There was a survey that tells 55% of veterans believe they are not prepared for financial emergencies. Here are five best moves that will help veterans in times of crisis.
Make sure to do these advise while you are in uniform:
1) Create a transition fund.
When you are accustomed to a stable source of income, you sometimes failed to keep or save a cash for emergencies. And more often, post-military job search would take longer than you think. You have to be prepared to cover five to nine months of living expenses to cover up from food to gas even mortgage and et cetera. I highly recommend to save at least 10% of each salary into a liquid accounts like high-yield savings account or a money-market fund. If you own a house, apply for a home equity line of credit that can be good as source of cash when there are emergencies. Remember it is easier to apply a house loan and et cetera when you’re still in service.
2) Clean your credit.
To have a credit score below 680 can affect your ability to get a low-rate loan. A credit history with overdue bills can also affect your job hunt. Some employers check your credit reports as part of their hiring process. Active duty military personnel and their wives can have copy of their FICO score.
3) Apply for a VA mortgage.
If you are planning to become a homeowner and you don’t have the usual 20% down payment, you can buy a house with a loan backed by the U.S. Department of Veterans Affairs. You’ll usually get a VA loan at a competitive rate about 4%, similar to other bank loans, even if your credit isn’t perfect, and closing costs are likely to be lower than what you’d pay on a conventional or FHA loan. If you’re disabled, the government will also waive its funding fee, usually 1% to 2% of the loan. Most VA benefits don’t kick in until you’ve left the service, but you can apply for a VA mortgage while still on active 180-day duty.
4) After separating, Make a budget.
The first civilian paycheck is often beyond different due to tax-free inclusions for active duty and nontaxed benefits, such as housing and moving allowances, service military members may earn up to 1/3 of their income tax free. Make sure to have a budget that would covers your expenses and loan even after retiring from military.
5) Buy life insurance.
Military service member on duty automatically enrolled in a group life insurance plan with a death benefits of up to $400,000 for uniformed personnel and $100,000 for spouses. You can convert that policy into a veterans group life insurance (VGLI) policy, which won’t require a physical. If you’re healthy, however, you may find that a nonmilitary policy is cheaper: A vet in his twenties would pay $32 a month for $400,000 in coverage. Meanwhile, for the same coverage a 25-year-old, nonsmoking male veteran from Texas with “preferred plus” health would pay $18 to $20 a month for a 20-year term policy.