Do you know what the trouble is with saving money for transition expenses? The trouble is that no service member wakes up burning to save money for something they don't really want -- transition expenses.
Because when we say "transition expenses," we are not talking about fun things like new business clothes and a civilian house with a swimming pool. What we really mean by "transition expenses" are the mortgage note, the cell-phone payment, the gas tank fill-up, the electric bill and the demand for endless diapers and/or Cheetos, etc., that all go unpaid when we are unemployed.
Unemployment Happens to Other People
As Military.com's transition master coach, I never met a service member who believed that they would be one of the unemployed. This is why I love them so. Most military are pretty sure they will have a job lined up before they leave the military, even though the statistics say 75% of service members leave the military without a civilian job.
In fact, on average, veterans experience 20 weeks (five months!) of unemployment after their military service, according to Pew Research. That is why the experts are always telling us that service members need to save from three to 12 months of living expenses before transitioning from the military.
So how do you put that transition savings together, even when you don't want to believe you will need it? I reached out to get advice for you from the military money community.
13 Ways to Get More Money for Your Military Transition
1. Build a raft, not a bridge.
Instead of freaking yourself out with the idea that you must have an entire financial bridge built toward your transition, think of it instead as lashing together a raft. Transition is a temporary expense. (Find out more tips on how to lash together your transition raft in our FREE Transition Master Class: Fistful of Dollars.)
2. Put on your reality goggles.
"If you are coming up to the end of your [military] contract, start saving -- even if you are not sure whether you will stay in or not," said Spencer Reese, author of “The Military Money Manual.” Reese, a former Air Force pilot, told me he saved 50% of his paycheck in the months prior to his separation.
3. Hide money from yourself.
If you have more than a year to start saving, an app might be the way to trick yourself into moving forward. "The biggest thing for most people is to remove the human from the loop," Reese said. "Take the requirement to make a decision away from yourself." Reese suggests using an app like Digit or Stash that links to your bank account in order to start saving an amount of money you won't miss. "Most people spend what they can see," Reese said. "This slows down your spending as the balance diminishes."
4. "Marie Kondo" your stuff.
"When I got out, I had a lot of stuff from different duty stations," said Reese. "Paddleboards from Hawaii. Bikes from Florida. A weight set. An elliptical. I Marie Kondo-ed it all and sold it on eBay." Facebook Marketplace and Etsy are also good places to unload what you are not going to need in your civilian life.
5. Grow out of your clothes.
While you are taking inventory of your closet, look at your clothing as well -- especially when it comes to high end, nearly new or collectable clothing as well as those items that still have the tags on because they never really fit. I've bought and sold clothes on Poshmark, thredUP, Tradesy and The RealReal. When you are building a transition raft, every dollar counts.
6. Ward off lifestyle creep.
JJ Montanaro, my favorite financial planner from USAA, told me that one of the problems with getting out of the service is "lifestyle creep." We all get the idea that we should be living better right away, which usually translates into a larger house -- the biggest expense most transitioning service members have. Even though it might seem like a hassle, renting first before buying might be the better option.
7. Make passionate "money love" to your saver.
"Rapid financial independence is easier with a strong partner," noted Reese. If you are the spender in your relationship and struggling to save for transition, let your partner lead you. "Let them set the budget for the next six months."
8. Toy with staying in the military.
If the economy has you worried or you are really strapped for cash, consider staying in the military. "It's not worth gutting it out if you hate it," said David Pere, a former Marine and author of "The No B.S. Guide to Military Life." "If you don't hate it, you end up completely taken care of if you are good with your finances. You can be maximizing TSP [Thrift Savings Plan] contributions, buying real estate, making it work."
9. Join the reserves.
If you don't want to stay or can't stay in the military, think about the financial benefits of joining the reserves. "I think the reserves are a phenomenal option," said Pere. He points to the advantages of keeping Tricare and transferring the GI Bill to your kids. It might also ease some of your financial worries during the first part of your transition.
10. Take on a side hustle.
Depending on your personal situation and deployment schedule, you might temporarily take on a side hustle until you earn a certain dollar figure for your transition raft. "The most popular and easiest ones are driving for Uber, Lyft, Rideshare or Instacart. Also, if you are interested in investing in real estate, you learn your way around." said Pere. "But also think of side hustles like Airbnb or renting out a room in your house."
11. Indulge in pet love.
If you are a family of pet lovers with a fenced backyard, think of signing up with a pet sitting/dog walking service like Rover. It might be inconvenient, but it is one way a family can contribute, too.
12. Remote jobs for the spouse
Is your spouse already working at a job they don't really like? Are they talking about how they would like to get a remote job? A lot of spouses think they need to wait to get their next job until the service member is fully employed and settled in the civilian world. Yet waiting might not be as necessary as you think. "Look at all the changes with COVID," Montanaro said. "Now there are a lot more remote work opportunities than there were before."
13. Last chance at spouse employment programs
Talking about spouses, it is important to note that there are more employment programs and certification programs available to active-duty spouses than to veteran spouses. Getting training now for a job later is an investment in the future, too.
Thinking about a period of unemployment after military service makes everyone a little anxious. Self-reliance and paying your own way is such an essential part of military culture that it is hard to wrap your head around the idea of a few weeks without a job, much less a few months. Putting together a dedicated transition savings fund can make a real difference to the way you sleep at night. And if you are one of the lucky few who don't need that income, just think of all the lovely Cheetos you can buy.
Jacey Eckhart is Military.com's transition master coach. She is a certified professional career coach and military sociologist who helps military members get their first civilian job by offering career-level Master Classes through our Veteran Employment Project and on her website SeniorMilitaryTransition.com. Reach her at Jacey.Eckhart@Monster.com.
Learn More About the Veteran Employment Project
To get more tips on how to make a successful military transition, sign up for one of our FREE Military Transition Master Classes today. You can view previous classes in our video library. Questions for Jacey? Visit our Facebook page.