No one ever joined the military as a path to getting rich, but if you are a veteran, you do have a few financial benefits that civilians don’t. Perhaps chief among those is the pension you receive if you stay in the service long enough, making a career in the military, but you don’t have to stick around for decades to benefit from others, such as the GI Bill or access to certain discounts. All the same, managing your money can be a challenge. Below are a few of the more common mistakes.
Not Controlling Your Spending
This is not just about making sure that you’re not spending a lot of money on eating out or electronics or whatever it is that you’re into. It’s about looking at all of your expenses and considering whether you can lower them. Are you paying too much rent? What about your car payments? If you are paying off student loans, you may be able to lower that payment as well. Find out whether you can refinance student loans with NaviRefi. You could also look at whether you can lower your utilities or any other expenses.
Not Having a Retirement Account
Even if you were in the military long enough to draw a pension, it’s a good idea to have a retirement account as well. If you don’t have a pension, it is even more important. There are several different options, including the Thrift Savings Plan, which is for people in the military along with government employees. Private employers may offer a plan as well. The right one for you will vary depending on your circumstances. You should consider whether you would prefer to contribute money pre-tax and pay taxes on withdrawal or a fund you contribute to after-tax that you can make tax-free withdrawals from when you retire. Consider as well how much risk tolerance you have in terms of your investment portfolio.
Not Having an Emergency Fund
Even careful spenders can find themselves in debt if an emergency comes up. While it can be hard to save money as a family it is important as you never know when you might need a car repair or get a tooth infection that insurance doesn’t cover. The equivalent of a few months of expenses in your emergency fund can help prevent this. However, when you first start saving, even just having a few hundred dollars available can make a big difference.
Not Ensuring Your Family’s Security
If you have children, you may want to consider purchasing a life insurance policy. Think about how much it will cost to support them until they are no longer minors as well as anything else you would want to pay for, such as the cost of college, to determine how much coverage you need. You should also create an estate plan. At a minimum, you need a will that specifies what you want to happen to your assets. Your will can also name a guardian for your minor children. An attorney can help you prepare your will and any other necessary documents.