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Inflation, a possible recession and pandemic-related issues inevitably create financial concerns. Having served our country, veterans are worried about how their savings and benefits may be affected.
Some things are beyond our control, but there are concrete steps you can take to improve your financial situation. Avoiding doing the wrong thing is a good start. Here are some of the biggest mistakes veterans make:
1. Choosing voluntary repossession of a vehicle
Veterans who move and don’t take their car with them sometimes opt to return it to the original lender as a voluntary repossession, Annette Harris, a financial coach and Army veteran who served in Afghanistan and Iraq, told AARP Veteran Report.
This might impact your credit and ability to get a new loan for years to come. Instead, consider selling the car independently or through a local dealership.
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2. Disorganization and neglecting estate planning
Veterans often have everything squared away at work, but their homes and personal affairs can be another story. You need to have a plan for telling your loved ones what you have in case you die or are incapacitated.
Pamela Maass Garrett, an estate planning attorney and wife of an Army veteran, told AARP Veteran Report that you should assemble account statement pages and titles for every asset you own and put them in a folder. “Next, tell someone you love and trust where that file is,” she said.
“Families often lose these assets when their loved one passes. The Colorado department of unclaimed property has over $50 million, and the California department has over $11 billion,” she said.
3. Payday loans
About one in three veterans has trouble paying bills, especially in their first few years after retiring from service. But payday loans can be a slippery slope.
“Payday loan lenders are prevalent near military banks,” Harris said. “These lenders know that veterans will be required to pay these loans back if they want to maintain their security clearance and because they could also be subject to disciplinary action if they don't.”
But the “exorbitant interest rates” are punishing. Instead, veterans should budget carefully and realistically. “Evaluating your and your family’s income and expenses monthly can reduce the need to obtain an immediate fix,” she said.
4. Ignoring inflation in retirement planning
Through October 2022, the U.S. Bureau of Labor Statistics reported a 7.7% increase for consumers. Inflation is a major concern for many veterans.
