Written by Guest | Last Updated March 20th, 2020Our goal here at BestCompany.com is to provide you with the honest, reliable information you need to find companies you can trust.
Guest Post by Brittany Benassi
In life, having a plan is important. For example, you wouldn't go on a long vacation to a far away destination without research and a basic itinerary to follow. The same rules apply to financial planning. While every individual and family might have different needs depending on their lifestyle, a plan incorporates your unique factors and helps layout your financial journey.
Military members are no exception to this rule — they tend to go through many stages and transitions over the course of their careers. While some are common life milestones, like getting married, buying a house and having children, others are unique to military lifestyle such as frequently relocating, deploying overseas, and transitioning out of the service. Creating a financial plan that takes into account the unique aspects of military family life can help families make better decisions. Whether you are new to military life or a seasoned service member or military spouse, here are a few steps to help you take control of your financial future with a strong plan:
Perform a budget check
Step one in the financial planning process should always be a thorough assessment of your current financial situation. It's hard to plan for the future and establish goals without understanding where you stand in the present! Get familiar with your budget: what recurring expenses do you have (i.e., rent/mortgage, utility payments, grocery bills) and how does this match up to your take home pay? It's not unusual for expenses to vary on a monthly basis, but overall your spending should remain consistent.
Additionally, check on your savings. If you don't have a rainy day or emergency fund that you frequently contribute to, it might be a good idea to start. You never know when an unexpected expense (home/car repair, medical bill, etc.) might pop up, so it's good to be prepared. Once you know what you're typically spending and saving each month, you can identify what additional funds might be available for investing and planning for your future.
Define your goals and anticipate possible needs
Everyone has hopes and dreams for their career and family, and some might be loftier than others. Take time to identify these goals. If you’re married, sit with your spouse and discuss what your personal, career and family goals are. Write them all down, even the big, long-term ones. This may seem silly or unnecessary, but it really helps to achieve your goals if you write them down. Once you’ve identified some concrete targets, it’s easier to create a timeline and plan for achieving them based on your situation and budget.
On the flip side, you also need to plan for unexpected or undesired events. While we never want these to happen, it’s important to think realistically about additional expenses that can pop up and how to plan for them. Think beyond the traditional emergency fund expenses mentioned earlier. Is there a history of chronic illness in your family that might require you or your spouse to enlist the help of long-term care? These services can be expensive, and you don’t want to be caught off guard years down the road.
Similarly, what are your insurance needs? Service members are typically covered under the military’s SGLI plan, but depending on your family’s specific situation, you might want to add additional coverage from a third-party provider for yourself or your spouse. Coverage for spouses is a smart option, particularly if they handle many of the household duties while the service member is deployed. Also take into account market activity and how it might impact your investments and savings.Reach out to a financial planner who can help you understand the right amount of life insurance, the appropriate investment strategy, and review the potential risks involved.
Tap into your tools and resources
With clearly-defined goals and an understanding of your current finances, it’s easy to identify where you might need help to bridge the gap to complete financial readiness. This is where military-friendly financial advisors and organizations that cater specifically to service members and veterans come in handy. Not only will they think of things you might not consider, they have a deep understanding of military career paths and the financial challenges that come along with it and will be prepared to follow you on your career and life journey.
Additionally, the military offers many financial literacy resources to help service men and women and their spouses learn more about how to best manage their money. Don’t be afraid to inquire about training courses from your supervisor or local spouse group, if you live on-base. And don’t forget the internet. There are countless free resource sites available that provide military families with a crash course in a variety of financial topics. These are often a great place to start if you’re unsure.
For some service members, managing personal finances can seem scarier than deployments and relocations. However, if you take the time to assess your goals and familiarize yourself with the resources at your disposal, you’ll find that creating a solid financial plan isn’t as daunting as you think.
Brittany Benassi is the VP of Financial Planning and Certified Financial Planner® at AAFMAA Wealth Management & Trust