Keeping Your Finances Strong in the Military and Beyond
Here at American Heritage Credit Union, we’re grateful for all that our servicemen and women do for our country every day.
If you’re a member of the armed forces, the military lifestyle and return to civilian life can come with unique financial needs, and some valuable opportunities. Here are a few tips that can support your financial wellbeing in the military and beyond.
Set a Smart Budget
Setting a budget is the best way to make sure you’re keeping your spending and saving on track. This monthly spending plan outlines how much money you need to cover fixed costs like rent, variable expenses like utilities and groceries, as well as the cash you need for fun splurges.
The discipline you developed while serving your country can be applied directly to your spending, saving, and budgeting strategies. You know how to keep things in line and in order. Use this to your advantage!
Create a budget that works for your financial situation. This can help you avoid overspending and add more money to your savings each month. If you have extraneous expenses or subscriptions that you’re not using, cancel them to increase your monthly savings.
Keep in mind that your income and living expenses will change over time. So should your budget.
Keep Your Money Close
Staying on top of your finances is always easier if you can review account activity quickly. If you’re searching for a place to open a checking account, look for a credit union that offers plenty of online and mobile banking tools, so your finances are always at your fingertips – no matter where you may be.
Whether you’re at home, on-base, or deployed overseas, you’ll always know where your money is going, how much is in your account, and what payments are pending so you can plan accordingly.
When you’re deployed or away from home, it can be easy to lose track of time-sensitive tasks like paying bills. Rather than leaving things to chance, set up autopay for your regular bills and frequently review your checking and credit card statements for unexpected charges.
Emergencies can happen at any time and you need to be financially ready for them when they pop up. The simplest way to prepare is to start saving money each month in a savings account earmarked for emergencies. It’s a good idea to have the equivalent of three to six months’ living expenses set aside for emergency expenses.
The sooner you can start saving, the better. Contribute whatever you can to your savings each month. This might mean setting aside a set amount from your paycheck each month or adding cash gifts you receive throughout the year. You can also get creative with your savings plan. For example, if you take advantage of military discounts, put the amount you saved directly in your savings account. Even small amounts can really add up over time.
Once your emergency fund is squared away, keep stashing away funds for other long-term goals, like vacations, a new car, or the down payment on your first home.
Consider Going Back to School
Investing in education is one of the best ways to boost your long-term earning potential. Your military service may qualify you for financial assistance through the GI Bill. Your GI Bill benefits can cover the cost of tuition, books, and associated expenses for some types of vocational training, undergraduate and graduate programs, and certification tests.
That said, the GI Bill may not cover your total expenses, especially if you attend a private college or university. Federal or private student loans may help with the difference.
Take Advantage of Military Benefits – From Healthcare to Homebuying
The well-deserved benefits of your military service don’t all end when you hang up your uniform, so make sure you’re taking advantage of the benefits you’re entitled to after you’re discharged. The Department of Veterans Affairs provides access to quality primary and specialty healthcare to qualified veterans.
That’s not all. You may also be able to take advantage of the VA loan program, which offers very attractive mortgage terms to qualifying homebuyers, including a down payment as low as 0%. VA home loans – offered through approved lenders like American Heritage – tend to have lower interest rates than many conventional mortgages and they include flexible options for both purchasing a new home or refinancing your original loan.
Though buying a house is a sound investment in your future, it’s not something you should rush into. Make sure you’re financially ready and that buying a house is in your best interest before you start shopping around.
Don’t Neglect Retirement Planning
If you’re planning on making a career in the military, you’ll be able to draw on your pension after 20 years of service. However, that pension amount may not be enough to help you maintain the lifestyle you’re used to. You’ll want to invest in your retirement on your own.
No matter where you are in your career, it’s not too early or late to start saving for retirement. If you’re still enlisted, you may be eligible to open an account through the Thrift Savings Plan.
If you’ve already left the military, a traditional or Roth IRA from your financial institution can provide a flexible way to make personal contributions to your retirement nest egg and enjoy tax-deferred growth.
We’re Grateful for All You Do
At American Heritage, we’re thankful for our many members and neighbors who have served in the military, and we’re here to support all your financial needs. We welcome you to learn more about key financial topics through our free financial education platform, AmericanHeritageU.