By - Antonio Hicks

Budgeting for Civilian Life

Transitioning from the military can be quite an adventure, and extremely stressful if a service member is not prepared. There are a lot of new things to adapt to, from having to select clothing for work to have less income to live off of. It is important for service members to understand the impact a transition will have on their personal finances so they can plan accordingly.

I transitioned from the Army in 2009. If it weren’t for having a very supportive wife and doing a little bit of pre-planning in our personal finances, it could have been the most stressful time in my life. The uncertainty and change that military members face when they transition into civilian life can strain even the strongest relationship and budget. Planning for the financial turmoil can help lessen stress.

The most important part of the transition, of course, is to find a new job. While you’ll probably find a decent job, the pay won’t nearly compare to the pay and benefits received on active duty. That means a pay cut. To be on the safe side, I recommend planning for at least a 20% pay cut. Then, if the cut’s not that bad, you can consider it a bonus.

Luckily for us, my wife and I had started following the teachings of Dave Ramsey shortly after we married. We were living on a budget, completely debt-free, and had a nice cushion in place by the time I left the military. I would highly recommend that everyone read Dave Ramsey’s “The Total Money Makeover,” especially before considering a transition from the military.

When it comes time to forecast for a post-transition budget, consider the following areas:


One of the best benefits of military service is the housing allowance. The military provides either completely free housing or an allowance to cover the costs of renting a home in the local area. Very few other employers offer this financial incentive.

A service member’s post-transition budget should account for the loss of this benefit, which could be thousands of dollars a month. Also, service members should research the cost of housing for where they plan to live and incorporate that into their budget.


The military also provides a monthly financial benefit for the purchase of groceries. While this benefit is usually small, it should still be considered when developing a post-transition budget. Not only does the benefit go away, but the price of groceries will likely go up significantly.

According to the Defense Commissary Agency, service members save up to 30% on grocery purchases when compared to shopping at civilian supermarkets.

Service members who do not plan on retiring from the military and who are not completely disabled will lose access to the commissary system and should plan to pay higher prices for food. The article “Smart Grocery Shopping” can help shoppers save in the grocery store.


Another financial allowance provided by the military is the “clothing allowance,” which is meant to be used by enlisted members for the purchase of uniforms.

Losing this allowance shouldn’t be a very big deal since it is only a few hundred dollars a year, but the implication is that post-transition veterans no longer have to wear a uniform to work. So in addition to losing this allowance, they also have higher clothing costs.

Military Discounts

We are blessed to live in a nation where businesses value our military members so much that many of them offer military discounts for purchases of goods and services.

From restaurants to movies and cell phone plans, those discounts help military members save quite a bit of money during the span of their military career. Obviously, once they leave the military, they are no longer eligible for military discounts. Some businesses offer discounts to veterans, but those are few and far between.

When developing a post-transition budget, it is important to note that some costs, especially entertainment costs, will increase.