Pro tips Q&A with military money expert Lacey Langford
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Updated: September 3, 2020 Lacey Langford, aka the Military Money Expert, eats, sleeps and breathes military life. She grew up in a military family, joined the Air Force, and is a military wife as well as an accredited financial counselor. She helps military service members and their families prepare for the financial challenges veterans face transitioning to civilian life. She spoke with Easy Money about the biggest financial mistakes veterans make and how they can live financially happier lives.
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This interview has been lightly edited for style and clarity.
People in the military receive some financial perks for serving, but often they aren't fully appreciated until you leave the military, and they're no longer there. Financial benefits, like allowances for housing and food or tax-free income during deployments, help service members' monthly and yearly budget. Those financial benefits that increase your annual income in the military aren't available when you leave. Medical coverage is a huge financial perk that people aren't prepared to pay for after the military. If you don't retire from the military, you will be paying for medical care after the military.
Employment struggles are something else veterans face. Changing career paths is difficult for anyone, but switching from a military job to doing that same job in the civilian sector can have its challenges. For example, you may perform aircraft maintenance in the military, but to perform that same job as a civilian, you will need a license. Sometimes veterans don't prepare for those career transitions, causing them to earn less than they made on active duty.
Start preparing at least two years before leaving the military. Try to get your expenses low and build up your savings. Figure out the minimum salary you need to make to pay your bills and save each month. Also, start planning the career you want after the military. Do you need certificates, licenses or training? Those are all things you can begin to accomplish before you leave service. That way, you'll be to do that job the day you leave the military.
The two biggest financial mistakes I see veterans and their families make is not adequately preparing for separation or retirement from the military, and not building up their savings before they leave. People wait until the last minute to start planning their careers after serving. Or where they will live and what their income and expenses will look like post-military.
Often the service members end up making less money than they did on active duty but don't adjust their lifestyle, which leads to money struggles. Planning for those things can help avoid financial problems in the future. And it's not just the service member getting out of the military and going through an identity shift. The entire family is going through a transition. Preparation also needs to be made for military spouses and kids. Properly preparing can help the whole family reduce the stress and financial impacts of leaving service.
If you didn't prepare for life after the military, it's not too late. The first place to start would be with your budget. Have you adjusted your expenses to your new income? Understanding how much money you have coming in and how much you have going out can help you quickly make adjustments to your spending. It's also an opportunity to find extra money to build up your savings. Your savings is going to be very important for the transition out of the military. It could take up to three years to get settled into civilian life. Most veterans stay at their first job after the military for only a year or two. So you’ll most likely have more change to your budget and career. The money in your savings account is useful to help you navigate the financial ups and downs until things level off.
Also, use every resource available to you. Depending on your military status, you can use military aid societies, veteran organizations and Military OneSource to get financial help and advice before and after you leave the armed forces.
My No. 1 financial tip is to spend less than you make. It may sound simple, but it's the simple stuff that will help you get ahead. Spending less than you make allows you to save more and prepare for money troubles — because they're going to happen — and to be able to accept opportunities when they come your way. When you have savings, it makes financial problems smaller versus no savings makes the slightest problem turn into a massive financial crisis.
I'm very proud that my husband and I started saving and investing our money young. Spending less than we make wasn't always fun, but it gives us a lot of freedom to make decisions that work best for our family and careers, instead of being forced into a stressful situation because of finances. On more than one occasion, we've been able to walk away from environments that don't work best for our family because we were in a good financial position.
My biggest financial regret is not saving more when I was younger and didn't have many responsibilities. Thankfully, I did start saving money the day I joined the Air Force, but I could have saved way more and should have. Saving more money before having a family would have made things a lot easier.
The best money I have ever spent is on things that help me make more money, like financial education, sales or entrepreneurship training.
Deployment money is the best money I've ever saved. We always used the extra deployment money my husband received from years spent in Afghanistan or Iraq to build up our savings or pay for things that would further our financial success. For example, one deployment, we used the extra money to pay for a certified financial planner program I wanted to take to help my career.
"Money is easy." It was from another financial professional I was required to shadow, . The moment he said it, I could see the person physically sink lower in their chair. I knew what they were thinking, "If it's so easy, why am I failing?" It made him feel worse about his situation. Money isn't easy for everyone. Sure it might be easy for a financial professional to say that with their years of education and experience. It's not always easy for someone to learn and to figure out their financial path.There's a lot to do and know, so to tell someone who doesn't do it day in and day out that it's easy is bad advice. Like everything in life, the more you learn, practice, and apply something, the easier it will get. Personal finance is the same way.
The best financial advice I've ever received was from my Dad. It was, "Money will give you freedom, freedom to do the things you want when you want." He explained that if I save my money, I would have the freedom to pursue my passions and be where I want. When I owed money to people, I would be working for what's best for them instead of what's best for my family and me. At the time, it was just another passing conversation with my Dad, but life has shown me how right his advice was then and is still today.
Image: Nastia Kobzarenko
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