Sixty-five percent of military families have experienced financial stress, according to a finance and lifestyle survey by Military.com. This statistic is no surprise as they often face frequent deployments, high moving expenses, cost-of-living adjustments, and inconsistent pay. Here are some quick financial planning tips for all our veterans.
If you are part of a military family, there are some steps you can take to protect your finances and future. In honor of Military Family Month, here are several financial planning tips to consider:
Build an Emergency Fund
While an emergency fund is essential for everyone, it’s particularly crucial for military families who go through many life changes. It can give you the peace of mind of knowing you have the financial resources to cover unexpected expenses and overcome stressful times. Ideally, a fully-funded emergency fund is six to nine months of expenses in an easily accessible account.
Ensure you Have Enough Life Insurance
Military families often have access to life insurance through the government, but the death benefit amount often is not sufficient. Work with your financial professional to estimate the amount of coverage appropriate to your financial situation. Military spouses and partners also need coverage in case of early death, leaving the military partner to provide financially for children impacting their career.
Contribute to a Thrift Savings Plan
As a military family, you have access to a Thrift Savings Plan (TSP). It’s a good idea to take advantage your TSP as it’s the most affordable retirement savings plan on the market. With a TSP, you may choose from both traditional pre-tax retirement and Roth IRA retirement savings accounts.
Budgeting for a Single-Income Household
The reality is that frequent moves are a part of military life and can make it a challenge for spouses to establish and maintain stable careers. For this reason, consider budgeting on a single income. Even if your spouse does bring in additional revenue, your family will be prepared if their employment status changes. The Military Spouse Employment Partnership program can help military spouses pursue a career path despite their unique circumstances.
Understand the Servicemembers Civil Relief Act (SCRA)
The Servicemembers Civil Relief Act (SCRA) offers unique financial benefits for service members. This perk includes a 6% interest cap on loans you took out before active duty. You can apply for this benefit through the lender. The SCRA also provides other perks such as deferred income tax and the right to cancel a residential lease, auto lease, or phone service.
Consult Your Financial Professional
Together we can review your financial situation and determine the ideal life financial plan for your unique situation. Contact us today to get started.
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