The Financial Transition from Military to Civilian

by Katherine Pilnick

The transition from military to civilian life is one of the most difficult changes with which you will have to deal. Your entire life and regiment will change, whether you’re retiring, entering the civilian workforce for the first time or planning on earning your degree. No matter your next step in life, your finances will undergo a major overhaul. Consider these changes and prepare accordingly.

Before You Leave the Military

While you’re still in the military, start thinking about how you’ll make ends meet as a civilian. No matter where you go next, it’s wise to have at least some money saved up.

If you’re retiring, make sure you have enough money in the bank to last the rest of your life. Remember that any pension you receive won’t cover all expenses. When done properly, retirement saving and planning can take decades.

If you plan to go to college after duty, you’ll be eligible for several education benefits through the military. Such benefits are meant to ease the financial burden rather than take care of the bill completely. Again, save up some money to last you through college. If you don’t think you have enough saved up, you might want to consider looking for a part-time job while you’re in school.

Or if you decide to enter the workforce, know that this itself can pose financial challenges. When possible, begin looking for work and sending out applications before you leave the military. This can help cut down the amount of time between military and work.  It’s important to create a fund and save up some money for the first few months you’re out of the service. calls this a transition fund and recommends you make it large enough to last nine to 12 months. Use this money to cover expenses while you search for a job. Consolidating your finances can also help simplify the transition. 

 Changing Expenses

Along with your lifestyle, some of your expenses will also change. While in the military, you may receive benefits like a housing allowance on top of your salary. Once you leave, you’ll have to cover this type of expense on your own.  You may also need to pay for items like health insurance if your new job doesn’t include it.

Keep these new expenses in mind while you are creating a savings fund and make sure you have enough money to cover everything. It’s a good idea to consult a financial specialist to help you plan your budget and expenses if you are unsure of anything.

Getting a Job

If your goal is to get a job and start a career right out of the military, talk to friends and family members about what to expect. Brush up on interview skills and be prepared to talk about your time in the service. If you’re offered a job, remember that salaries are negotiable. Think realistically about how much you need to earn to cover expenses and make sure your salary is enough.

Katherine Pilnick writes and blogs about personal financial well-being and issues that influence it for, America’s Debt Help Organization.

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