with limited funds, it may be most effective to pay off the smallest debts first and build up to the larger ones. Lastly, for effective long-term wealth, the best strategy is to first pay off the debts with the highest interest rates.
Check eligibility for military benefits
The military provides certain tools to veterans that may help with writing off bad debt. Veterans should make sure they know about all of the programs available to them, such as the Military Lending Act. This program is designed to ensure veterans benefit from more affordable lending, providing lower interest caps and stopping lenders accessing their bank accounts. The SCRA (Servicemember Civil Relief Act) freezes interest rates on the debt created before enlistment to 6%. Veterans can also receive aid with college loans using the College Loan Repayment Program and the Public Service Loan Forgiveness Program. And of course, there are VA benefits that shouldn’t be overlooked. With the help of a military lawyer, veterans can collect the benefits they earned during their services in a matter of weeks.
Nonprofit debt management services
Veterans also have access to free help using the VA’s debt services for debt management, credit counseling, and financial advice. They can also receive professional help with their job hunt, locating a great career with reliable pay in the public sector. These services, along with the other options discussed in this article make paying off veteran debt feel more realistic. It is incredibly common for veterans to find themselves in debt, but millions of other veterans have managed their debt successfully and ended up in the clear.