Financial tips, tricks to prepare for life after the military
KADENA AIR BASE, Japan -- With the force reshaping guidance released in Dec. 2013, many Airmen are facing difficult decisions, such as meeting the retention board or separating from the service.
Due to the high demand of voluntary and involuntary separations, there are resources available to help Airmen during financial uncertainty.
"Members separating have to go through pre-separation counseling and they also have to go through the Transition Assistance Program," said Charles Howard, 18th Force Support Squadron Airman and Family Services Flight community readiness consultant. TAP provides many resources to service members such as financial readiness training.
Howard stressed the importance of a spending plan and budgeting to identify what is most important to focus on first.
"It's vital that service members and their families do a spending plan, identify all their monies, identify their debt, how much the debt is and how quickly they can take the extra money they have from the spending plan to put it toward their debt," Howard said.
Howard added members should pay themselves first and breakdown their finances in percentages.
"The breakdown says that members should save 10 percent of their net income, 70 percent will go toward their living expenses and 20 percent will go toward their debt," Howard said. "Before you start saving and investing you should be debt free."
1st Lt. Andrew Webb, 18th Comptroller Squadron Financial Services Flight commander, added emergency savings and being disciplined about savings are also important, regardless of the financial situation.
"I can't express enough the importance of having emergency savings," said 1st Lt. Andrew Webb, 18th Comptroller Squadron Financial Services Flight commander. "Save three to six months, but I think it kind of depends on the person, the situation. The bigger the emergency savings the more options you have, the more choices you can make."
An example is allowing a budget for daily living such as groceries. Setting it aside and only using that money for what it's meant to be used on allows the user to monitor their spending.
"You have to budget, you have to know where every dollar goes," Webb said. "Make it a priority. There are going to be some hard choices, everyone likes to eat out but that's probably one area everyone can cut money out. You have to trim the fat, the expensive activities that are costing you. If you don't have an emergency plan and you don't have anything to fall back on, it can get pretty scary."
Webb added that setting a goal, staying disciplined and making it achievable are ways Airmen can stay prepared during financial uncertainty.
For more information, contact the financial advisor at 634-3366 or visit the Airman and Family Readiness center for help setting up a financial spending plan.