Financial readiness for a military transition isn’t the most fun thing to spend time thinking about, but like it or not, it’s one that you have to consider. So have you saved enough money to survive the transition period? Is there more to it than just saving money?  For many, the question is, “How much should you keep in a ‘rainy-day’ fund?”  But is there more to the question?

How Money Should You Save?

There are a great many recommendations on this ‘rainy-day’ fund.  According to the Bureau of Labor Statistics (BLS), an acceptable measure of three to six months worth of expenses may no longer apply. Ryan Guiana, author from The Military Wallet, suggests shaping your emergency fund to equal three to six months of your monthly expenditures, not your salary. Further, your dollars need to be in short-term savings; not locked up in a retirement account – as you will want to avoid tax-related implications of early withdrawal.

Financial Readiness Translates to More Options

If you are financially ready for your upcoming transition, you will have greater flexibility and more employment choices. You will have the ability to participate in training, relocation, and other opportunities will provide long lasting effects on your life. If you are unprepared financially, you limit your ability to respond to opportunities and put yourself and your family at economic risk due to employment gaps or other emergencies.

Why is financial readiness important to you? As a transitioning veteran, there are two fundamental reasons. The first is financial flexibility and the ability to navigate toward a preferred career path that maximizes lifetime earnings; versus taking the first job available. The second is to maximize your wealth, reduce any setbacks, and avoid financial hardships.

Many Options are Waiting for You on the Other Side

Realizing personal and professional opportunities beyond the military, including education, employment, entrepreneurship, volunteerism, additional public service, and travel reflect your personal financial preparation. Nearly half of veterans surveyed, state they had experienced financial challenges during their transition.

Develop and pursue the goal of financial flexibility as soon as possible. Further, consider saving beyond emergency savings to allow greater flexibility during transition. There are multiple strategies when financially preparing for transition. First, saving money is tried and true method. Planning for your education and training is another. Treat your educational choices as a commodity – just like your savings, study closely the return on investment (ROI) for your educational choices. Use online tools and resources to assist with this endeavor.

Use All of Your Resources Carefully

Education and training assist in your transition by exposing you to capabilities, resources, and opportunities you missed because of time spent during military service. You are entering the workforce armed with robust educational benefits that enable both your hiring and advancement. Do not forget to analyze the implications of your spouse’s employment status about your educational benefits such as the Post-9/11 GI Bill for scholarship or credentialing opportunities.

Study the benefits available to you – before, during, and after your transition. Analyze the cost, time, and your personal responsibilities to receive each benefit. Make sure to leverage free or low-cost training programs to receive industry-recognized certifications and familiarize yourself with resources.

Locations and Organizations That Focus on Veterans

Another great capability often overlook are the Veteran and Military Service Organizations. These great outfits are full of concerned veterans that have come before you. They can provide invaluable information and access to free or low-cost programming. Also make sure to talk with other veterans about their financial barriers encountered during transition and how they overcame them. And when you’re considering where to live, look for which state fits your personal preference, as well as, which one offers the most veteran benefits.

Employment Considerations: Long Term vs. Short Term Game

When considering employment options, think about long term financial prospects versus short term income gains. Know full well your income will probably be reduced on occasion due to unemployment or underemployment, especially if you go the contractor route. Here are a few questions to ponder:

  • Do you understand how total compensation will impact your quality of life?
  • Have you given thought to what your must have salary will be?
  • Are there some benefits you cannot live without, like health care?
  • Is your work location near your interview site? Is it a long commute?  Will you need to relocate?
  • Will you be able to align your educational opportunities, geographic location, and meaningful employment to maximize your financial readiness during transition?
  • Are you pursuing opportunities to maximize lifetime earnings over short-term gains?

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Jay Hicks is an author, instructor and consultant. With a special kinship for military personnel, Jay provides guidance on successful civilian career transition and has co-authored “The Transitioning Military Series”. He is the co-founder of Gr8Transitions4U, where advocating the value of hiring military personnel is the key focus. More about Jay and his passion can be found at