Welcome to the 30 Day Financial Transition Challenge! I designed this series of articles to help you:
- Capture the financial impacts that your military transition will have on your life
- Identify, prioritize and address the friction points that come up as a result of your transition
- Develop a plan of action so that you can address each of these issues
This won’t solve all of your financial problems. However, if done correctly, this program should put you in a position to address them in a systematic fashion. Each day, we’ll take a look at a specific aspect of your financial life, identify the key factors and issues you should be aware of, and then develop a ‘to-do’ list. This to-do list consists of things that need to be addressed before, during, or after your transition.
Many people feel so overwhelmed by the sheer enormity of their personal financial situation that they never take the first step towards resolving their problems. By breaking this down into a 30-day project, we’re taking small but definite actions, every day.
Who Should Take The Financial Challenge?
This financial course is designed with the transitioning military member in mind. However, the majority of the topics are applicable to almost any point in your career. Just keep in mind several checklists and topics are geared toward transitioning individuals (such as post-military health care, insurance, and careers). But the majority of the daily challenges will apply to almost everyone.
When should I start the Financial Challenge?
This course covers many big-picture financial topics, such as budgeting, credit, debt, mortgages, and more. You can use this course when you feel like you need a focused starting point to get your financial house in order, or when you have a major life change, such as getting married, doing a PCS, earning a promotion, or transition out of the military.
When should transitioning servicemembers take the 30-Day Financial Challenge?
Whether you start two years before your transition or as you’re transitioning, you should make progress under this program. No matter when you start, you will identify a lot of action items that you’ll put on your ‘to-do’ list. However, this program does work more effectively if you start early enough so that you can actually execute most, if not all, of the action items while you’re still on active duty. In most cases, 12-18 months prior to separation or retirement should give you enough time to do this. However, two years would be optimal.
How to Take the Financial Challenge
Why is this repetitive? This program is designed to force you to think about all the ways money impacts your life. There are three ways you could do this:
- Do it all at once. This is the ‘fire-hose’ effect that many people describe during Transition GPS (formerly known as TAP). While it’s hard to put a number on the ‘success rate’ of such a course, I’ve heard enough horror stories from people to realize that this method overwhelms a lot of people.
- Treat each issue in isolation. This is kind of what happens when you see a lot of ‘financial advisors.’ Isn’t funny that an insurance salesman will tell you that the answer to most of your problems is an insurance product? They seem to think there’s only one tool that can solve each problem, regardless of what it is. Or, the we ignore the problem because there isn’t a quick and easy way to instantly solve it. That’s what happens when you solve each problem by itself…you end up playing Whack-a-Mole.
- Recognize you might have to look at the whole picture before you can solve each problem. This is the approach I recommend. Let’s talk about why.
Your financial life is a big picture. Looking at it one way might solve your problem today. However, if you look at it from a different perspective tomorrow, you might uncover another issue. For example, if you look at Day One, it might be easy to ‘Pay Yourself First.’ However, if you find an extra $200 per month to put away, where are you going to put it? Well, that answer depends on whether you’re properly insured, have sufficient savings, or have a lot of consumer debt. Even when you look at this at Day One, you probably won’t have a good idea of where you’re going to put that money until you get to Day 18 (Asset Allocation), or even later.
The whole point behind ’30 Days’ is to force you to think about all the different ways that money touches your life. While you won’t solve your problems in any single day (and it might feel like there are some days in which you don’t accomplish anything), you will start to put some of the pieces together over time. By the end of the month, you should have a decent idea of where some of those pieces fit, and you should have a rather long ‘to-do’ list that will get you where you need to be. Also, you might be able to break that list down into:
- I can do this myself
- I need professional help. This could be for tax advice, financial planning, estate planning, or any number of areas that you identify.
When you clearly identify the things that you need help with, you can control those engagements and ‘quarterback’ the process. At the same time, you know the things that you can do by yourself…you’re not hiring an expert to do things you don’t need to do.
Again, the goal isn’t to solve all of your problems at once. Some of these things might take weeks, months, or a couple of years to completely resolve. Or you might find that you have to get help. The whole point is to identify these points while you’re still in the military so that you can get to the resources you need.
Regardless of what you do, two things will happen:
- Your financial concerns will come to light, eventually.
- You will have to deal with those financial concerns.
Would you rather figure this out as problems come up, or in an organized manner that you can manage? My guess is that most people with a military background are really good at the former, but prefer the latter. If that’s the case, let’s begin!
30 Day Financial Challenge Outline
By the end of the 30 Day Financial Transition Challenge, you will not have solved your problems. However, you should have a solid game plan that you can execute on your own schedule.
- 30 Day Financial Transition Challenge Introduction
- Day 1: Paying Yourself First
- Day 2: Have Sufficient Liquidity
- Day 3: Pay Down Your High Interest Debt
- Day 4: Owning the Right Sized Home
- Day 5: Invest In Your Career
- Day 6: Five-Year Plan
- Day 7: Job Risk Mindset
- Day 8: Use of Credit
- Day 9: Rental Real Estate Exposure
- Day 10: P&C Insurance Coverage
- Day 11: Retirement Accounts
- Day 12: Post-Military Health Care
- Day 13: After Tax Investment Accounts
- Day 14: Tax Planning & Amended Returns
- Day 15: College Planning
- Day 16: Survivor Benefit Plan
- Day 17: Post-Military Life Insurance
- Day 18: Investment Management
- Day 19: VA Disability
- Day 20: Estate Planning
- Day 21: Long Term Care
- Day 22: Disability Insurance
- Day 23: PCS Move
- Day 24: Post-Military Employment
- Day 25: Quality of Life
- Day 26: Physical Wellness
- Day 27: Developing Networks
- Day 28: Cash Flow
- Day 29: Community Involvement
- Day 30: Transition GPS
By the time you get to the end of this challenge, you should have quite a few things on your to-do list. Take some time to digest it, and build yourself a schedule so that you can address these things one step at a time.