The Importance of Financial Literacy for Veterans

female soldier with American flag in the background

According to a recent survey by the National Foundation for Credit Counseling (NFCC), veterans are almost twice as likely to have debt carried over from month to month (58%) than civilians (just 34%). Nearly the same percentage of veterans (55%) believe they are ill-prepared for a financial emergency. Is this because veterans are poor and/or uneducated? No.

When comparing civilian pay to military pay, there isn’t a clear winner in all comparisons. And veterans are actually more likely to have completed high school and are more likely to have completed some college or obtained an associate’s degree than civilians.

So what is missing? Why are veterans feeling more financial pain than civilians? It’s because of a lack of financial literacy, which should be considered “need to know” for anyone returning home from service. The following article will help you get things on the right track.

Adjusting to Civilian Life

Man transitioning out of military in both civilian clothing and a military uniform
If you’re a veteran adjusting to civilian life, it can be difficult. In relation to finances, the government has made most financial decisions for you. This makes sense because you have needed to concentrate on protecting our freedom. But now is the time to manage your own finances.

New veterans must get new health insurance coverage, increase their credit score (in many cases), learn about new taxes, apply for civilian jobs and, if they so choose, create a post-military budget. There are many more expenses in civilian life. But don’t let any of this get you down. After all, less educated and less disciplined civilians do this stuff every day.

Securing Health Insurance

Protecting your health is essential. If you’re leaving service after 20 or more years, you’ll qualify for a decent level of government healthcare. But most tenured veterans still get supplemental insurance.

If you’re retiring with less than 20 years under your belt, you’ll need to make getting healthcare coverage a priority. Aim to get a job that will cover you, or get coverage through a spouse’s plan. If you don’t get a job right away, consider signing up for the Continued Health Care Benefit Program. This will give you 18 months of coverage while in-between jobs.

It’s especially important for veterans to be covered with health insurance. Injuries could act up, or you may have an injury you aren’t even aware of yet. It’s best to get insured as a civilian ASAP.

Increasing Your Credit Score

You may not have worried about a credit score while in the military, and who could blame you? But now that you’re a veteran, a credit score will be extremely useful. After all, you’ll probably want to buy a home soon, or you may need a loan for some other purpose, and a higher credit score will help you secure better terms.

There’s a rumor that you must carry a balance on a credit card in order to improve your score. That’s false. Instead, consider getting one or two credit cards and paying your balance in full each month. Your score will get a boost from this, all else equal. For starters, aim for a credit score in the mid-700’s. That should get you the lowest interest rate on a mortgage, though you can (and should) keep improving your score.

A credit score is the closest thing we have to a financial report card. If your credit score is high, chances are you’re doing the right things with money. It’s also motivating to watch a score climb.

Respecting Taxes

Civilian salaries usually look phenomenal – until you realize much of that money goes to pay taxes. This is a wake up call since you’ve been receiving a tax-free housing allowance and you may have not been paying any state income tax while you were on active duty. Use this military-to-civilian pay calculator to see how your pay will differ now.

Applying for New Jobs

Man on job interview has a list of the top 35 employers looking to hire military veterns. These are companies like Amazon, General Electric and USAA. Keep in mind many military veterans become government contractors. A lot of money can be made by going that route.

Some other good resources include:


Creating a Post-Military Budget

Most people think budgets are boring. That’s fine. You don’t necessarily have to create a physical budget. But you do need to keep a few spending categories in mind as a veteran:

Health Care: primary care, dental care, specialty care, medications, medical devices, etc.
Housing: mortgage, rent, property taxes, HOA dues, repairs, utilities
Food: gummy bears, sour patch kids, steak – anything but MRE’s
Entertainment: games, eating out, spontaneous giving, vacations, Netflix, etc.
Vehicles: (you’ll likely do a lot more driving)
Emergency Fund
Civilian Clothing
Insurance: renter’s insurance, homeowner’s insurance, life insurance, disability insurance, long-term care insurance, etc.
Education: anything not covered by the military

Also, consider one of the many online budgeting tools available to help you stay organized. We love this one.

Defending Yourself

The stats about financial literacy among veterans are out there. and they’re bleak. Many have made poor decisions due to both a lack of literacy and an abundance of predatory lenders. But for you, those stats can be motivating. You can use them as motivation to rise above all the companies that are out to get you. Be on alert for predatory lenders; they are everywhere. It’s important to stay away from them at all costs. Those companies rope you into a cycle of debt which is nearly impossible to escape.

Taking Action

We’ve covered a lot of the basics you’ll need to know as you pursue a stable financial situation stateside. The most important thing is to be proactive and to seek expert advice and help if you don’t know the answer to a question or the potential consequences of a financial decision. we can help, through our Reconnect program, or we encourage you to take advantage of the resources mentioned in this article. Good luck as you adjust to life as a civilian. If you made it through the military, you can make it through just about anything.

Will Lipovsky is a webmaster and personal finance freelance writer. His most embarrassing moment was telling a Microsoft Executive, "I'll just Google it." You can read more about Will at

This post was first published by Clearpoint. To speak with a Clearpoint Credit Counselor, call 888.808.7285 or learn more about their Military Reconnect Program.

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