Here at CONUS Battle Drills I keep telling you about the Big Four Questions every veteran absolutely must answer before getting out.  Despite Chad’s very eloquent and convincing reasoning for asking “Why” first, I maintain that if you are not financially ready, or don’t understand the financial ramifications of your decision, it doesn’t matter if you have the best reason in the world; you can’t get out yet.

So what is your pay actually worth?

I asked an E6 friend of mine to send me an LES so I could show what the equivalent pay would be in the civilian world.  I did some analysis to make the take home bi-weekly pay as close as I could get them while still being a near apples to apples comparison.  In the civilian world, you have to pay for healthcare and retirement, so I included those in the civilian column, but only the dental in the military column.

Here is how it shakes out:

So this E6 is making the equivalent of almost $7,500 a month even though his base pay is only $3,719!

Here is the mistake that I made when I got out: I thought a “comparable” salary meant making the same as my base pay and I was WAY wrong about that.  For some reason, I didn’t take into account the additional expenses in health care and retirement and the loss of BAH, that’s why I’m telling you about it now.

BAH and BAS are also not taxed, which means that even the tax burden for the civilian is higher because he’s in a much higher bracket. Some of these numbers can change depending on the number of tax deductions, the state that you live in, your election of 401k, how much your health care costs, etc. but the point remains:  Your base pay is not representative of your take home pay.

There are, however, some major considerations you need to take into account…

Just because you would need to make nearly double in the civilian world to have a similar take-home pay, does not mean that’s how much you’re worth.

Sorry to tell you this, but you’re probably going to start off making similar to your base pay because that’s what your skills will translate to in the civilian world, and for those of you in senior leader positions, expect less than your base pay (hopefully you can supplement with retirement).

I’ve told you before you need to make a budget, and in the book I discuss this in even more detail, and if you look above, you should notice why that’s even more critical when you get out.

Financial struggles are usually where troubles in marriages begin.  It’s the first snowball that can lead to so many other bad decisions.  For veterans, there are even more issues because you don’t even know what to expect from a paycheck, you’ve never paid for healthcare, and you’ve never HAD to save for retirement.

It’s not all bad news, ok, but I want you to be ready for what is coming.  I want you to fully understand the ramifications of your decision.  I want you to see all the cards on the table, that’s what CONUS Battle Drills is about.  The point is to prepare you so this transition isn’t a kick in the nuts.

-LJF

Share this post, it’s possible someone you know is about to get out and make a terrible financial decision.  Let’s look out for each other.